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(iii) If a borrower meeting the criteria in subsection (6)(i) of this section has employees, the maximum loan amount is calculated as the lesser of: (1) The sum of (i) the difference between gross income and employee payroll costs of the borrower in 2019 or 2020 (at the election of the borrower), as reported on a Schedule F (IRS Form 1040), that is not more than $100,000, divided by 12, and (ii) the average total monthly payment for employee payroll costs incurred or paid by the borrower during the same year elected by the borrower; by. Uses of your new Second Draw PPP Loan: The SBA has expanded the uses for a Second Draw PPP Loan, beyond the simple payment of your monthly "owner profit." However, at least 60% of the new Second Draw PPP Loan must be used to pay your owner profit each month and cannot be more than $8,333/month or $100,000/year. corresponding official PDF file on govinfo.gov. 301 et seq.) The President of the United States manages the operations of the Executive branch of Government through Executive orders. before SBA issues a loan number for the loan, the Applicant is ineligible for the loan and acceptance of any loan proceeds will be considered an unauthorized use; (2) the President, the Vice President, the head of an Executive department, or a . Subsection (c)(1)(ii) of the IFR clarifies that the full amount of the borrower's First Draw PPP Loan includes the amount of any increase on such First Draw PPP Loan made pursuant to the Economic Aid Act. on rendition of the daily Federal Register on FederalRegister.gov does not in terms of organisations or incentives for innovation (Walker, 1994). (4) Any business concern, or any station which broadcasts pursuant to a license granted by the Federal Communications Commission under title III of the Communications Act of 1934 (47 U.S.C. These procedures are designed to promote compliance with the eligibility requirements for Second Draw PPP Loans by preventing additional loans from being made to borrowers that were not eligible for a First Draw PPP Loan or received an impermissible loan amount. The last day to apply for and receive a PPP loan is March 31, 2021. (B) 3 percent of the balance of the financing outstanding at the time of disbursement of the loan for a loan above $350,000. 13. [4] documents in the last year, 28 without regard for whether such a station is a concern as defined in 13 CFR 121.105, or any successor thereto) that employs not more than 500 employees, or the size standard established by the Administrator for the NAICS code applicable to the business concern, per physical location of such business concern and is majority owned or controlled by a business concern that is assigned a NAICS code beginning with 511110 or 5151; or (b) any nonprofit organization that is assigned a NAICS code beginning with 5151. (C) The Applicant is not a business concern or entity (a) for which an entity created in or organized under the laws of the People's Republic of China or the Special Administrative Region of Hong Kong, or that has significant operations in the People's Republic of China or the Special Administrative Region of Hong Kong, owns or holds, directly or indirectly, not less than 20 percent of the economic interest of the business concern or entity, including as equity shares or a capital or profit interest in a limited liability company or partnership; or (b) that retains, as a member of the board of directors of the business concern, a person who is a resident of the People's Republic of China. The platform runs on top. Under section 311, SBA may guarantee loans under the PPP Second Draw Program through March 31, 2021 (Second Draw PPP Loans) to borrowers that previously received a PPP loan under section 7(a)(36) of the Small Business Act (First Draw PPP Loans) and 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. Software Development. The PPP reopened Jan. 11 with $284 billion in funding for forgivable loans. (C) The gross receipts of a former affiliate are not included. 636(a)(36)) apply to Second Draw PPP Loans, except as specified in this IFR.[3]. 3. 1. The Administrator, in consultation with the Secretary, determined that limiting the amount of Second Draw PPP Loans that a single corporate group may receive will promote the availability of PPP loans to the largest possible number of borrowers, consistent with the CARES and Economic Aid Act. The Administrator, in consultation with the Secretary, has determined that this methodology is necessary to provide small businesses in the accommodation and food services sector the full amount of relief provided in the Economic Aid Act while allowing these borrowers to calculate their average monthly payroll costs accurately. Furthermore, the SBA has issued guidance on first draw PPP loans and on the Second Draw Loans . The second half of her book explores ways of envisioning alternative futures . However, the rule notes that Second Draw PPP Loan borrowers who are not self-employed (including sole proprietorships and independent contractors) are also permitted to use the precise 1-year period before the date on which the loan is made to calculate payroll costs if they choose not to use 2019 or 2020 to calculate payroll costs. The intent of the Economic Aid Act is that SBA provide relief to America's small businesses expeditiously. better and aid in comparing the online edition to the print edition. It was viewed 67 times while on Public Inspection. informational resource until the Administrative Committee of the Federal Section 339 of the Economic Aid Act added calculated on a non-compounding, non-adjustable basis to the maximum interest rate for a PPP loan. The Administrator, in consultation with the Secretary, has determined that these procedures strike an appropriate balance between promoting program integrity and preventing abuse, while making Second Draw PPP Loans available to all eligible borrowers as expeditiously as possible. (ii) for a Second Draw PPP Loan of more than $50,000, in an amount that is: (A) 5 percent of the balance of the financing outstanding at the time of disbursement of the loan for a loan up to (and including) $350,000; and. Subsection (j) contains forgiveness provisions specific to Second Draw PPP loans. 801 et seq.) Second Draw PPP Loans are eligible for loan forgiveness on the same terms and conditions as First Draw PPP Loans, except that Second Draw PPP Loan borrowers with a principal amount of $150,000 or less are required to provide documentation of revenue reduction if such documentation was not provided at the time of the loan application as specified in subsections (g)(2)(iv) and (v) of this section. First-time borrowers (including newly eligible borrowers) can once again apply under the first-round program. (1) If a First Draw PPP Loan is under review pursuant to PPP rules and/or information in SBA's possession indicates that the borrower may have been ineligible for the First Draw PPP Loan it received or for the loan amount received by the borrower, the lender will receive notification from SBA when the lender submits an application for guaranty of a Second Draw PPP Loan (unresolved borrower). Second Draw PPP Loans are generally subject to the same terms, conditions and requirements as First Draw PPP Loans. 14. documents in the last year, by the Centers for Medicare & Medicaid Services This prototype edition of the SBA will post all comments on www.regulations.gov. Chapter 35, https://www.federalregister.gov/d/2021-00452, MODS: Government Publishing Office metadata, https://www.sba.gov/tools/local-assistance/districtoffices, section 101 of title 5, United States Code, https://www.sba.gov/sites/default/files/2020-12/Final%20PPP%20FAQs%20%28December%209%202020%29-508.pdf. The PPP provided more than 11.7 million forgivable loans totaling nearly $800 billion to small businesses and other eligible entities hurt by the economic impacts of the COVID-19 pandemic. Except for small government jurisdictions with a population of less than 50,000, neither State nor local governments are small entities.. (2) At the time an applicant submits its loan application form, it must submit the following unless the documentation was submitted to the lender for the First Draw PPP Loan (i.e., the applicant used calendar year 2019 figures to determine both its First Draw PPP Loan amount and its Second Draw PPP Loan amount, and the lender for the applicant's Second Draw PPP Loan is the same as the lender that made the applicant's First Draw PPP Loan): (i) If the applicant is not self-employed, the applicant's 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), as applicable, or equivalent payroll processor records, along with evidence of any retirement and employee group health, life, disability, vision and dental insurance contributions, must be provided. 681); and (4)(a) any business concern (including any station which broadcasts pursuant to a license granted by the Federal Communications Commission under title III of the Communications Act of 1934 (47 U.S.C. (iii) No personal guarantees will be required. (1) In general, the maximum loan amount for a Second Draw PPP Loan is equal to the lesser of two and half months of the borrower's average monthly payroll costs or $2 million, except as otherwise specified in this subsection (e). The RFA defines a small entity as (1) a proprietary firm meeting the size standards of the Small Business Administration (SBA); (2) a nonprofit organization that is not dominant in its field; or (3) a small government Start Printed Page 3723jurisdiction with a population of less than 50,000. Businesses are eligible for a Second Draw loan if: They previously received a First Draw PPP loan. Accordingly, a single business entity that is assigned a NAICS code beginning with 72 is eligible to receive a Second Draw PPP Loan if it employs no more than 300 employees per physical location and meets the revenue reduction requirements and otherwise satisfies the eligibility criteria described in this IFR. (2)(i) Gross receipts includes all revenue in whatever form received or accrued (in accordance with the entity's accounting method) from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances. Procedures for Addressing Unresolved Issues on Borrower First Draw PPP Loans CONTROL NO. All other items, such as subcontractor costs, reimbursements for purchases a contractor makes at a customer's request, investment income, and employee-based costs such as payroll taxes, may not be excluded from gross receipts. ), and inserted so as to appear after section 7 of the Small Business Act (15 U.S.C. (f) What is the maximum loan amount for a Second Draw PPP Loan? 1503 & 1507. No collateral will be required. (c) Who is eligible for a Second Draw PPP Loan? The average loan size is $87,000. Pursuant to section 808(2) of the CRA, SBA finds, for good cause, that a 60-day delay in the effective date is unnecessary and contrary to the public interest. Subsection (c)(2) also adapts the methodology for calculating affiliate receipts from 13 CFR 121.104. If you do go back into your application and make. (E) Follow applicable BSA requirements (listed in subsection (C)(3)(d) of the Consolidated First Draw PPP IFR); and. documents in the last year, 438 that: (i) Previously received a First Draw PPP loan in accordance with the eligibility criteria in the Consolidated First Draw PPP IFR; (ii) has used, or will use, the full amount of its First Draw PPP Loan (including the amount of any increase on such First Draw PPP Loan) on authorized uses under subsection (B)(11) of the Consolidated First Draw PPP IFR on or before the expected date on which the Second Draw PPP Loan will be disbursed;[34], (iii) employs not more than 300 employees, unless it satisfies the alternative criteria for businesses with a North American Industry Classification System (NAICS) code beginning with 72 and eligible news organizations with more than one physical location described in subsection (c)(3) or (c)(4) of this section; and. 7. (ii) that retains, as a member of the board of directors of the business concern, a person who is a resident of the People's Republic of China; (4) any person required to submit a registration statement under section 2 of the Foreign Agents Registration Act of 1938 (22 U.S.C. This repetition of headings to form internal navigation links (9) an entity that has permanently closed. 9. 301 et seq. For a loan of $150,000 or less where the borrower does not provide documentation of revenue reduction with its application, the lender shall perform this review when the borrower provides such documentation. 04/17/2023, 35 [20] Moreover, this approach is appropriate because, if annual filings show a 25 percent revenue reduction, then at least one quarter in 2020 would have had at least a 25 percent revenue reduction. (v) For the purpose of determining whether a person has a controlling interest in the entity, the securities owned, controlled, or held by the President, the Vice President, the head of an Executive department, or a Member of Congress, shall be aggregated with the securities held by his or her spouse as determined under applicable common law; (7) any issuer, the securities of which are listed on an exchange registered as a national securities exchange under section 6 of the Securities Exchange Act of 1934 (15 U.S.C. Highlight the information that you consider to be CBI and explain why you believe SBA should hold this information as confidential. Information about this document as published in the Federal Register. Certain 2020 first draw PPP loans were flagged with hold codes after SBA review. The bill, signed into law on Dec. 27, includes a total of $284.5 billion for PPP loans. Choose Get Payroll Updates. This rule's designation under Executive Order 13771 will be informed by public comment. Summary of Key Terms of PPP Second Draw Loans, 3. Business Concerns With More Than One Physical Location, E. Second Draw PPP Loan Application and Documentation Requirements, G. Loans to Borrowers With Unresolved First Draw PPP Loans, IV. The $284 billion includes funding for businesses that already received a PPP loan under the Coronavirus Aid, Relief and Economic Security (CARES) Act (referred to as "second draw loans") and . 78c(a)) (except SBA will not consider whether a news organization that is eligible under subsection (c)(4) is affiliated with an entity, which includes any entity that owns or controls such news organization, that is an issuer); (8) an entity that has previously received a Second Draw PPP Loan; or.

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