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Can you tell me more about the 25% reduction in gross receipts?

If you are applying for your first PPP loan, you do not need to demonstrate a reduction in gross receipts.

To be eligible for a Second Draw PPP Loan, applicants must be able to demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. Alternatively, applicants may compare annual gross receipts in 2020 with annual gross receipts in
2019. (If you do this, please enter “Annual” in the 2020 Quarter and Reference Quarter fields on the SBA’s PPP loan application).

  • For entities not in business during the first and second quarters of 2019 but in operation during the third and fourth quarters of 2019, applicants must demonstrate that gross receipts in any quarter of 2020 were at least 25% lower than either the third or fourth quarters of 2019.
  • For entities not in business during the first, second, and third quarters of 2019 but in operation during the fourth quarter of 2019, applicants must demonstrate that gross receipts in any quarter of 2020 were at least 25% lower than the fourth quarter of 2019.
  • For entities not in business during 2019 but in operation on February 15, 2020, applicants must demonstrate that gross receipts in the second, third, or fourth quarter of 2020 were at least 25% lower than the first quarter of 2020.