First Draw PPP Loans
If you did not receive a PPP loan, there are additional PPP funds available for eligible organizations.
- Your organization must employ fewer than 500 full-time, part-time, or seasonal employees
- Your organization was operational prior to February 15, 2020 and remains operational.
- Business types allowed include: certain non-profit organizations, housing cooperatives, veterans’ organizations, Tribal businesses concerns, eligible self-employed individuals, sole proprietors, independent contractors, or small agricultural cooperatives.
The maximum amount an organization that has not already received a PPP loan can borrow is the lesser of:
- 2.5 times the average monthly payroll costs and benefit costs
- $10 million
Second Draw PPP Loans
If you received a PPP loan, you may be eligible for a Second Draw PPP Loan.
- Your organization must employ 300 or fewer employees. Note: there is alternative criteria for businesses with NAICS code beginning with 72, 511110, or 5151.
- You can demonstrate a 25% reduction in revenue in any quarter of 2020 when compared to the same quarter of 2019
- You have used or will use the full amount of your first PPP loan
- Your business was operational prior to February 15, 2020 and remains operational
- Business types allowed include: certain nonprofit organizations, housing cooperatives, veterans’ organizations, Tribal businesses concerns, eligible self-employed individuals, sole proprietors, independent contractors or small agricultural cooperatives.
The maximum amount an organization with an existing PPP loan can receive is the lesser of:
- 2.5 times the average monthly payroll and benefit costs in 2019 or 2020 or;
- 3.5 times the average monthly payroll and benefit costs in 2019 or 2020 for any business that is classified under Code 72 by the North American Industry Classification System (NAICS) or;
- $2 million
Use of PPP Funds
60% of the loan must be spent on the following:
- Employee payroll costs
- Group health insurance payments
- Dental and vision plans
- Disability benefits
- Life insurance
- Owner compensation costs
40% must be used only for the following expenses:
- Interest on mortgage payments
- Business software or cloud services that facilitate business operations
- Costs related to property damage, vandalism or looting due to unrest that occurred in 2020
- Supplier costs that are essential to the operations of the business
- Personal Protection Equipment (PPE) that help businesses comply with federal and state COVID-19 safety guidelines
- Measures that help businesses comply with federal and state COVID-19 safety guidelines
You must maintain detailed records and documentation for these expenses in order to qualify for forgiveness.
The terms and information outlined above are subject to change upon further guidance from the U.S. Small Business Administration and the U.S. government.
All loans subject to credit approval and final guidance from the SBA on the Paycheck Protection Program. Funds are limited and subject to availability.
The information provided is solely for general knowledge and does not provide any professional advice regarding tax, accounting, legal, financial, or any other professional service. PPP borrowers should contact their professional service providers for a complete understanding of the PPP program requirements and forgiveness processes.
SBA regulations regarding the PPP program are subject to further limitations and changes. Borrowers must follow current regulations and processes based on SBA guidelines. All characteristics described above are from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Economic Aid Act), and/or the Coronavirus Response and Relief Supplemental Appropriations Act. The terms and information outlined above are subject to change upon further rulemaking or guidance from the U.S. Small Business Administration and the U.S. government.