From the Economic Development Collaborative:
PAYCHECK PROTECTION PROGRAM UPDATES
The Paycheck Protection Program (PPP) has reopened this week as community lenders have started accepting applications for new and current borrowers. New regulations have created retroactive changes to PPP loans borrowed in 2020 and outlined guidelines for first and second draw loans in 2021.
View our PPP Updates 1-14-2021 Guide
Important Dates:
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January 11, 2021: Participating Community Financial Institutions will be able to accept first draw applications.
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January 13, 2021: Participating Community Financial Institutions will be able to accept second draw applications.
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January 15, 2021: Participating lenders with $1 billion or less in assets will be able to accept first and second draw applications.
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January 19, 2021: All remaining participating lenders will be able to accept first and second draw applications.
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March 31, 2021: Loans are available through March 31, 2021 OR until all allocated funds are exhausted.
General Updates:
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For a full list of PPP regulation updates please view our PPP Updates 1-14-2020 Guide. CLICK HERE.
- Retroactively, all PPP loans that have been received or will be received are NOT taxable AND forgiven expenses are tax-deductible.
- Economic Injury Disaster Loan (EIDL) advances will not be deducted from PPP forgiveness for all applicants that have not completed their forgiveness process.
- There is now a Simplified Forgiveness Application for all loans under $150,000. Please work with your lender to process your Paycheck Protection Loan Forgiveness Application.
First Draw PPP Loans in Round 2
Businesses can apply for PPP loans if they have not previously received PPP.
- Businesses looking to apply for a first-time PPP loan should be in touch with their current lender, community bank or credit union to see if they are accepting applications.
- The maximum loan size for a first draw PPP loan is up to $10 million, using the following calculation: 2.5 times the average monthly payroll costs for the 12-month period prior to the loan application or for calendar year 2019.
- Borrower is still limited to 500 employees or less (exception for Hospitality/Food Service).
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See our PPP Updates 1-14-2021 Guide for a list of newly eligible entities. CLICK HERE.
Second Draw PPP Loans in Round 2
Any entity that qualified and received a PPP loan in 2020 will now have the chance to apply for a second PPP loan with the same general loan terms as their first draw PPP loan if they meet certain criteria. Please contact the same lending institution you previously received PPP through if you are able to.
- The maximum loan size for a second PPP loan is $2 million, using the same 2.5 times the average monthly payroll costs calculation.
- The second draw program will offer forgivable loans to small businesses, nonprofits, sole proprietors and independent contractors if they meet these conditions: (1) the company has fewer than 300 employees; (2) the company had a 25% reduction in gross receipts during at least one quarter of 2020 versus the same quarter of 2019; and (3) have used or will use the full amount of their first draw PPP loan.
- Existing PPP borrowers that did NOT receive loan forgiveness by December 27, 2020 may: Reapply for a First Draw PPP Loan if they previously returned some or all of their First Draw PPP Loan funds or, 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. The SBA is currently finalizing eligibility guidance on this “modified first draw” option.
