The SBA has reopened the groundbreaking Paycheck Protection Program (PPP) for first draw and second draw loans. The law allows first draw loans (businesses that did not receive a PPP in 2020) under the same general terms and with the same limits as the initial PPP loans, with some key enhancements made by the Economic Aid Act.
Any borrower who received a PPP loan in 2020 received a "first draw" PPP Loan and is not eligible to receive another first draw PPP Loan, but may be eligible for a second draw PPP loan. Second draw loans are generally subject to the same terms, conditions and requirements as the original program including the condition that at least 60% of the PPP loan be used for payroll costs. The primary differences for second draw loans are the expansion of non-payroll permitted expenditures, the eligibility conditions and the maximum loan amount.
To be eligible, a business must:
- have 300 or fewer employees;
- be able to demonstrate a 25% or greater revenue drop in any quarter in 2020 as compared to the same quarter in 2019;
- have used or will use the full amount of their first PPP loan on eligible expenses, on or before the disbursement of a draw 2 loan.
The maximum loan amount is $2 million or 2.5 times (3.5x for entities with NAICS code 72) average monthly payroll costs, whichever is less.
The program ends March 31, 2021.
To provide a familiar and efficient process, all new first draw and second draw loan applications will go through the same system we are using for forgiveness applications. This will provide an enhanced customer experience for our existing PPP customers as much of the required application information will be prefilled from the forgiveness portal.
- Due to volume, we are only taking applications from existing customers. Contact us to open an account today, or give us a call at 1-888-842-0221.
- We will not accept ANY paper applications. All applications must be submitted digitally through our selected partner and secure portal.
- All existing PPP customers have received an email with instructions to log into the portal.
- If you do not have a round 1 PPP loan, are a customer, and would like a round 2 / 1st draw PPP loan, contact your business banker or email email@example.com.
- Paycheck Protection Program First Draw Borrower Application Form (1/08/2021)
- Paycheck Protection Program Second Draw Borrower Application Form (1/08/2021)
The Consolidated Appropriations Act of 2021 includes a simplified forgiveness process for loans of $150,000 and less. The SBA has been instructed to develop a one-page form, but this has not yet been released.
The relief bill also clarifies that any EIDL advances received will not reduce PPP loan forgiveness. This was corrected on SBA forgiveness payments as of December 29, 2020. For customers whose forgiveness payment was reduced by an EIDL Advance, no payments are due and SBA will remit a reconciliation payment to IncredibleBank, however, no timeframe has been given on when this will occur. Please see attached borrower communication for more details.
Applications are being accepted via our digital channel. If you would like to apply, please provide the email address and cell phone of the person who will be completing the application to your business banker or firstname.lastname@example.org. We will provide you with a unique forgiveness link to a secure portal that walks you through the application.