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The Illinois Hispanic Chamber of Commerce (IHCC) is closely monitoring COVID-19 and how it is impacting business at a local and regional level. Our organization is fully operational and offering guidance to support and collaborate with small businesses through this time of uncertainty.

IS FORGIVENESS AVAILABLE FOR PPP-2 LOANS? Yes. The forgiveness calculation and process is similar for PPP-2 loans as for the first round of funding. Importantly, the use of funds is expanded to cover additional areas including operations expenses, property damage costs, supplier costs and worker protection expenses (yet to be fully defined). Previously only payroll, rent, utilities and interest were eligible expenses for use and forgiveness.

ARE ELIGIBILITY REQUIREMENTS DIFFERENT FOR PPP-2? Yes. Eligibility for the second round of PPP are more stringent. Generally, borrowers must only employ 300 or fewer employees (previously 500). A second requirement is that borrowers must have experienced a 25-percent or more drop in gross receipts in any quarter in 2020 compared to the same quarter in 2019. PPP-2 funding is available regardless of whether first round funding was received or forgiven. A portion of funding is also reserved for first time PPP borrowers.

ARE EXPENSES MET WITH FORGIVABLE/FORGIVEN LOANS NOW DEDUCTIBLE? Yes. Expenses met with PPP funding that was or is expected to be forgiven are now tax deductible at the Federal level. This will apply to borrowers who have met forgiveness criteria, regardless of whether they have applied or been granted forgiveness. It remains to be seen whether States will also follow in allowing deductibility.

HAS THE SBA DEFINED GROSS RECEIPTS? Not yet. The SBA will issue regulations within 10 days of the Bill’s passage.

HOW IS FUNDING DETERMINED? PPP-2 loan amounts are generally to be calculated by 2.5x average monthly payroll in 2019. This is the same as the first round.

WHAT IS THE MAXIMUM LOAN AMOUNT AVAILABLE? PPP-2 borrowing is capped at $2 million.

HOW IS THE COVERED PERIOD DEFINED UNDER PPP-2? At the borrower’s choice, any time frame between eight and 24 weeks from the date of funding.

HOW ARE PPP-2 FUNDS RESTRICTED? PPP-2 funds must be used on payroll costs and other qualifying expenses. Qualifying expenses have been expanded to include various categories of operating expenses, supplier costs, property damage costs and certain worker-protection expenses.

HOW MUCH OF PPP-2 FUNDS MUST BE SPENT ON PAYROLL? Same as the first round of PPP, payroll costs must account for at least 60 percent of total forgiveness.

WILL AND EIDL GRANT REDUCE FORGIVENESS? Forgiveness will not be reduced for EIDL grants received.

WILL SALARY AND HEADCOUNT REDUCTIONS IMPACT FORGIVENESS? Yes. Salary and FTE reductions will continue to be part of the forgiveness considerations.

DOES THE FORGIVENESS APPLICATION FOR THE FIRST ROUND OF PPP NEED TO BE SUBMITTED PRIOR TO APPLYING FOR PPP-2? No. Borrowers can apply for PPP-2 prior to submitting forgiveness applications for the first round of PPP. The timing of PPP-2 application and funding to be determined by individual lenders.

IS THE FORGIVENESS APPLICATION FOR PPP-2 STREAMLINED? A streamlined forgiveness process is available for borrowers of $150,000 or less.

HAS THE NEW BILL AMENDED ANY OF THE FORGIVENESS GUIDANCE ON THE FIRST ROUND OF PPP? Yes. Particularly the expansion of qualifying non-payroll expenses.


Food and Beverage (business with NAICS code beginning 72): Can be funded 3.5x 2019 average monthly payroll (2.5x for all other industries and still capped at $2 million). Maximum employee threshold is also increased from 300 to 500 for food and beverage borrowers.

Entertainment and Culture: The Bill provides for $15 billion of funding to live venues, movie theatres, cultural institutions and other similar businesses.

Nonprofits: Eligibility is expanded to 501(c)(6) organizations where there are no more than 150 employees (as well as other qualification criteria).

If you have any questions on the above, the Illinois Hispanic Chamber of Commerce (IHCC) has as an experienced team of consultants specializing in COVID-programs and can provide the tools your business needs to help it recover from this business disruption. We are here to help organizations to succeed in these very challenging times.

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