Congress has passed legislation, the "Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act", providing additional Paycheck Protection Program (PPP) funding. The deadline to apply for a PPP loan is March 31, 2021 or until funds run out.
There are two loan types under the new program: First Draw Loans (for businesses that are applying for PPP funds for the first time), and Second Draw Loans (for customers who received a PPP loan in 2020).
First Draw PPP Loan Summary
- This is your first PPP loan.
- You are a business with 500 or fewer employees.
- Employee and compensation levels are maintained.
- The loan proceeds are spent on payroll costs and other eligible expenses.
- At least 60 percent of the proceeds are spent on payroll costs.
- The amount of First Draw PPP Loans will be capped at $10,000,000.
Second Draw PPP Loan Summary
- Your business previously received a First Draw PPP Loan and will or has used the full amount only for eligible expenses
- You are a business with 300 or fewer employees.
- You demonstrate at least a 25% reduction in gross receipts in any quarter of 2020 relative to the same quarter in 2019.
- Employee and compensation levels are maintained.
- The loan proceeds are spent on payroll costs and other eligible expenses.
- At least 60 percent of the proceeds are spent on payroll costs.
- The amount of second round PPP loans will generally be 2.5x average monthly payroll costs (except for certain industries like restaurants and accommodations) and will be capped at $2,000,000.
Forgiveness
Borrowers may be eligible for forgiveness. Click here to see the full details