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Additional Paycheck Protection Program Information

Congress has approved the release of $284 billion in additional funding for the Paycheck Protection Program (PPP). There are currently two loan types available.

Click here to find more information on the PPP.

Second Draw PPP Loan

The Second Draw PPP Loan is for businesses who received PPP funds in 2020 and would like to apply for another PPP Loan. The following are some of the key considerations for Second Draw PPP Loans:

  • The applicant must have used all of the funds from their First Draw PPP Loan before they are eligible to receive a Second Draw PPP Loan.
  • The applicant must certify that current economic uncertainty makes the loan request necessary to support the ongoing operations of the business.
  • The maximum loan amount will be based on average monthly payroll expenses verified through acceptable supporting documentation. This supporting documentation includes:
    • PEO Payroll Summary for 2019, 2020, or a rolling 12-month period up until the loan application date.
    • IRS Form 941's for 2019 or 2020.
    • IRS Form 1040 Schedule C and any IRS Form 1099's for 2019 or 2020 (Sole Proprietorships only).
    • IRS Form 1065 Schedule K-1 for 2019 or 2020 (Partnerships only).
  • If acceptable supporting payroll documentation was previously submitted to CapEd in order to obtain your First Draw PPP Loan in 2020, then you will not be required to submit any additional payroll documentation. However, you are able to submit new/updated supporting documentation at your discretion. Note: CapEd will still complete a review of existing payroll documentation on file for each borrower to ensure accuracy and compliance with SBA guidelines.
  • Businesses in the Hotel or Restaurant industry with an NAICS Code 72 are eligible to receive 3.5x their average monthly payroll expenses. All other businesses are eligible to receive 2.5x their average monthly payroll expenses.
  • Applicants must certify a decrease in gross revenue of no less than 25% between one quarter of 2020 and the same quarter in 2019 (i.e. Q2 of 2020 vs Q2 of 2019). The certification of an annual decrease in gross receipts between 2019 and 2020 is also acceptable.
    • At the time of application, applicants of loan amounts greater than $150k will be required to submit acceptable supporting documentation to verify the decrease in gross receipts stated on the application. This supporting documentation can include:
      • Quarterly or annual tax forms
      • Quarterly or annual financial statements
      • Bank statements
    • Applicants of loan amounts up to $150k will not be required to submit supporting documentation to verify the decrease in gross receipts stated on the application. However, such supporting documentation will be required on or before the date the borrower submits an application to have the loan forgiven.
  • In order to be eligible for forgiveness, no less than 60% of the funds must be used on payroll expenses and no more than 40% of the funds can be used on approved non-payroll expenses. Approved non-payroll expenses include
    • Rent
    • Utilities
    • Mortgage interest payments
    • Worker protection costs related to COVID-19
    • Uninsured property damage costs caused by looting or vandalism in 2020
    • Certain supplier costs and expenses for operations

First Draw PPP Loan

The First Draw PPP Loan is for first-time PPP borrowers who did not receive any PPP funds in 2020. The following are some of the key considerations for a First Draw PPP Loan.

  • The business must have been existing on or before February 15, 2020.
  • The applicant must certify that current economic uncertainty makes the loan request necessary to support the ongoing operations of the business.
  • The maximum loan amount will be based on 2.5x the average monthly payroll expenses verified through acceptable supporting documentation. This supporting documentation includes:
    • PEO Payroll Summary for 2019, 2020, or a rolling 12-month period up until the loan application date.
    • IRS Form 941's for 2019 or 2020.
    • IRS Form 1040 Schedule C and any IRS Form 1099's for 2019 or 2020 (Sole Proprietorships only).
    • IRS Form 1065 Schedule K-1 for 2019 or 2020 (Partnerships only).
  • In order to be eligible for forgiveness, no less than 60% of the funds must be used on payroll expenses and no more than 40% of the funds can be used on approved non-payroll expenses. Approved non-payroll expenses include:
    • Rent
    • Utilities
    • Mortgage interest payments
    • Worker protection costs related to COVID-19
    • Uninsured property damage costs caused by looting or vandalism in 2020
    • Certain supplier costs and expenses for operations
Disclosures

All Paycheck Protection Program loans are subject to credit approval and program guidelines.

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