PP2 Relief Funds - Key Information - First Time Borrowers
First Time Small Business Borrowers (who have no existing PPP loan)
Are eligible to apply for these forgivable loans through March 31, 2021 if they meet the following criteria:
Together with their affiliates (if applicable), have 500 or fewer employees
Eligible organizations include:
- Veterans organizations
- Tribal concerns
- Self-employed individuals, Sole proprietorships, and independent contractors
- Entities with more than 500 employees in certain industries that meet SBA’s alternative size standard or SBA’s
size standards for those particular industries can also apply.
- Also eligible to apply for First Draw PPP Loans are businesses with a NAICS Code that begins with 72 (Accommodation and Food Services sector) or eligible news organizations with no more than 500 employees per physical location, as well as housing cooperatives, 501(c)(6) organizations, or destination marketing organizations with no more than 300 employees.
What expenses are covered?
Round 2 of the PPP loans expanded the allowable expenses that can be paid with proceeds.
First Draw PPP Loans can be used to help fund :
- Payroll costs, including benefits
- Mortgage interest
- Worker protection costs related to COVID-19
- Uninsured property damage costs caused by looting or vandalism during 2020
- Certain supplier costs and expenses for operation
How much can I borrow?
In general, first- and second-time PPP borrowers may receive a loan amount of up to 2.5 times their average monthly payroll costs (with a cap per employee of $100,000 annualized) in 2019, 2020, or the year prior to the loan.
The maximum loan amount is $10 million for first-time borrowers and $2 million for second-time PPP borrowers. (See more details for PPP Second Draw Loans here.)
Already have a PPP loan?
Existing PPP borrowers that did not receive loan forgiveness by December 27, 2020 may:
- Reapply for a First Draw PPP Loan if they previously returned some or all of their First Draw PPP Loan funds, or
- Under certain circumstances, request to modify their First Draw PPP Loan amount if they previously did not accept the full amount for which they are eligible
Similar to the first round of PPP loans, the funds are intended to be used to maintain payroll levels.
First Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:
• 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.
Full details are on the SBA Website here.