Paycheck Protection Program (PPP) Updates
The deadline for both first and second draw applicants has been extended to May 31st, 2021. As part of the extension, the SBA will have 30 days after the May 31st deadline to process pending applications.
The Paycheck Protection Program (PPP) has been revised and reopened. PPP loans are designed to help small businesses keep their employees on payroll during COVID-19 and loans from the program are completely forgiven if the money is used for eligible expenses and other conditions are met. Loan amounts are calculated as up to eight weeks of average monthly payroll (based on 2019 figures) including benefits, plus an additional 40% of that amount used for rent, mortgage interest, or utility payments made before February 15, 2020, up to a maximum of $10 million.
First Draw PPP Loans are available for borrowers who have not received a PPP loan before August 8, 2020. Proceeds can be used to help fund payroll costs, including benefits, and may also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.
Click on the PPP First Draw Overview and FAQ Document for more information. To be matched with a participating PPP lender, visit SBA Lender Match and click the PPP First Draw application to get started.
Second Draw PPP Loans are now available for certain eligible borrowers that previously received a PPP loan with the same general loan terms as their First Draw PPP Loan. Businesses are eligible if they received a First Draw PPP Loan and will or have used the full amount only for authorized uses; have no more than 300 employees; and can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
For most borrowers, the maximum loan amount of a Second Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million. For borrowers in the Accommodation and Food Services sector (use NAICS 72 to confirm), the maximum loan amount for a Second Draw PPP Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million.
The SBA has drafted guidance on how to calculate a first draw PPP loan amount as well as how to calculate revenue reduction and a second draw PPP loan amount, and the documentation required for each submission. Click the PPP Second Draw Overview and PPP Second Draw application to get started.
If you have questions about Paycheck Protection Program eligibility or otherwise need assistance, the Pace SBDC team is here to help. Make an appointment for a no-cost, 1:1 advisory session today by emailing sbdc@pace.edu or visiting our website.