Newburg Staff Writers-January 11th, 2021 (4:00PM)
We wanted to provide you some updates from the PPP programs.
PPP1 (original ‘first round’ program from 2020) applications available today January 11.
Note that this is for select lenders and borrowers.
  • If you did not apply for the PPP loan in the first round, you should contact your bank to do so as soon as possible.
  • Revised loan program re-opening on Jan. 11, initially to first-time borrowers
    • The Small Business Administration will restrict lending on Monday and Tuesday, the first two days of the program, to community-based lenders like CDFIs making loans to first-time borrowers.
    • Starting with small community lenders and focuses on minorities, women, veterans and underserved communities
    • The SBA says those lenders include community financial institutions, minority depository institutions, certified development companies and microlender intermediaries.
    • That restriction follows criticism that businesses with strong banking relationships and more resources were more easily able to access money from the first round of the program than were their smaller, less-resourced peers.
  • Form 2483 – Paycheck Protection Program Borrower Application Form

PPP2 (NEW) applications will open after Jan. 13 – to second-time borrowers (PPP2)

  • On Wednesday, the program will open up to second-time borrowers that can demonstrate a 25% or more quarter over quarter decline in gross receipts between 2019 and 2020 (must have 300 employees or fewer). The establishment cannot be permanently closed. Businesses that have temporarily closed or suspended operations can receive a second-draw loan.
  • The SBA indicated that larger lenders will be able to begin making loans under the updated program “shortly” after Wednesday, January 13, but did not specify an exact date.
  • The new application form for the second round of PPP is now available, Form 2483-SD – PPP Second Draw Borrower Application Form
  • Not all banks will be ready to launch with the application this Wednesday so we strongly recommend reaching out to your bank to get in tune with their application timeline and confirm when they will begin to accept the PPP2 loan applications.
  • Businesses seeking $150,000 or less will not be required to provide sales records or formally submit the gross receipts decline when they apply for a second-draw loan but will need to do so when they apply for loan forgiveness.
PPP2 borrowers may receive a loan amount of up to:
  • 2.5 times their average monthly payroll costs in the year prior to the loan or the calendar year, the same as with PPP1, but the maximum loan amount has been cut from $10 million in the first round to the previously mentioned $2 million maximum.
  • 3.5 times their average monthly payroll costs in the year prior to the loan or the calendar year – for PPP borrowers with NAICS codes starting with 72 (hotels and restaurants) subject to a $2 million maximum.
The program is slated to close on Marc 31 ,2021 for both first (PPP1) and second-time (PPP2) applicants. Borrowers can elect to accrue their forgivable expenses over an 8-week or 24-week period following the date of the loan disbursement.
We will provide more updates on the PPP loan programs in the coming days and are hopeful that the PPP2 program will entail far fewer changes along the way than the original program.
In the meantime, please feel free to refer back to our newsletter:
Please contact us should you have any questions.