COMMUNITY BULLETIN! SMALL BUSINESS ASSISTANCE~FEDERAL PPP PROGRAM
Posted on 01/14/2021
As we welcome this new year, we wanted to share information about resources that may be available to you.
FEDERAL Applications for Paycheck Protect Program (PPP) loans are now open!
- Applications for Paycheck Protect Program loans are now open! To assist eligible borrowers in underserved and disadvantaged communities, at least $15 billion is being set aside for First Draw PPP loans and $25 billion for the Second Draw PPP loans to eligible borrowers with a maximum of 10 employees or for loans of $250,000 or less to eligible borrowers in low- or moderate-income neighborhoods.
- To promote access for smaller lenders and their customers, SBA will initially only accept loan applications from community financial institutions for First Draw starting on January 12, 2021 and Second Draw starting on January 13, 2021. The PPP will open to all participating lenders shortly thereafter.
- Participating Community Financial Institutions include Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs), and Microloan Intermediaries.
WHAT YOU NEED TO KNOW:
- PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.
Full Forgiveness Terms—
- Borrowers qualify for full loan forgiveness if during the 8 to 24-week covered period following loan disbursement:
- Employee and compensation levels are maintained;
- The loan proceeds are spent on payroll costs and other eligible expenses; and
- At least 60 % of the proceeds are spent on payroll costs.
First Draw Qualifications—
- Eligible small entities, that together with their affiliates (if applicable), have 500 or fewer employees. Some entities with more than 500 employees may qualify.
- Note: Existing PPP borrowers that did not receive loan forgiveness by December 27, 2020 may: (1) reapply for a First Draw PPP Loan if they previously returned some or all of their First Draw PPP Loan funds, or (2) under certain circumstances, request to modify their First Draw PPP Loan amount if they previously did not accept the full amount for which they are eligible.
Second Draw Qualifications—
- Generally eligible for a Second Draw PPP Loan if the borrower:
- Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
- Has no more than 300 employees; and
- Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
***Note: For most borrowers, the maximum loan amount of a Second Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million. For borrowers in the Accommodation and Food Services sector, the maximum loan amount for a Second Draw PPP Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million.
Deadline: March 31, 2021
For application and additional information, please visit www.SBA.gov