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Paycheck Protection Program (PPP)
PPP Second Draw Loans
The most recent stimulus package passed by the U. S. Government includes new funding for the Paycheck Protection Program (PPP). On January 6, 2021, the US Small Business Administration (SBA) released guidance on PPP Second Draw Loans.
Eligibility Requirements
The general eligibility requirements are similar to the first draw, with a few changes:
- The business must employ no more than 300 employees
- The ability to demonstrate at least a 25% reduction in receipts during any quarter in 2020 when compared to that same quarter in 2019
- The PPP forgiveness funds will not count towards this revenue calculation
- A 25% decrease in revenue on an annual basis between 2020 and 2019 is also acceptable
- The entire amount of the first draw funds must have been spent on eligible PPP loan expenses (or will have spent by the expected date of disbursement of the 2nd draw loan)
- Publicly traded companies are no longer eligible
Loan Terms
The key terms of the PPP second draw loan remain similar to the PPP first draw:
- The loan will be equal to 2.5 times the average monthly payroll. Businesses in the Accommodations and Food Services industry (NAICS code 72) are eligible for a loan amount of 3.5 times average monthly payroll cost.
- The maximum loan amount is $2,000,000
- Interest rate of 1.00% and a term of 5 years
- Repayment is deferred
- Other terms, conditions and limitations apply
Eligible Uses of PPP Funds
The eligible uses of the PPP loan will be the same as the first draw, with the addition of:
- Worker protection costs related to COVID-19
- Uninsured property damage costs caused by looting vandalism during 2020
- Certain supplier costs and operational expenses
A minimum of 60% of the funds must cover payroll costs and the loan funds must be spent within 24 weeks.
Preparing Documentation
There are 4 things you will need to submit your online application:
- Average Monthly Payroll Expenses – the same information may be used from the Round 1 application. You can also use our PPP Loan Calculator Workbook, which is linked below.
- Payroll Documentation – the list can be found within the PPP Loan Calculator Workbook
- 25% Revenue Reduction Documentation
- Entity Documentation – copies of formation documents (i.e. Articles of Incorporation, Certificate of Formation, etc.)
Here’s everything you need to know:
Q. What is the C&N PPP Loan Portal?
- The C&N PPP Portal is an online system that you will access to:
- Submit and sign your PPP Second Draw Loan Application electronically
- Upload supporting documentation
- Communicate directly with the C&N team
Q. What are the eligibility requirements to apply for a PPP loan with C&N?
A. Borrowers must have an active C&N Business Checking account prior to applying through our PPP Portal.
Q. Is there any other way to apply for a PPP Loan with C&N?
A. The C&N PPP Portal is the only way to apply through C&N.
Q. Is there anything I can do in advance to prepare?
To make sure you're prepared when the PPP Portal is open, we encourage you to review the most current SBA Guidance and Applications found below.
For more information on SBA’s assistance to small businesses, visit sba.gov/ppp or treasury.gov/cares.
Guidance & Resources
INTERIM FINAL RULE ON PAYCHECK PROTECTION PROGRAM AS AMENDED BY ECONOMIC AID ACT
INTERIM FINAL RULE ON SECOND DRAW PPP LOANS
U.S. DEPARTMENT OF THE TREASURY
Second Draw Forms
FORM 2483-SD - SECOND DRAW BORROW APPLICATION
FORM 2483-SD-C - SECOND DRAW BORROW APPLICATION: FILERS USING GROSS INCOME
PPP First Draw Loans
In addition to Second Draw PPP Loans, the most recent stimulus package passed by the U. S. Government includes new funding for the original Paycheck Protection Program (PPP) for Borrowers who have not yet received a PPP First Draw Loan. First Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can 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. First Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:
- Employee and compensation levels are maintained;
- The loan proceeds are spent on payroll costs and other eligible expenses; and
- At least 60 percent of the proceeds are spent on payroll costs.
Eligible small entities, that together with their affiliates (if applicable), have 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors—can apply. First Draw PPP loans are not subject to the 25% revenue reduction requirement. This requirement is only for Second Draw PPP loan applicants.
If you are interested in applying for a PPP First Draw Loan, please utilize the C&N PPP Loan Portal.
PPP FIRST DRAW BORROWER APPLICATION
