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Below are 10 important things to know about the Paycheck Protection Program (“PPP”) Loan Forgiveness Applications and the detailed instructions for the revised and updated applications. ....
Forgiveness Reductions Based on Salary or Wages Documents 1. COVERED PERIOD: The covered period is the period beginning on the date the lender disburses the PPP loan and ending on the date selected by the borrower that occurs during the period (i) beginning on the date that is 8 weeks after the date of disbursement, and (ii) ending on the date that is 24 weeks after the date of disbursement (the “Covered Period”). Please note that the option to elect an alternative covered period was removed because the Economic Aid Act provided borrowers flexibility to choose the end of their Covered Period. The Covered Periods for a First Draw PPP Loan and a Second Draw PPP Loan cannot overlap; the borrower must use all proceeds for the First Draw PPP Loan for eligible expenses before disbursement of the Second Draw PPP Loan. ....
Five-year maturity All guidance issued in connection with First Draw Loans applies to Second Draw Loans, except as specified in the new guidance applicable to Second Draw Loans. SBA Guaranty As with First Draw Loans, Second Draw Loans are subject to an SBA guaranty of 100% of Second Draw Loans. As a result, a lender who makes Second Draw Loan will not bear the financial risk of non-payment, as long as the lender complies with its obligations under the program. Eligibility Eligibility for Second Draw Loans is much more limited than for First Draw Loans. To be eligible an applicant must be a business concern, nonprofit organization, housing cooperative, veterans organization, tribal business concern, eligible self-employed individual, sole proprietor, independent contractor, or small agricultural cooperative that (i) employs not more than 300 employees, (ii) experienced a 25% or greater reduction in gross receipts for at least one quarter in 2020 as compared to t ....
Forgiveness Applications and the detailed instructions for the revised and updated applications posted on January 19, 2021, as well as other forgiveness procedures as updated by the. ....
PPP”) loans under the Coronavirus, Aid, Relief, and Economic Security CAA (the “ CARES Act”): Borrowers may be eligible for a second PPP loan. If the borrower (1) will or has used the full amount of the first PPP loan only for authorized expenses, (2) has no more than 300 employees, and (3) can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020, a second PPP loan is available. Any second PPP loan is limited to $2 milion. More Entities Qualify for PPP Loans. The CAA expands PPP loan eligible entities to include: 501(c)(6) Non-Profit Organizations: An IRC §501(c)(6) entity is eligible for a PPP loan subject to the following: (1) the entity does not receive more than 15% of its receipts from lobbying activities, (2) the lobbing activities of the entity do not comprise more than 15% of the total activities of the entity, (3) the cost of lobbying activities of the entity did not exceed $1 million during the most r ....