1. PPP Loan Forgiveness Help Center
  2. Forgiveness Application Questions

What quarters or reference periods can I compare to show I experienced a 25% or more revenue reduction?

The SBA requires that second draw PPP borrowers with loans $150,000 and under provide gross receipt amounts and documentation to prove their business experienced at least a 25% revenue reduction between a certain period in 2019 and in 2020.

SBA guidance also specifies exactly which periods of time a borrower can compare in order to show this 25% or more revenue reduction. In Scratch's online loan forgiveness application, once you answer whether your business was in business for all of 2019, and (if applicable), when it started, you will only see reference period options available if the SBA guidance states they are available for you. If you do not see a certain quarter available in your menu, it means that based on your responses to the introductory questions, SBA guidance does not allow you to select those specific quarters. 

You can read full SBA guidance here, which is quoted below:  

"The appropriate reference periods depend on how long the Applicant has been in business:

  • For all Applicants, except those satisfying the conditions set forth below, the Applicant must demonstrate that gross receipts in any calendar quarter of 2020 were at least 25 percent lower than the same quarter of 2019. Alternatively, Applicants may compare annual gross receipts in 2020 with annual gross receipts in 2019 if they were in business in 2019.
  • 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 percent lower than during 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 percent 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 percent lower than the first quarter of 2020."