Paycheck Protection Program
- For those who may not have received a first PPP loan are the guidelines/forgiveness rules still the same or does that only apply to a second loan?
- Generally, for first draw PPP applicants (organizations that did not receive a loan in 2020), the rules follow the first program. Here are the forgiveness rules published in October 2020
- For second draw PPP applicants (organizations that did receive a loan in 2020), the rules a little stricter and there is a lower limit. Regarding forgiveness: Second Draw PPP Loans are eligible for loan forgiveness on the same terms and conditions as First Draw PPP Loans, except that Second Draw PPP Loan borrowers with a principal amount of $150,000 or less are required to provide documentation of revenue reduction if such documentation was not provided at the time of the loan application. Here are the new draft rules.
- Important: One page 11 of the draft PPP rules, it indicates that if you apply for and receive a second–draw PPP loan, you will be ineligible for a Save Our Stages grant. As we read it, the draft rules do not dictate ineligibility for first draw PPP loan applicants. We are working to gain clarity on this.
Save Our Stages
- Regarding eligibility for the Save our Stages grant, if an organization is opening new facility month and are anticipating losses in 2021 and has no comparative revenue from 2019 in terms of the venue, are they still eligible?
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Yes, if the organization was operating by February 20, 2020 and can demonstrate losses between one quarter in 2020 and the same one in 2019. The specific venue does not matter – new or old.
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The grant may be used for costs incurred during the period beginning on March 1, 2020, and ending on December 31, 2021. So, it includes past expenses incurred and potential future expenses.
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- Can organizations that qualify for the $2 billion set aside for companies with less than 50 employees apply right away even if they suffered less than 90%/70% decrease in revenue? Or do they still have to wait 14/28 days?
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This is unclear; From what we are hearing, it is possible that $2 bilion set aside period might be open during the first priority period but it is not confirmed. This will be determined in the final rule-making at the SBA.
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- Organizations that are less than 4 years old need not apply?
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No, organizations that were fully operation at February 20, 2020 are eligible. There is however, a five–year period for record-keeping.
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- Do you know if membership fees considered earned revenue or contributed revenue?
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We still don’t know the answer. However, understand how you characterize membership
revenue on your tax returns – are they earned or contributed – it is may under those lines. We will have to wait for the SBA’s final rules.
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Will previously received CARES Act funding be counted toward revenue?
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No, previously received funding through the CARES Act will not be counted as revenue.
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- For SOS, it appears that you have to be either a venue (owning a physical space) or a promoter (who must pay fees to performers). Does anyone know what happens for performing arts groups that work with unpaid performers? For example, Youth Orchestra, or Community theaters, or maybe orgs that teach dance? In those cases, some may pay teaching artists, but not all those artists are also being paid to perform.
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The legislative text defines a “performing arts org operator” as an entity that sells tickets to shows and pays performers, including a “mutually beneficial formal agreement.” It is unclear as to whether this would be fully disqualifying for an organization that pays staff but not performers. In this case, PPP may be a better option.
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There will be a webinar hosted by the SBA on the Shuttered Venue Grants this Thursday. Please register here: https://www.sba.gov/
Also, Dr. Fauci spoke at the recent APAP conference: https://www.
