WATERTOWN — Loan professionals are stressing that self-employed business owners are eligible to apply for the second round of Paycheck Protection Program funding.
Just like how the federal government is saying the process for delivering stimulus checks would be smoother, the Paycheck Protection Program for small businesses is likely going to be more streamlined as the kinks get ironed out from the first round.
But some officials are pointing out that there was hesitation among business owners who weren’t convinced their loans under the program would be forgiven like it was previously reported.
The Northern Credit Union processed about 454 loans in the first round with 80% of the loans being less than $50,000.
In April, Watertown Savings Bank processed 595 loans for $60 million to Jefferson County small businesses, keeping about 8,000 employees on the payroll at the time when the local economy was shut down because of the pandemic and businesses were struggling to survive.
About 35% of those loans have been forgiven already, and half have been submitted to the Small Business Association for review, said Rob Barlow, director of commercial lending at the credit union.
Self-employed business owners were eligible for the program in the first round, and, if the federal relief bill isn’t vetoed by the president, they will be eligible in the second round.
Just like any other business, self-employed owners would be eligible if they have fewer than 300 employees, have used or will use the first round of protection loans if they applied the first time, and can show at least a 25% reduction in gross receipts in any quarter of 2020, which will be compared to 2019 earnings.
If an independent doctor, lawyer, real estate agent or hair stylist doesn’t have any employees, they would still be eligible as they would essentially be paying themselves. That’s the point of the program — to mostly continue payroll and pay for other operational expenses. For a loan to be forgiven, a business must use all of it on payroll, mortgage or utilities.
The second round has added expenses, like human resources, accounting and property damage.
Mr. Barlow said he expects the second round of the PPP to begin sometime in January.
If the business is smaller, it’s far easier to apply. If the business already applied for round one, the process is easier.
To apply for forgiveness is even simpler, with some applications taking just seconds for self-employed individuals. They are looking at businesses who might have hesitated the first time around, or had trouble applying, then they facilitate applications through the SBA and expedite the process, touting a “Your why is our why” mentality.
“Things are difficult right now for everybody,” Mr. Barlow said. “The major focus of the PPP is really to get loans into the businesses’ hands and help keep their employees employed.”