Updated guidance on the Paycheck Protection Program (PPP) was released by the Small Business Administration (SBA) this week, with details on the “first draw” program and the recently enacted “second draw” program.
PPP loan program first draw applications will reopen the week of January 11 for new PPP borrowers.
Second draw PPP loan applications also will be available the week of January 11, 2021. Second draw loans are limited to $2,000,000 for eligible borrowers who previously received a first draw loan. Eligible second draw PPP loan applicants must be:
- Borrowers with fewer than 300 employees
- Borrowers who have used or will use the full amount of their first loan
- Businesses that can show a 25% decline in gross receipts in any 2020 quarter compared with the similar quarter in 2019, regardless of other strong quarters in 2020.
The second draw loan is based upon the same 2.5 months of 2019 payroll, except for specific hospitality industry companies that receive 3.5 months of payroll.
For loans with principal amounts greater than $150,000, applicants, when applying, must document their gross receipts, including providing “relevant tax forms”, “annual tax forms,” or, if “relevant tax forms” are not available, a copy of the applicant’s quarterly income statements or bank statements.
Simplified PPP loan program forgiveness procedures for second draw PPP loans under $150K will be in place.
Act quickly! Applications open January 13. The last date for applications is March 31, 2021, although it’s anticipated that funds will not last the full application period.
If you’re ready to consider applying for a PPP loan or eventual loan forgiveness, PWB can help.