Paycheck Protection Program Extended through May 31, 2021, Providing Small Businesses with Extra Time to Apply.

The PPP a low-interest Small Business Administration loan program helping small businesses keep employees on their payrolls. PPP is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The program will consist of First and Second Draw programs.  In addition to the Loan program, the SBA offers loan forgiveness for qualified recipients.

If you have not received a Paycheck Protection Program (PPP) loan before, First Draw PPP loans may be available to you.

First Draw PPP loans can be used to help fund payroll costs, including benefits, and may also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses.

• PPP loans have an interest rate of 1%.
• Loans issued prior to June 5, 2020, have a maturity of two years. Loans issued after June 5, 2020, have a maturity of five years.
• Loan payments will be deferred for borrowers who apply for loan forgiveness until SBA remits the borrower's loan forgiveness amount to the lender. If a borrower does not apply for loan forgiveness, payments are deferred 10 months after the end of the covered period for the borrower’s loan forgiveness (between 8 and 24 weeks).
• No collateral or personal guarantees are required.
• Neither the government nor lenders will charge small businesses any fees.

Who may qualify?

The following entities affected by COVID-19 may be eligible:

• Sole proprietors, independent contractors, and self-employed persons
• Any small business concern that meets SBA’s size standards (either the industry size standard or the alternative size standard)
• Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans’ organization, or tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
  • 500 employees, or
  • That meets the SBA industry size standard if more than 500
• Any business with a NAICS code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location.

Second Draw PPP Loan

If you have previously received a Paycheck Protection Program (PPP) loan, certain businesses are eligible for a Second Draw PPP loan.

Second Draw PPP loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

The maximum loan amount and increased assistance for accommodation and food services businesses

For most borrowers, the maximum loan amount of a Second Draw PPP loan is 2.5x the average monthly 2019 or 2020 payroll costs up to $2 million. For borrowers in the Accommodation and Food Services sector (use NAICS 72 to confirm), the maximum loan amount for a Second Draw PPP loan is 3.5x the average monthly 2019 or 2020 payroll costs up to $2 million.

Who may qualify?

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.

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