Another Possible Wave of Funding – P4 Explained

PPP - Loan Forgiveness

We’re proud to partner with NBT Bank in providing informative, timely updates on the ever-changing PPP Forgiveness regulations. Please review our webinars, EZ application update details and more to help support your business in this forgiveness process. To learn more about NBT Bank, visit: NBT Bank – Business.

Congress has introduced the Prioritized Paycheck Protection Program Act, or for short the ‘P4’ Act.  This would allow eligible businesses to secure a second PPP loan worth up to 250% of monthly payroll costs with a maximum of $2,000,000.

This P4 loan round will only be for the most in-need small businesses.  Currently, the following are the eligibility requirements to apply for a P4 loan;

  • Except as otherwise mentioned, are subject to the same terms, conditions, and forgiveness criteria as initial PPP loans.
  • Fewer than 100 employees
  • Not available to publicly traded companies.
  • Businesses must already have exhausted a PPP loan or be on track to do so.
  • Businesses need to demonstrate that the pandemic caused revenue loss of 50% or greater.

The revenue loss of at least 50% is certainly the largest disqualifying requirement for most businesses.  It is unfortunate for businesses who may still be significantly struggling right now that will just miss this revenue threshold.  High-growth companies will also be at a disadvantage as revenues may be slight down or just even with the comparison period, but the company made significant cost investments and had expectations of having revenue x times higher in 2020 vs. 2019.

See below for how the revenue period may be calculated depending on the business’ situation.

  • Default Revenue Period: Revenues during the 1st or 2nd calendar quarter of 2020 are less than 50% of the revenues during the same calendar quarter in 2019, or
  • New Business after April 1, 2019: Revenues during any 2-month period during Q1-Q2 of 2020 are less than 50% of the amount of revenues during any prior 2-month period during Q1-Q2 of 2020; or
  • Seasonal Businesses: Revenues during any 2-month period during Q1-Q2 of 2020 are less than 50% of the amount of the revenues during the same 2-month period in 2019.

With the original PPP loan, businesses only needed to attest that the current economic uncertainty made the loan request necessary to support the ongoing operations of the borrower.  With P4, it is much stricter in its eligibility requirements and prioritizes the business that are most in need for additional support.

The P4 Bill has only been introduced in Congress and has not been voted on yet.  Congress will return to session on July 20th.

Check back for updates to this Bill as they occur.