Sba Ppp Second Draw – On Monday, January 11, the US Small Business Administration (SBA), in consultation with the US Treasury Department, reopened the Payroll Protection Program (PPP) loan portal. Below is a summary of eligibility requirements for first and second deposit PPP loans.
On December 27, 2020, the Consolidated Appropriations Act of 2021 became law. Title III of that act, the Economic Assistance for Small Businesses, Nonprofits, and Hard-hit Localities Act (the of economic assistance) reopened and made changes to Payroll Protection Program loans (PPP loans). Eligible companies that have not received a PPP loan in previous rounds can apply for a PPP loan from 11 January 2021 (first PPP loan).
Sba Ppp Second Draw
Eligible companies that have received a PPP loan in previous rounds and have spent all their PPP loan funds can apply for a second PPP loan (second disposition PPP loan). Both programs end on March 31, 2021. The SBA announced that beginning on January 13, participating community financial institutions can begin submitting application information to the SBA for a second drawing of PPP loans. According to the SBA, additional lenders will be able to submit first and second draw applications for PPP loans a few days later.
The Second Draw Ppp Loan: The Latest News And Next Steps For Restaurants And Small Businesses
The SBA announced that beginning January 13, participating community financial institutions can begin submitting application information to the SBA for a second draw of PPP loans. According to the SBA, additional lenders will be able to submit first and second draw applications for PPP loans a few days later.
The Economic Assistance Act made some borrower-friendly changes to the PPP loan program for first-draw PPP loans that expanded eligibility for certain types of businesses and expanded eligible uses of PPP loan funds. However, in general, the qualification requirements for first-draw PPP loans remain the same as for previous PPP loan rounds (eg qualification to have 500 employees or less) and the same rules apply ‘adhesion.
Second Draw PPP loans are limited to $2 million per borrower and are more restrictive in terms of eligibility requirements. Applicable to most potential borrowers, eligibility requires that you have 300 or fewer employees and that you can demonstrate a 25% decrease in gross revenue in a calendar quarter of 2020 compared to the same calendar quarter in 2019.
• Same eligibility standards as for earlier rounds of PPP loans (eg, companies with 500 or fewer employees can qualify)
Webinar Alert: Sba Ppp & Employee Retention Credit
• All borrowers now have the option to choose a ‘Covered Period’ of 8 weeks or 24 weeks from the date of receipt of PPP loan funds
• New expanded criteria for certain news organizations and radio stations; destination marketing organizations; and companies that are in the process of reorganization in bankruptcy
The above is a summary of the first draw and second draw PPP loan rules and is not intended to be a complete explanation of the Economic Assistance Act or the Wage Protection Program. If you have questions about your individual situation, we encourage you to contact your legal counsel or other professional advisors. You can contact the KO team here.
We are changing the status quo in the legal industry one client at a time. Why not be next? The Payroll Protection Program (PPP) now allows certain eligible borrowers who previously received a PPP loan to apply for a second PPP loan with the same general loan terms as their first PPP loan. PPP loans from the second draw can be used to help finance payroll costs, including benefits. Funds can also be used to pay mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by theft or vandalism in 2020, and certain supplier costs and costs of operations.
Of Lenders Have Unresolved Hold Codes
Second Draw PPP loans to eligible borrowers are eligible for full loan forgiveness if, during the covered period of 8 to 24 weeks after loan disbursement:
For most borrowers, the maximum loan amount for a second PPP loan is 2.5 times the average monthly salary expense for 2019 or 2020 up to $2 million. For borrowers in the lodging and food service industry (click HERE for NAICS 72 to verify), the maximum loan amount for a second draw PPP loan is 3.5 times salary costs monthly averages for 2019 or 2020 through $2 million.
Borrowers may apply for a second PPP loan through March 31, 2021 through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, eligible nonbank lender, or institution of the agricultural credit system, which is participation in the PPP. All PPP second draw loans will have the same terms regardless of the lender or borrower. A list of participating lenders, as well as additional information and full terms and conditions can be found HERE.
The SBA continues to call on its lending partners, including Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs), to redouble their efforts to assist eligible borrowers in underserved and underserved communities. At least $25 billion is set aside for second-draw PPP loans to eligible borrowers with up to 10 employees or for loans of $250,000 or less to eligible borrowers in low- and moderate-income neighborhoods. To promote access for smaller lenders and their customers, SBA will initially only accept second-draw applications for PPP loans from community financial institutions beginning January 13, 2021. The PPP will be open to all lenders participants for the second draw of PPP loans shortly thereafter.
Small Business Owners Invited To Su Ag Center, Sba Webinar On Ppp & Eidl Programs
Second draw PPP loans have some restrictions that first draw loans do not. You can’t get a second loan of up to $2 million unless: On January 15, the Small Business Administration (SBA) began accepting applications for the second round of Payroll Protection Program loans (PPP).
To be eligible for a second PPP loan, which cannot exceed $2 million, a company must have 300 or fewer employees, have previously received a PPP loan from the first draw, have used, or will soon use, all the money from their Previous PPP. loan and can demonstrate a 25% reduction in gross revenue between comparable quarters in 2019 and 2020. Note that alternative calculations are provided for applicants who were not in business for all of 2019.
For most applicants, the maximum loan amount for a second draw PPP loan is 2.5 times the average monthly salary for 2019 or 2020. For borrowers in the hospitality industry and food services, the maximum loan amount for a second PPP loan is 3.5 times. the average monthly salary expense for 2019 or 2020. Both always up to $2 million as mentioned above.
The applicant must provide documentation proving that he has had a quarterly decrease in income compared to the previous year, at the time of the application, on the date of the loan forgiveness application or with prior to the SBA application. This documentation may include relevant tax forms, a copy of quarterly income statements or bank statements.
When Can I Submit My Ppp Loan Forgiveness Application?
We expect participating lenders to accept applications in a variety of formats and timeframes. Businesses should consider where to apply, assess eligibility and gather the appropriate documentation for relevant applications.
The ZOMMA Group has established a dedicated team that continually monitors new guidance from the SBA, Treasury, Congress and the IRS to ensure we have the most current information when advising our clients. To discuss your eligibility for a second draw PPP loan and/or to accurately calculate your borrowing capacity, please do not hesitate to contact us. luca.cancellieri@
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