The U.S. Small Business Administration (SBA), in consultation with the Treasury Department, announced today that the Paycheck Protection Program (PPP) will re-open the week of January 11 for new borrowers and certain existing PPP borrowers. To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13.  The PPP will open to all participating lenders shortly thereafter. Updated PPP guidance outlining Program changes to enhance its effectiveness and accessibility was released on January 6 in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act.

This round of the PPP continues to prioritize millions of Americans employed by small businesses by authorizing up to $284 billion toward job retention and certain other expenses through March 31, 2021, and by allowing certain existing PPP borrowers to apply for a Second Draw PPP Loan.

HOW TO APPLY AND MORE DETAILS COMING SOON

Key PPP updates include:

• PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;
• PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
• The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, direct marketing organizations, among other types of organizations;
• The PPP provides greater flexibility for seasonal employees;
• Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
• Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.

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.

The new guidance released includes:

• PPP Guidance from SBA Administrator Carranza on Accessing Capital for Minority, Underserved, Veteran, and Women-owned Business Concerns;
• Interim Final Rule on Paycheck Protection Program as Amended by Economic Aid Act; and
• Interim Final Rule on Second Draw PPP Loans.

For 2nd Draw PPP Loans:

Loans under $150,000 – Gross Receipts Reduction in excess of 25%
SBA does not require documentation to evidence the reduction at time of application but does require it prior to seeking loan forgiveness. However, NACCU will require documentation to support the 25% reduction in gross receipts at the time of application to ensure the applicant qualifies.

Loan Amount for Draw 2 Loans –You may use 2019 or 2020 payroll figures to determine your loan amount.

Updated First Draw Forms

• Form 2483 – First Draw Borrower Application (Updated 1/8/21)
• Form 2484 – First Draw Lender Guaranty Application (Updated 1/8/21)

Second Draw Forms

• Form 2483-SD – Second Draw Borrower Application (Released 1/8/21)
• Form 2484-SD – Second Draw Lender Guaranty Application (Released 1/8/21)

Guidance & Resources

• Accessing Capital for Minority Underserved, Veteran and Women-Owned Business Concerns Guidance (Released 1/6/21)
• Top-Line Overview of First Draw PPP Loans (Released 1/8/21)
• Top-Line Overview of Second Draw PPP Loans (Released 1/8/21)
• Interim Final Rule #1 – PPP as Amended by Economic Aid Act (Released 1/6/21)
• Interim Final Rule #2 – PPP Second Draw Loans (Released 1/6/21)
• Procedural Notice – Modifications to SBA Forms 3506, 3507 and 750 CA (PPP only) (Released 1/8/21)
• Procedural Notice - SBA Procedural Notice on Repeal of EIDL Advance Deduction Requirement (Released 1/8/21)
• Procedural Notice- Paycheck Protection Program Excess Loan Amount Errors (Released 1/12/21) (Released 1/15/21)
• Procedural Notice- PPP Borrower Resubmissions of Loan Forgiveness Applications Using Form 3508S, Lender Notice Responsibilities to PPP Borrowers, and Offset of Remittances to
  Lenders for Lender Debts (Released 1/15/21)
• PPP - Documentation Required and How to Calculate Maximum Loan Amounts- First Draw (Released 1/17/21)

Important Information

IMPORTANT TIME LAPSE — NEW FEATURE ALERT FROM SBA:
There will be a time lapse between the time a Lender submits a PPP application to SBA and the time
SBA provides an SBA loan number back to the Lender due to additional front-end compliance checks.

For 2nd Draw PPP Loans:

Loans under $150,000 – Gross Receipts Reduction in excess of 25%
SBA does not require documentation to evidence the reduction at time of application but does require it prior to seeking loan forgiveness. However, we (NavyArmy) will require documentation to support the 25% reduction in gross receipts at the time of application to ensure the applicant qualifies.

*Loan Amount for Draw 2 Loans –You may use 2019 or 2020 payroll figures to determine your loan amount.

For more information on updates, visit sba.gov/ppp or treasury.gov/cares.

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Frequently Asked Questions: