Program Summary

The PPP is a federal loan program administered by the Small Business Administration (SBA) that is part of the stimulus package known as the CARES Act. PPP loans help small- and medium-sized businesses affected by the COVID-19 pandemic by assisting with covering costs related to payroll and certain other operating expenses.

Major PPP Milestones

  • March 3, 2021: The Small Business Administration (SBA) announced new loan calculations for Sole Proprietors, Independent Contractors and Self-Employed Individuals that file a Schedule C on their Federal Tax Returns. Those filers will now have the option to use their Gross Income on Line 7 of Schedule C to calculate the maximum Paycheck Protection Program (PPP) First Draw or Second Draw loan amount. There are separate calculations for businesses that have employees or those that do not have any employees. SBA also released two new forms that we have included here on the website for your reference. The first is the 2483-C for First Draw applicants and the second form is the 2483-SD-C for Second Draw applicants. Each application form includes a new calculation table to help guide applicants on how to calculate the maximum loan amount according to the updated rules. These new forms will be available in our PPP Portal on or about Monday, March 15th. Important Note: SBA has also announced that a borrower whose PPP loan has already been approved cannot request an increase based on the new calculation methodology.
  • Feb 23, 2021: Announcement on new 2021 PPP Applications: Beginning on Wednesday, February 24 at 8:00am the Small Business Administration (SBA) will only accept Paycheck Protection Program loan applications for First Draw and Second Draw loans from businesses that have less than 20 employees. This new exclusive application period will be instituted for 14 days and all businesses will then be able to submit applications again on Wednesday, March 10th. As announced by the Biden-Harris administration, 98% of small businesses have fewer than 20 employees and this period will ensure that they have access to funding they may need.
  • December 27, 2020: A second stimulus package is signed into law, providing an additional $284.45 billion in funding for PPP.

Most Recent Updates

December COVID Relief Bill and the Paycheck Protection Program

First Draw Loans Businesses that did not receive a PPP Loan in 2020 are eligible for a new First Draw Loan

  • Maximum loan amount of $10,000,000
  • Loan amount is based on average monthly payroll costs from either 2019 or 2020 and multiplied by 2.5
  • Must have less than 500 employees
  • Loan term of 5 years with an interest rate of 1%
  • Funds must be used for an eligible purpose within an 8-24 week covered period
  • No payments are required until 10 months after the end of the covered period
  • Loans can be fully forgiven if proceeds are used for an eligible purpose and employee & compensation levels are maintained

Second Draw Loans Businesses that received a PPP Loan in 2020 are eligible for a new Second Draw Loan

  • Maximum loan amount of $2,000,000
  • Loan amount is based on average monthly payroll costs from either 2019 or 2020 and multiplied by 2.5 for most businesses and any business that has a NAICS Code starting with 72 the multiplier is 3.5 times
  • Must have less than 300 employees
  • The business must demonstrate a reduction of at least 25% of their gross receipts in at least one quarter in 2020
  • Loan term of 5 years with an interest rate of 1%
  • Funds must be used for an eligible purpose within an 8-24 week covered period
  • No payments are required until 10 months after the end of the covered period
  • Loans can be fully forgiven if proceeds are used for an eligible purpose and employee & compensation levels are maintained
  1. The borrower must certify that they had at least a 25% reduction in gross receipts in at least one quarter of 2020 compared to the same quarter of 2019. If they show a reduction on an annual basis of at least 25% you can assume that they had a reduction in at least one quarter.
  2. All borrowers must provide supporting documentation of this reduction at the time of application. If the documentation is not audited financial statements the borrower must sign and date the first page and then initial each page after in order to certify the validity of the documents.
  3. IF the borrower has affiliates as defined by SBA they must include gross receipts from all affiliates and demonstrate a reduction on an aggregate basis unless they qualify for an exemption. This is on page 4 of the Second Draw Borrower Application Form: Gross receipts of a borrower must be aggregated with gross receipts of its affiliates.
    • Affiliate is defined as any entity that has common controlling ownership or common management of a non-profit entity; common ownership/management that has 20% or more interest in the company.
    • Exemptions:
      • Businesses with an NAICS code starting with 72 if they employ 300 or fewer employees
      • Eligible news organizations with NAICS code of 511110 or 5151 if the employ 300 or fewer employees per physical location
      • Religious organizations are not affiliated simply because they practice the same religion
      • A franchise that is assigned a franchise identifier code by SBA
      • Any business that receives financial assistance from a company licensed under section 301 of the Small Business Investment Act of 1958
    • Gross receipts that are exempt
      • Proceeds from transactions between a concern and its domestic or foreign affiliates are not included
    • If a borrower acquired an affiliate in 2020 gross receipts from the acquired or acquiring concern must be included for the entire period of measurement not just the period after the affiliation arose Gross receipts of a former affiliate are not included, this applies to the entire period of measurement not just after the affiliation ceased

Streamlined Forgiveness of Loan $150,000 and Less

  • A new application form is in process for these loans and will be released by SBA soon
  • No calculations are required
  • Automatic forgiveness if the borrower can compete certain certifications and provide supporting documentation required

Expanded Use of Proceeds

  • Covered payroll and other expenses. No changes to the original covered expenses, which included payroll costs, mortgage interest, rent and utilities.
  • Covered operations expenditures. Payment for any software, cloud computing, and other human resources and accounting needs.
  • Covered property damage costs. Costs related to property damage due to public disturbances that occurred during 2020 that are not covered by insurance.
  • Covered supplier costs. Expenditures to a supplier pursuant to a contract, purchase order or order for goods in effect prior to taking out the loan that are essential to the recipient’s operations at the time at which the expenditure was made. Supplier costs of perishable goods can be made before or during the life of the loan.
  • Covered worker protection expenditures. Personal protective equipment and adaptive investments to help a loan recipient comply with federal health and safety guidelines or any equivalent State and local guidance related to COVID-19 during the period between March 1, 2020 and the end of the national emergency declaration.