SBA announces terms for new round of PPP funding

We have exciting news! The U.S. Small Business Administration (SBA) announced this January the terms for a new round of funding for the Paycheck Protection Program (PPP). This round is open to both new and existing PPP borrowers.

FIRST DRAW: If you have not received PPP funds before, you maybe be eligible to apply now. Small businesses, farmers, non-profits, veterans’ organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors can apply.

SBA Form 2483 First Draw Overview
SBA Form 2483 First Draw Application
 

SECOND DRAW: If you received PPP funds before, you may be eligible for a Second Draw PPP funding.

SBA Form 2483-SD Second Draw Overview
SBA Form 2483-SD Second Draw Application

 

Calculating your Second Draw PPP Loan

• 2.5 times your average monthly payroll with a maximum loan amount of $2 million.
• The average monthly payroll is calculated by using 2019 or 2020 total payroll expenses divided by 12.
• When calculating payroll costs, the borrower must subtract any compensation paid to an employee in excess of $100,000 on an annualized basis.
• If the borrower has a NAICS code beginning with 72 (hospitality, restaurants, etc.), the calculation is 3.5 times the average monthly payroll costs.
• Schedule F (Farmers), the maximum loan amount is obtained by dividing the borrower’s gross income as reported on 2019 or 2020 Schedule F that is not more than $100,000 divided by 12 and multiplied by 2.5. ($20,800 max).

Eligibility requirements for Second Draw PPP

• Previously received a First Draw PPP Loan and will or has used the full amount of that loan.
• Has no more than 300 employees; and
• Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020, or on an annual basis.