![]() ![]() On January 8, 2021, the SBA announced that to promote access for smaller lenders and their customers, the SBA will initially only accept Second Draw PPP Loan applications from community financial institutions starting on January 13, 2021. Eligible lenders are SBA 7(a) lenders and any federally insured depository institution, federally insured credit union, eligible non-bank lender, or Farm Credit System institution that is participating in the Paycheck Protection Program. Borrowers should contact their lenders to learn when those lenders will begin accepting applications for Second Draw PPP Loans. The last day to apply for and receive a Second Draw PPP Loan is March 31, 2021. Deadline and Fund Availability and Some Lender Requirements: Loans to Borrowers with Unresolved First Draw PPP Loansġ.Safe Harbor for Certifications Concerning Need for a Second Draw PPP Loan.Second Draw PPP Loan Application, Documentation Requirements, and Certifications.Maximum Loan Amount Payroll Cost Calculations, Use of Funds.This article summarizes 10 key items relating to the Second Draw PPP Loans: This article includes those changes as they affect Second Draw PPP Loans.įor more information on the Consolidated First Draw PPP IFR and March 2021 IFR, see our article “ What to Know about the Paycheck Protection Program, Round Two.” For purposes of this article and the Second Draw Rules, first round Paycheck Protection Program (“PPP”) Loans are “First Draw PPP Loans” and second round loans are “Second Draw PPP Loans.” Since the issuance of the Second Draw Rules, the SBA in consultation with the Department of the Treasury has released further guidance and forms. On March 12, 2021, the SBA updated the Frequently Asked Questions (“FAQs”) and updated the documents on how to calculate maximum loan amounts. On March 11, 2021, the American Rescue Plan Act of 2021 (the “ARP Act”) was enacted and certain eligibility changes were made to the Second Draw PPP Loan program and an additional $7.25 billion was added for PPP Loans. On March 3, 2021, the SBA posted: (a) a revised Borrower Application Form and a revised Second Draw Borrower Application Form (b) Borrower Application for Schedule C Filers Using Gross Income (c) Second Draw Borrower Application Form for Schedule C Filers using Gross Income (d) revised lender application form and a revised PPP second-draw lender application form (e) Updated Frequently Asked Questions, including FAQ 57-63 and (e) Interim Final Rule on Loan Amount Calculating and Eligibility (“March 2021 IFR”). See “ PPP: Changes by the Biden–Harris Administration” (February 23, 2021). On February 22, 2021, the Biden-Harris Administration and the SBA announced the taking of certain steps with the PPP to further promote equitable relief for smaller businesses. For more information on the Consolidated First Draw PPP IFR, see our article “ What to Know about the Paycheck Protection Program, Round Two.” That rule restates existing regulatory provisions into a single regulation on borrower eligibility, lender eligibility, and loan application or origination requirement issues for new First Draw PPP Loans, as well as general rules relating to First Draw PPP Loan increases and loan forgiveness. ![]() The SBA also released an Interim Final Rule called “Business Loan Program Temporary Changes Paycheck Protection Program as Amended by Economic Aid Act” (“ Consolidated First Draw PPP IFR”). These rules announced the implementation of section 311 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “ Economic Aid Act”). On January 6, 2021, the Small Business Administration (the “ SBA”) and the Department of Treasury released an Interim Final Rule called “Business Loan Program Temporary Changes Paycheck Protection Second Draw Loans” (“ Second Draw Rules”). ![]()
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