Updated 02/12/2021 2:48 PM EST
Please Note: These are new programs being implemented in real time, and may change frequently. Please check back for updated information.
Use the following links to skip to the relevant section (sections with an * include updated information on the December 2020 relief package)
- Paycheck Protection Program (PPP)*
- Economic Injury Disaster Loans (EIDL)*
- Shuttered Venue Grant Program*
Find your local SBA Field Office at: https://www.sba.gov/tools/local-assistance/districtoffices
Paycheck Protection Program (PPP)
The last day to apply for and receive a PPP loan is March 31, 2021.
PPP Application & Overview
- Most up-to-date information: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program
- If you wish to begin preparing your application, you can download a copy of the PPP borrower application form (First Draw) (Second Draw) to see the information that will be requested from you when you apply with a lender.
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.
We are encouraging many of our in-business clients to apply for the PPP. Start by talking to your commercial bank; most banks are prioritizing current customers. If you don’t have a commercial banking relationship, or your bank isn’t doing PPP loans, you can find a lender at the link.
The SBA and banks are working to close these loans as quickly as possible.
Updates from December 2020 Relief Package
The stimulus bill passed by Congress on December 21, 2020 provides additional funding to and expands the Paycheck Protection Act in several ways:
- Expanded eligibility: The bill expands eligibility for nonprofits and includes set-asides for very small businesses and community-based lenders.
- Second-time loan eligibility: See below.
- Renewed funding: $284 billion for the Paycheck Protection Program (PPP) to provide forgivable loans to first- and second-time small business borrowers.
- Access to the Employee Retention Tax Credit: Businesses taking a PPP loan will now be able to take the Employee Retention Tax Credit (ERTC), when previously they were only allowed to opt into one or the other.
- Expanded eligible expenses: qualifying expenses, have been expanded to include expenses such as covered property damage, supplier costs, or worker protection expenditures in addition to employee wages or operating expenses like rent and utilities.
- Simplified forgiveness application process for loans up to $150,000.
- Clarifies tax implications: businesses can deduct expenses paid with forgiven PPP loans. This clarification applies to old loans and to new loans and does not include guardrails or limitations. Typically, forgiven debt is considered taxable income. In the CARES Act, lawmakers specified that forgiven PPP loans would not count as taxable income.
- EIDL advances will no longer be deducted from the potential forgivable amount of PPP loans. Whereas before, if you received a $1,000 EIDL advance and a $10,000 PPP loan, the maximum forgivable amount of your PPP loan was $9,000. The maximum forgivable amount is now $10,000. Read much more here.
Second Draw PPP Eligibility
- The maximum loan size for second-time borrowers is $2 million. “Second-draw” borrowers must meet ALL the criteria below.
- Second Draw loans are available to businesses, independent contractors, eligible self-employed individuals, sole proprietors, nonprofit organizations eligible for a First Draw PPP Loan, veterans organizations, Tribal business concerns, housing cooperatives, small agricultural cooperatives, eligible 501(c)(6) organizations or destination marketing organizations, or eligible nonprofit news organizations that have used or will use the full amount of the initial PPP loan for authorized purposes on or before the expected date of disbursement of the Second Draw PPP Loan.
- Borrowers must have experienced a revenue reduction of 25% or greater in 2020 relative to 2019. This revenue reduction is calculated by comparing quarterly gross receipts for one quarter in 2020 with the borrower’s gross receipts for the corresponding quarter of 2019.
- For example, a borrower with gross receipts of $50,000 in the second quarter of 2019 and gross receipts of $30,000 in the second quarter of 2020 has experienced a revenue reduction of 40% between the quarters.
- Borrowers must have 300 or fewer employees.
- Any business concern that has more than one physical location and that employs less than 300 employees per physical location is eligible to receive a Second Draw PPP Loan if it is assigned a NAICS code beginning with 72 at the time of loan disbursement and otherwise meets the eligibility criteria.
- They CANNOT be:
- A person or entity that receives a grant for shuttered venue operators under section 324 of the Economic Aid Act
- An entity that has permanently closed.
- A borrower that has temporarily closed or temporarily suspended its business remains eligible for a Second Draw PPP Loan.
- A business concern or entity primarily engaged in political activities or lobbying activities, as defined in section 3 of the Lobbying Disclosure Act of 1995 (2 U.S.C. 1602), including any entity that is organized for research or for engaging in advocacy in areas such as public policy or political strategy or otherwise describes itself as a think tank in any public documents.
What do I need to apply for a Second Draw loan?
- SBA Form 2483-SD, or your lender’s equivalent. It is important to be in communication with your commercial bank, as you’ll work with them to apply for the PPP loan.
- For loans greater than $150,000 the applicant must submit documentation adequate to establish that the applicant experienced a revenue reduction of 25% or greater in 2020 relative to 2019. This might include relevant tax forms, including annual tax forms, or, if relevant tax forms are not available, quarterly financial statements or bank statements.
- For loans with a principal amount of $150,000 or less, such documentation is not required at the time the borrower submits its application for a loan but must be submitted on or before the date the borrower applies for loan forgiveness.
- If you received a First Draw PPP loan and for that loan you used calendar year 2019 to calculate your payroll amount AND if you are using calendar year 2019 to calculate your payroll for your Second Draw PPP loan AND if you are using the same lender you, you do not need to provide additional documentation.
- If you did not receive a First Draw loan, or you are using a different lender than you did for the First Draw:
- If you are self-employed and do NOT have employees, 2019 or 2020 (whichever was used to calculate loan amount) Form 1040 Schedule C, a 2019 or 2020 (whichever was used to calculate loan amount) IRS Form 1099-MISC detailing nonemployee compensation received (box 7), invoice, bank statement, or book of record that establishes that the applicant is self-employed; and a 2020 invoice, bank statement, or book of record to establish that the applicant was in operation on or around February 15, 2020.
- If you are self-employed and have employees: 2019 or 2020 (whichever was used to calculate loan amount) IRS Form 1040 Schedule C, Form 941 (or other tax forms or equivalent payroll processor records containing similar information) and state quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever was used to calculate loan amount), or equivalent payroll processor records, along with evidence of any retirement and employee group health, life, disability, vision and dental insurance contributions, if applicable, must be provided. A payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish the applicant was in operation on February 15, 2020.
- If you are not self-employed, Form 941 (or other tax forms containing similar information) and state quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever was used to calculate payroll), or equivalent payroll processor records, along with evidence of any retirement and employee group 33 health, life, disability, vision and dental insurance contributions, must be provided. A partnership must also include its IRS Form 1065 K-1s.
Have more questions? Contact your CEI Business Advisor or request a consultation at email@example.com
You cannot apply for the PPP through CEI. You must apply through your bank or credit union.
Find a bank lender by zip code: https://www.sba.gov/paycheckprotection/find
PPP Loan Forgiveness
- Video Walkthrough for PPP Forgiveness Applications
- EZ Forgiveness Application
- Full Forgiveness Application (6/16/20)
We expect a new forgiveness application process for loans up to $150,000.
Note: The EZ application requires fewer calculations and less documentation for eligible borrowers. Details regarding the applicability of these provisions are available in the instructions to the new EZ application form.
Both applications give borrowers the option of using the original 8-week covered period (if their loan was made before June 5, 2020) or an extended 24-week covered period. These changes will result in a more efficient process and make it easier for businesses to realize full forgiveness of their PPP loan.
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 have a maturity of 2 years. Loans issued after June 5 have a maturity of 5 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 (either 8 weeks or 24 weeks).
- No collateral or personal guarantees are required.
- Neither the government nor lenders will charge small businesses any fees.
SBA Economic Injury Disaster Loans (EIDL)
The stimulus bill passed by Congress on December 21, 2020 provides $20 billion for new EIDL loans for businesses in low-income communities with an additional $15 billion of dedicated funding set aside for live venues, independent movie theatres, and cultural institutions.
EIDL Application & Overview
- Most up-to-date information: U.S. Small Business Administration Economic Injury Disaster Loan Portal
- Application: https://covid19relief.sba.gov/#/
- Targeted EIDL Advance FAQs: The week of 2/8/21, the Office of Disaster Assistance began outreach to potentially eligible recipients of the Targeted EIDL Advance, a new program in the Economic Aid Act.
Small business owners (fewer than 500 employees or a sole proprietor and/or independent contractors), including agricultural businesses, and nonprofit organizations in all U.S. states, Washington D.C., and territories can apply for an Economic Injury Disaster Loan. The EIDL program is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue due to coronavirus (COVID-19).
(Firefox or Internet Explorer preferred browser for applications. Issues have been identified with Chrome and Safari.)
SHUTTERED VENUE OPERATORS GRANT (SVOG) PROGRAM
SBA’s Office of Disaster hosted a brief webinar, less than 15 minutes, talking about the Shuttered Venue Operators Grant program. If you are interested in learning more please check the video out. The program is geared towards theaters, live performing arts venues, promoters, movie theaters, and some museums, zoos, and aquariums. There will be a lot more information coming soon from the Office of Disaster on this grant program, and funds are limited, so you will want to be ready to go when the program rolls out. The video can be viewed using the links below.