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SBA's Paycheck Protection Program (PPP) Updates

January 8, 2021

The SBA’s Paycheck Protection Program (PPP) is providing small businesses – including nonprofit organizations - with the resources to maintain their payroll, hire back employees who may have been laid off, and cover applicable overhead/administrative expenses.

Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards.

The last day to apply for 1st or 2nd draw PPP loans is March 31, 2021.

For more information, contact your banking institution to see if you qualify.

Paycheck Protection Loan Program Updates:

The Consolidated Appropriations Act, 2021 (CAA 2021) includes a second draw of Paycheck Protection Programs Loans (PPP Second Draw Loans). Key provisions related to the PPP Second Draw Loans are as follows:

Maximum loan amount $2 million

• May receive up to 2.5 times the average monthly payroll costs in the one year prior to the loan or in calendar year 2019.

Eligible entities received an original PPP loan and

• have no more than 300 employees per physical location,
• have used or will use the full amount of the first PPP loan, and
• demonstrates at least a 25% reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter. Applications submitted on or after January 1, 2021 are eligible to utilize the gross receipts from the fourth quarter of 2020.

Ability to select the covered period between 8 and 24 weeks for loan forgiveness for payroll costs of up to 60% (with some exceptions) and nonpayroll costs such as rent, mortgage interest and utilities of 40%.

Generally subject to the same terms, conditions, and requirements as First Draw PPP Loans.

Simplified certification for loans of no more than $150,000

PPP First Draw Loans are available for businesses with 500 or fewer employees that are eligible for other SBA 7(a) loans, sole proprietors, independent contractors, and eligible self-employed individuals, non-profits, including churches, accommodation, and food service operations, and adds 501(c) (6) and destination marketing organizations, news organization, and housing cooperatives with certain limitations. Borrowers who returned all or part of their original loans may reapply for the difference if they have not received forgiveness.