The cloud is one of the safest places you can keep your company’s sensitive data. If your small business hasn’t moved its information to the cloud yet, it may be looking to do so, especially in light of recent high-profile hacks of large businesses and even the government. Yet, moving all of your data to the cloud can be a huge expense. While it is always a big decision to start using cloud services, the recent economic downturn may have made this decision an adamant one for your company.
Your company is not alone wondering if a move to the cloud is a good investment right now. Other small to mid-sized businesses are postponing or even cutting their software investments right now–46% of them as of April 2020. However, those who were planning on spending in this area prioritized investments in the cloud and in software to allow them to use the cloud. This was even more true later in 2020 than at the start of it.
In fact, so many small to mid-sized businesses are investing in the cloud right now that analysts expect investments in this area from those companies to grow in 2021. Many of these companies are making use of COVID-19 relief legislation to help them move into cloud-based computing. Using the Paycheck Protection Program, also called PPP-2, which is intended for small businesses, companies of this size can use allowances for software and cloud updates in the available program funds. There is even a streamlined application process that allows small businesses to use these funds to modernize with ease.
This is the second PPP funds bill that has been approved by Congress. In this second one, the covered operations expenditures were expanded and now apply to “any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records, and expenses.”
What does this mean for your business? It means that you can apply for PPP-2 funds with expanded allowances for products that provide for business continuity. These types of products include things like cloud software subscription expenses and adjunct products like accounting software. If your company has been considering moving its data to the cloud, a PPP-2 loan can be the answer.
Many small businesses were disappointed that the first round of PPP loans did not include allowances for this software and services. The majority of expenses used in the first round of loans were meant to go to payroll. With the second round, there is more flexibility to not only keep your business going during the pandemic and subsequent economic downturn but to upgrade it and help it be the best it can be.
These are just a few leaders in the small business community who have spoken out in favor of these new PPP-2 allowances. Experts in their fields, you can trust that when they say moving to cloud-based computing and data storage is a sound financial decision for the use of your PPP-21 funds, they know of what they speak. Their years of experience in the field give their opinions an authority that few others can provide.
“Failing equipment or lost backups can close a business faster than a temporary lack of money. In most cases, technology is even MORE important to the current normal.
People need to:
All this means even more technology is spent in a down economy, and loan forgiveness might be crucial to many businesses adapting and surviving.
“By expanding the PPP loans to include technology cloud upgrades is an opportunity for small business to upgrade their existing systems such as QuickBooks or CRM systems. Many SMB’s have been hesitant to commit to these upgrades due to the current economic crisis that COVID-19 has caused. MSP’s should jump on this opportunity to present modern solutions to their clients with the availability of newly created PPP-2 funds. This is a win-win for both service providers and end-users.”
If your company already received PPP funds in the first package, it doesn’t mean you can’t apply for the second round. In fact, most companies will be eligible for a second PPP loan. Like the first PPP loan, this one will turn into a grant that does not need to be paid back if all of the stipulations for receiving the money are met.
The most important thing to know about the PPP-2 loans is that money spent on cloud-based services, and adjunctive software can only comprise 40% of the total amount of the loan money your company receives. The remainder of the money is supposed to be spent on payroll expenses, just like the first PPP loan.
To receive a second PPP loan after also receiving a first one, your company must meet the following eligibility criteria:
Records must be kept to show your PPP-2 money was spent on eligible expenses. Your company has until March 31 to apply for PPP-2 funds, and streamlined processes should make applying for this loan a much smoother experience than applying for the first one.