PayCHECK PROTECTION PROGRAM
The Paycheck Protection Program Round 2
SBA, in consultation with the U.S. Treasury Department, reopened the Paycheck Protection Program (PPP) for First Draw PPP Loans the week of January 11, 2021. SBA will begin accepting applications for Second Draw PPP Loans on January 13, 2021.
To promote access for smaller lenders and their customers, SBA will initially only accept Second Draw PPP Loan applications from participating community financial institutions (CFIs), which include Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs), and Microloan Intermediaries. Paycheck Protection Program lending will reopen to all participating lenders shortly thereafter. At least $25 billion is being set aside for Second Draw PPP Loans to eligible borrowers with a maximum of 10 employees or for loans of $250,000 or less to eligible borrowers in low or moderate income neighborhoods.
Loan details
The Paycheck Protection Program (PPP) now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan terms as their First Draw PPP Loan.
Second 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.
Maximum loan amount and increased assistance for accommodation and food services businesses
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.
Who may qualify
A borrower is generally eligible for a Second Draw PPP Loan if the borrower:
- Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses
- Has no more than 300 employees; and
- Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
How and when to apply
You can apply for a Second Draw PPP Loan from January 13, 2021, until March 31, 2021. To promote access for smaller lenders and their customers, SBA will initially only accept Second Draw PPP Loan applications from participating community financial institutions (CFIs). All Second Draw PPP Loans will have the same terms regardless of lender or borrower.
If you wish to begin preparing your application, contact SpotOn Financial today to submit your application and package your request.
AGENT Compensation
SpotOn Financial is classified as an "Agent". Agents or authorized representatives assisting businesses in obtaining a Paycheck Protection Program loan from the U.S. Small Business Administration (SBA) may be eligible to receive an agent fee.
Based on current guidance, A bank will pay agent fees if:
- The agent’s relationship with the borrower was disclosed prior to the loan disbursement date;
- The agent is not a paid employee of the borrower;
- The agent and borrower submit a fully executed Form 159; and
- The agent provides supporting documentation, including a detailed explanation of the work activities performed and an itemized list of the hours spent working on each activity.
A Lenders' specific Paycheck Protection Program agent fee reimbursement process is subject to change pending additional guidance anticipated from the SBA. Eligible agents will receive payment after a bank receives lender fees from the SBA for their client’s loan.
Let's See If You Qualify?
Ths Small Business Administration is currently funding small businesses to continue the economic growth of America. Your business can qualify with the right partner to support your request. SpotOn Financial can help you get the vital capital you need backed by the United States SBA.