PPP Loan Availability
Last Friday the SBA and Treasury announced that the second round of the Paycheck Protection Program (PPP) opens today, January 11, 2021, and on Wednesday, January 13, 2021. The exclusive two-day window, on the 11^th and 12^th of January, is reserved for first-draw PPP loans by community financial institutions that serve minority- and women-owned businesses. Then on the 13^th, second draw PPP loans by the same community financial institutions stated above will be available. Shortly after the 13^th all participating lenders will have the ability to transmit PPP loans for their clients – there has not been a specified date for when this will occur. There will be $284.5 billion available for these PPP loans, including $35 billion for first-time loans.

Deadline for Applications
March 31, 2021

Calculation of Loan Amount

• First and Second-Time Borrowers
  • Can receive up to 2.5 times their average monthly payroll costs (with a cap per employee of $100,000 annualized) in 2019, 2020, or the year prior to the loan
• PPP Loan Borrowers with NAICS codes starting with 72 (such as hotels and restaurants)
  • Can receive up to 3.5 times their average monthly payroll costs (with a cap per employee of $100,000 annualized) in 2019, 2020, or the year prior to the loan

New Qualified Businesses and Expenditures

• Businesses
  • Nonprofits including churches
  • Sec. 501(c)(6) business leagues – other restrictions apply
  • News organizations – other restrictions apply
  • Publicly traded companies with certain ownership
• Expenditures
  • Protective supplies, equipment and modification costs to comply with COVID-19 guidelines
  • Property damage related to vandalism or looting that was not covered by insurance or other compensation
  • Essential expenditures to suppliers to maintain current operations
  • Covered operating expenditures
    • Payments for business software or cloud computing service that is used for business operations
    • Product or service delivery
    • Processing, payment, or tracking of payroll expenses
    • Human resources
    • Sales and billing functions
    • Accounting
    • Tracking of supplies, inventory, records and expenses

Qualifications for First-Draw Applicants (up to $10 million)

• Operation
  • In operation prior to February 15, 2020
• Employee Count
  • 500 or fewer employees
• Employee Count (food services operations)
  • 500 or fewer employees per location

New Qualifications for Second-Draw Applicants (up to $2 million)

• Revenue Reduction Test
  • Previously a business only had to certify that they had economic uncertainty in order to qualify for the first round of PPP loans. In the second round, businesses, that are requesting a second PPP loan, must prove they have been impacted by showing they have faced at least a 25% reduction in revenue in a quarter compared to the same quarter from the previous year
• Employee Count
  • 300 or fewer employees
• First Round PPP Funds Spent Test
  • The borrower must certify that they have used or will use all of the funds from the first PPP loan before receiving the new funds  

Simplified Forgiveness
Borrowers that receive a PPP loan of $150,000 or less will be able to fill out a simplified, one page, forgiveness application. The SBA has not released this simplified form yet, but they have a deadline of January 20, 2021. When applying for forgiveness, applicants must use at least 60% of the funds for payroll between 8 or 24 weeks.
 
 
Please stay safe and healthy.