On December 27th, 2020, the CRRSA Act appropriated an additional $284 billion in funding to restart a second round of Paycheck Protection Program (PPP) loans, and includes provisions allowing the hardest-hit small businesses to apply for a second forgivable PPP loan based on eligibility.

1.15.2021 update:
German American Bank will be accepting PPP loan applications for first-time borrowers and second draw loans on Tuesday, January 19th. Contact a local German American Bank lender. 

According to the rules of the program set forth by the U.S. Government:

• Businesses with 500 or fewer employees that have not previously received a PPP loan may apply for a PPP loan to help with payroll, rent, utilities, healthcare costs and more.
• Businesses that have already received a PPP loan may apply for a “second draw” PPP loan if they have used all of their first loan (or will have by the time of disbursement of the second loan), have no more than 300 employees and can demonstrate a year-over-year quarterly revenue reduction of at least 25%.

If you are applying for your first PPP loan:

• Borrowers can choose their Covered Period anywhere between eight and 24 weeks
• Types of eligible businesses have been expanded
• Allowable expenses have been expanded
• The maximum loan amount is $10 million
• Read the SBA guidance on calculating the maximum loan amount for first draw PPP loans and what documentation is needed for different types of businesses. 
• Additional terms for First Draw PPP Loans

If you are applying for a Second Draw PPP loan:

• Existing PPP loan borrowers may be eligible to apply for a “second draw” second PPP loan
• Borrowers must have
  • Fewer than 300 employees (subject to certain conditions)
  • At least a 25% decrease in revenue in any quarter in 2020 relative to same quarter in 2019
  • Used or will use the full amount of the first PPP loan
• Borrowers can choose their Covered Period anywhere between eight and 24 weeks
• Allowable expenses have been expanded
• The maximum loan amount is $2 million
• Additional terms for Second Draw PPP Loans

Additional Details:

PPP Loan Rates and Terms

• All PPP loans have a fixed interest rate of 1%. The new bill has clarified that the interest rate is non-compounding and non-adjustable for first- and second-draw loans.
• The maturity of a PPP loan is five years.
• The deferral period lasts until the loan forgiveness amount is determined.
• Borrowers who fail to apply for loan forgiveness must start making loan payments within ten months of the last day of the Covered Period.
• Borrowers may still receive loans up to 2.5 times the amount of average monthly payroll costs.
• Entities in industries assigned to NAICS code 72 (Accommodations and Food Services) may receive loans up to 3.5 times the amount of average monthly payroll costs.

Eligibility

• Businesses that were in operation on February 15, 2020 will be eligible for an initial PPP loan or a second draw loan.
• Sole proprietors
• Independent contractors
• Self-employed individuals
• Certain non-profits (the new bill has expanded eligible businesses to include certain 501(c)(6) non-profit organizations)
• Seasonal employers; the new bill has clarified the definition of these to be businesses that operate no more than seven months within a year or earn no more than a third of gross receipts within a six-month period
• Faith-based organizations that have less than 150 employees
• Housing cooperatives that employ less than 300 people

Economic Injury Disaster Loan (EIDL) Advance Program

The CRRSA Act provides $20 billion to restart and extend the SBA’s Economic Injury Disaster Loan (EIDL) Advance Grant for small businesses in low-income communities.

For more information regarding the SBA’s Economic Injury Disaster Loans visit the SBA EIDL Webpage.

Other SBA Loan Programs

The CRRSA Act supplies $2 billion to enhance the SBA’s existing government guarantee loan programs, including the 7(a) Loan Program, the 504 Loan Program and the Microloan Program.

For more information regarding the SBA’s other loan programs visit the SBA Loan Webpage.