Only certain businesses are eligible to receive a PPP loan, and these specifications are different for first-time loan recipients and second-draw recipients.

TO BE ELIGIBLE FOR A FIRST-DRAW PPP LOAN:

• Your business has 500 or fewer full-time, part-time, or seasonal employees.
• Your business was operational before February 15, 2020 and remains operational.

TO BE ELIGIBLE FOR A SECOND-DRAW PPP LOAN:

• Your business has less than 300 full-time, part-time, or seasonal employees; if you have multiple locations, you may not have more than 300 employees per location.
• You are able to demonstrate a revenue reduction of at least 25% in the first, second, or third quarter of 2020 (when compared with the same quarter in 2019).
• You have used or will use the full amount of the first draw PPP loan.
• Your business was operational before February 15, 2020 and remains operational.

BUSINESSES ELIGIBLE FOR FIRST AND SECOND DRAW PPP LOANS INCLUDE:

• Sole proprietors
• Independent contractors
• Self-employed individuals
• Certain non-profits (the new bill has expanded eligible businesses to include certain 501(c)(6) non-profit organizations)
• Seasonal employers; the new bill has clarified the definition of these to be businesses that operate no more than seven months within a year or earn no more than a third of gross receipts within a six-month period
• Faith-based organizations that have less than 150 employees
• Housing cooperatives that employ less than 300 people

PPP UNDER THE CONSOLIDATED APPROPRIATIONS ACT, 2021 AT-A-GLANCE:

• $284 billion has been allocated to PPP (including $138 billion of unspent loans from the first round that were reinvested) and the program has been extended to March 31, 2021
• Second-draw loans are available for businesses with under 300 employees
• Businesses eligible for PPP loans has been expanded
• Loan limitations have been expanded for certain businesses
• Forgiveness for loans under $150K have a new, simplified one-page application
  • While expenses eligible for forgiveness still require a 60/40 split of payroll costs/other eligible expenses, group health insurance benefits are now included in payroll costs (and these entail life insurance, disability benefits, vision, and dental insurance)
• Eligible expenses for forgiveness have been expanded (for first-draw loans that have not yet been forgiven and for second-draw loans)
• Borrowers are allowed to choose a covered period that is any period of time between eight and 24 weeks
• PPP funding includes dedicated set-asides for community lenders (CDFIs and MDIs) and business that operate in low-income areas
• A clarification has been made indicating that interest rates on PPP loans are non-compounding and non-adjustable 
• A clarification has been made indicating that forgiven PPP loans are not taxable and forgiven expenses are tax-deductible

FIRST-DRAW PPP LOAN LIMITATIONS:

The maximum amount a business that has not yet received a PPP loan can borrow is the lesser of:

• 2.5 times the average monthly payroll costs and healthcare costs
• $10 million

There may be exceptions to these limits for restaurants and other hospitality businesses.

SECOND-DRAW PPP LOAN LIMITATIONS:

Any business that is applying for a second draw will be subject to more stringent limitations. The maximum second PPP loan amount is the lesser of:

• 2.5 times the average monthly payroll costs and healthcare costs in the year prior to when the loan was received or within the calendar year
• 3.5 times the average monthly payroll costs and healthcare costs in the year prior to when the loan was received or within the calendar year for any business that is classified under Code 72 by the North American Industry Classification System (NAICS). (This is a list of hospitality and entertainment businesses like restaurants, hotels, and casinos; click the link to get the full list.)
• $2 million

Please read carefully page 4 of the application on completing the form.

• All boxes must be complete unless they do not apply to your business, in which case you should mark the box Not Applicable or NA.
• All lines/certifications on the application requiring initials must be hand written initials (not typed).   The signature of the authorized representative of the applicant  on the application must be hand written (not typed).
• If you do not have the PPP First Draw SBA Loan Number available you can leave this box blank and we will enter it for you after the application is submitted to us.
• NAICS Codes can be looked up at the following website https://www.naics.com/search-naics-codes-by-industry/
• Business address must be a physical street location (not a P.O. Box).
• The demographic information form is optional to complete at your discretion.

The borrower must submit to the lender the following information to obtain a Second Draw PPP Loan (unless previously submitted in connection with the First Draw PPP Loan).  This information is required even for applicants of $150,000 or less that elect to leave the “Reduction in Gross Receipts of at Least 25%” section of the Borrower Application Form blank.

1. The completed SBA Form 2483-SD (Second Draw Borrower Application Form).
2. For Borrowers Not Self-Employed: Form 941 and state quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever quarter is used to calculate payroll) or equivalent payroll processor records (unless the borrower is self-employed).
3. For Partnerships: IRS Form 1065 K-1s.
4. For Self-Employed Borrowers with Employees: Borrower’s 2019 or 2020 IRS Form 1040 Schedule C, Form 941, and state quarterly wage unemployment insurance tax reporting forms from each quarter of 2019 or 2020, or equivalent payroll processor records. A payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish the applicant was in operation on February 15, 2020.
5. For Self-Employed Borrowers without Employees: 2019 or 2020 Form 1040 Schedule C, 2019 or 2020 IRS Form 1099-MISC, document to establish borrower is self-employed (e.g., invoice, bank statement, book of record), and 2020 invoice, bank statement, or book of record to establish that borrower was in operation on or around February 15, 2020.
6. For All Loans: Documentation sufficient to establish that borrower experienced a reduction in revenue required to be eligible for the Second Draw PPP Loan. This may include relevant tax forms, including annual tax forms, or (if relevant tax forms are not available) a copy of the applicant’s quarterly income statements and/or bank statements with supporting calculations.  In addition, you should provide the calculation performed showing the dollar reduction in Gross Revenues from any calendar quarter of 2019 to the same calendar quarter of 2020, as well as the calculation showing the percentage reduction of 25% or more.
7. For All Loans: Supporting payroll documentation to demonstrate and confirm the calculation of the dollar amount of average monthly payroll costs for 2019 or 2020 (whichever was used to calculate the eligible loan amount).

If you have already submitted the Second Draw Borrower Application without the above required supporting documentation please provide this additional information at your earliest possible convenience.