PPP loan applications for both first and second time borrowers are open now. (j)) for more information on forgiveness. If the following statements apply to your business, you are eligible to apply for your second PPP loan in 2021. Current economic uncertainty has made a PPP loan necessary to sustain your business; Second draw PPP loans. Documentation sufficient to highlight a reduction in revenue including: 5. Note you do not need to have applied for forgiveness or even received it to apply for a second draw. The Small Business Administration will begin accepting applications from partner lenders beginning the week of January 11, 2021. The Economic Aid Act, signed December 27, 2020, authorizes certain borrowers that received a Paycheck Protection Program (PPP) loan to be eligible for a second draw PPP loan.. Generally speaking, the loan amount is determined by your average monthly payroll for either 2019 or 2020, multiplied by 2.5, with a maximum loan size of $2 million. PPP SECOND DRAW REQUIREMENTS In order to qualify for a second draw PPP application your business will need to certify that it: 1) Received a First Draw PPP Loan and spent all of the money on qualified expenses a. Borrowers who previously received a First Draw PPP loan in accordance with the SBA eligibility criteria may be eligible for a Second Draw if certain requirements are met. There are a few key differences between the first and second draw in terms of how to qualify. Second draw loan eligibility requirements. On January 6, 2021, the SBA released two sets of guidance: one for first draw PPP loans and another for second draw PPP loans. For business entities with an NAICS code beginning with 72 or certain news organizations, the above limit of 300 or fewer employees applies per physical location. The Economic Aid Act generally provides that a borrower is eligible for a Second Draw PPP Loan only if it has 300 All Second Draw PPP Loans will have the same terms regardless of lender or borrower. Deeper Dive – “Gross Receipts”Defined The 25% revenue reduction requirement Eligibility for a second PPP draw – PPP Round 2. In general, the Economic Aid Act made the eligibility requirements for Second Draw PPP Loans narrower than the eligibility requirements for First Draw PPP Loans. Second Draw PPP Loans are generally subject to the same terms, conditions and requirements as First Draw PPP Loans. Please see the SBA’s Interim Final Rule on Second Draw Loans (including section IV. Paycheck Protection Program (PPP) borrowers can take steps now to prepare to apply for the next round of PPP loans – a round that allows the option for a “second-draw” loan for some small businesses. If you're a Second Draw PPP applicant, you must meet the following additional criteria and note that additional conditions may apply: Have 300 or fewer employees 2; Have used your entire First Draw PPP loan on PPP-eligible expenses; Demonstrate a 25% or greater reduction in revenue over a certain period 7. The documentation must support the amounts provided in the application. PPP Second Draw allows borrowers who previously received a PPP loan to receive a second potentially-forgivable loan to be used toward payroll expenses, rent, utilities, and mortgage interest. In order to apply for a second draw of the PPP loan, your business must meet certain requirements. Loan Application Schedule C Filers : An Applicant that files an IRS Form 1040, Schedule C, and elects to calculate the PPP loan amount using gross income must use this form. As noted, a borrower is eligible for a Second Draw PPP loan only if it has 300 or fewer employees and has had a revenue reduction in 2020 relative to 2019 (described below). Further reading: PPP Lenders Accepting Applications in 2021 Second-Draw Requirements For second-draw PPP loans more than $150,000, you must provide proof of 25% loss. Applying for a Second Draw PPP Loan – Key Requirements. PPP Second Draw Loan over $150,000 (capped at $2,000,000) PPP Borrower Application Form SBA Form 2483-SD No additional payroll documentation is required if using same payroll as used for PPP First Draw and Webster was the lender of PPP First Draw. You cannot receive a second-draw loan of up to $2 million unless: Second Draw PPP Loan customers must: Employ 300 or fewer employees or otherwise satisfy size standards contained in the SBA PPP eligibility requirements. The Economic Aid Act, as amended by the ARP Act, provides that a borrower is eligible for a Second Draw PPP Loan only if the borrower meets all of the following eligibility requirements: General eligibility requirements: The eligibility requirements for Second Draw PPP Loans are narrower than the eligibility requirements for First Draw PPP Loans. Eligibility for a second-draw loan comes down to three things: You need to have already exhausted an earlier PPP loan, or will do so soon; you need … Eligibility Requirements • Fewer than 300 employees • Reduction in quarterly revenues of at least 25% compared to the same quarter in 2019 • Stock not traded on a national exchange About the Program PPP Second Draw loans are available for small businesses, non-profits, sole proprietors and independent contractors. Borrowers are permitted to use their average monthly payroll for 2019 or 2020 (excluding costs over $100,000 on an annualized basis) for their Second Draw PPP Loan amount calculation. There are two second draw applications; complete the appropriate application for your business based on the requirements outlined below. Because the SBA wants to ensure that PPP2 funds go to the businesses that need it the most, eligibility requirements for second draw PPP loans are different—and more stringent. Until then, we would like to share some of the information we have on hand so your business can be prepared should you qualify for a second draw PPP loan. Documents needed for proof of 25% revenue reduction (for a second draw PPP) If you’ve received and exhausted a previous first-time PPP loan, you may now qualify for a second draw PPP. The “second draw” PPP loan is only available to people who got a PPP loan previously, and: You must have used your PPP loan for only authorized uses, and Scenario 1: Loans UNDER $150,000, received 1st draw PPP Loan with CVB, and requesting same loan amount The differences between eligibility requirements for first-time and second-time borrowers include: Number of employees. To qualify for a second draw, … If you are interested in applying for Second Draw PPP Loans, or will be a first-time borrower, please take a look at the key requirements below. Start your PPP application. Borrowers can now apply for a Second Draw PPP Loan until March 31, 2021. PPP 2 - NEW PPP Loan Application Second Draw. If you are unable to comple Answer: For a Second Draw PPP Loan amount greater than $150,000, the applicant must provide documentation substantiating the reduction in gross receipts with its Second Draw Borrower Application Form (SBA Form 2483-SD or lender’s equivalent form). Posted on January 25, 2021 by Matteo. This addresses the requirements and issues for the self-employed and sole proprietors, who have no employees, and who wish to apply for a second PPP loan under the new law (“Second Draw PPP … If a business previously received a PPP loan and accepted the full amount, they may qualify for a second draw — in other words, a second loan. PPP SECOND DRAW REQUIRED DOCUMENTATION These instructions were created to help you determine what documentation you will be required to provide for your second draw PPP loan. The eligibility requirements for the Second Draw PPP loan are narrower than the eligibility for First Draw PPP loans. Second Draw PPP Loan Application and Documentation Requirements: The Interim Final Rules did not provide the Second Draw PPP Loan application, which should be … When you must substantiate that you had a 25% loss in gross receipts/gross income (Gross Profit – COGS) between 2020 and 2019, you can do so by choosing one of the following comparison choices: Full year 2020 to full year 2019 For businesses that will be taking out a Second Draw PPP Loan, different or additional eligibility requirements apply. In order to qualify for a second draw PPP loan, a borrower must be able to show a loss in revenue of 25% or more from at least one quarter of 2020 as compared to that same quarter in 2019. Second Draw general requirements. Check in with your lender for information on how to submit an application with them. Step by step of NEW PPP 2.0 loan application. In addition to the documents listed above, you will need one of the following (your choice) to demonstrate your revenue reduction: Central Pacific Bank is committed to making our products and services accessible to meet the banking and financial services needs of all our customers. The PPP interim final rule for Second Draw loans mentions that you’re only eligible if you received a First Draw PPP Loan and, before the Second Draw PPP Loan is disbursed, you will have used the full amount of the First Draw loan funds on eligible expenses. The eligibility requirements for Second Draw PPP Loans are narrower than the eligibility requirements for First Draw PPP Loans. For the general eligibility requirements for Second Draw PPP … The eligibility requirements are narrower for Second Draw PPP Loans with conditions such as: The borrower can only have 300 or fewer employees and. This doesn’t require full forgiveness of the First Draw loan. The scenarios go from simplest to most complex. 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