The Small Business Administration (“SBA”) is reopening the Paycheck Protection Program (“PPP”) for first and second draw loan applicants the week of January 11, 2021.[1] Applicants have until March 31, 2021 to apply through any participating SBA lender.

You may use the applications linked below to begin gathering necessary information that participating lenders will need:

• PPP First Draw Application
• PPP Second Draw Application

Eligible Payroll and Nonpayroll Costs

Both first and second draw PPP loans can be used to help with payroll costs, including benefits, as well as to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

Full Forgiveness Terms

Both first and second draw loans may be fully forgiven, if during the covered period,[2] the borrower:

• Maintains employee and compensation levels;
• Spends the loan proceeds on payroll costs and other eligible expenses (as noted above); and
• Spends at least 60 percent of the proceeds on payroll costs.

First Draw Applicants

• Must have 500 or fewer employees[3] (including affiliates, if applicable).
• Existing PPP borrowers that did not receive loan forgiveness by December 27, 2020 may: (1) reapply for a first draw loan if they previously returned some or all of their first draw funds, or (2) under certain circumstances, request to modify their first draw amount if they previously did not accept the full amount for which they are eligible.

Second Draw Applicants

• Must have 300 or fewer employees.
• Must have used or will use the full amount of the first draw PPP loan for authorized uses.
• Must be able to demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

Borrowers with 10 or Fewer Employees or in Low- or Moderate-Income Neighborhoods

For borrowers with 10 or fewer employees, or for loans of $250,000 or less to eligible borrowers in low-or-moderate-income neighborhoods, the SBA has set aside at least $15 billion for first draw loans, and at least $25 billion for second draw loans.

[1] To promote access for smaller lenders and their customers, the SBA will initially only accept loan applications from community financial institutions starting on January 11, 2021 for first draw applicants, and January 13, 2021 for second draw applicants. The PPP, however, will be open to all participating lenders shortly thereafter.

[2] At the election of the borrower, the covered period is either (1) a 24-week or (2) an 8-week period beginning on the PPP loan disbursement date.

[3] Certain entities with more than 500 employees in certain industries that meet the SBA’s alternative size standard may also apply. See the SBA’s overview for first draw applicants here.