Updates Regarding Stimulus Relief Bill Information

Updates for the $900 billion coronavirus relief and stimulus package. The new Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act clarifies questions about the loan process, rules about applying for new loans, and seeking forgiveness for old ones.  - See highlights below -

- Stay tuned for updated information as it becomes available. -

February 24, 2021 - Enhancements to PPP Lending Program

The Biden-Harris Administration and the U.S. Small Business Administration are taking steps with the Paycheck Protection Program to further promote equitable relief for America’s mom-and-pop businesses. Borrowers can apply for the Paycheck Protection Program by downloading the First Draw PPP loan application or Second Draw PPP loan application and working with a participating PPP lender through the SBA Lender Match tool

View Press Release            View Fact Sheet 

The SBA will:

  • Immediately implement a 14-day, exclusive PPP loan application period for businesses and nonprofits with fewer than 20 employees
  • Allow sole proprietors, independent contractors, and self-employed individuals to receive more financial support by revising the PPP’s funding formula for these categories of applicants
  • Eliminate an exclusionary restriction on PPP access for small business owners with prior non-fraud felony convictions, consistent with a bipartisan congressional proposal
  • Eliminate PPP access restrictions on small business owners who have struggled to make federal student loan payments by eliminating federal student loan debt delinquency and default as disqualifiers to participating in the PPP; and
  • Ensure access for non-citizen small business owners who are lawful U.S. residents by clarifying that they may use Individual Taxpayer Identification Number (ITIN) to apply for the PPP.
  • Addressing waste, fraud, and abuse across all federal programs. Unlike the previous round of the PPP, loan guaranty approval is now contingent on passing SBA fraud checks, Treasury's Do Not Pay database and public records.
  • Promoting transparency and accountability by improving the PPP loan application.
  • Improving the Emergency Relief Digital Front Door.
  • Continuing to conduct extensive stakeholder outreach to learn more about challenges and opportunities in the implementation of current emergency relief programs.
  • Enhancing the current lender engagement model. 

Download PDFJanuary 19, 2021 - Summary of COVID-19 Relief Options  PPP & EIDL Loans for Small Businesses

This document contains high-level summaries of the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan EIDL program as of the date of the document. For more up-to-date or complete information, you can find it at: Coronavirus (COVID-19): Small Business Guidance & Loan Resources (sba.gov)

1st Draw Loans

SBA has reopened the Paycheck Protection Program (PPP) for First Draw Loans. This loan can be used to help fund payroll costs, 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.

1st Draw PPP

To qualify for a “first draw” loan, eligible businesses must have:

  • Been in business on February 15, 2020.
  • Have 500 or fewer employees that are eligible for other SBA 7(a) loans.
  • Sole proprietors, independent contractors, and eligible self-employed individuals.
  • Not-for-profits, including churches.
  • Accommodation and food services operations with North American Industry Classification System codes starting with 72, with fewer than 500 employees per physical location.
  • Sec. 501(c)(6) business leagues, such as chambers of commerce, visitors’ bureaus, etc., and “destination marketing organizations” that have 300 or fewer employees and do not receive more than 15% of receipts from lobbying.

Borrowers can apply for a First Draw PPP Loan until March 31, 2021, through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, eligible non-bank lender, or Farm Credit System institution that is participating in PPP.

The maximum loan amount for all borrowers is 2.5x average monthly payroll costs (capped at $100,000 per person) in 2019, 2020 or the year prior to the loan - up to $10 million.

Second Draw Loans

The PPP now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan terms as their First Draw PPP Loan. 

2nd Draw PPP

To qualify for a “second draw” loan, eligible businesses must have:

  • Previously received a First Draw PPP Loan and will or has used the full amount only for  authorized uses
  • Has no more than 300 employees
  • Demonstrates at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. 

Borrowers can apply for a First Draw PPP Loan until March 31, 2021, through any existing SBA  7(a) lender or through any federally insured depository institution, federally insured credit union, eligible non-bank lender, or Farm Credit System institution that is participating in PPP.

The maximum loan amount for all borrowers is 3.5x average monthly payroll costs (capped at $100,000 per person) in 2019, 2020 or the year prior to the loan - up to $2 million.

Targeted EIDL Advance

*Advance funds have been fully allocated and are not currently available, once the SBA has issued guidance and instruction this page will be updated

The Targeted EIDL Advance provides businesses located in low-income communities with additional funds to ensure small business continuity, adaptation, and resiliency. Advance funds of up to $10,000 will be available to applicants located in low-income communities who previously received an EIDL Advance for less than $10,000, or those who applied but received no funds due to lack of available program funding.
Applicants do not need to take any action at this time. SBA will first reach out to EIDL applicants that already received a partial EIDL Advance (i.e. between $1,000 - $9,000). Applicants will be contacted directly by SBA via email in the coming weeks with instructions to determine eligibility and submit documentation.

Applicants may qualify if they:

  • Are located in a low-income community
  • Can demonstrate more than 30% reduction in revenue during an 8-week period beginning on March 2, 2020, or later.

Next, SBA will reach out to those who applied for EIDL assistance on or before December 27, 2020, but did not receive an EIDL Advance due to lack of program funding. These applicants will receive an email from SBA with instructions to determine eligibility and submit documentation. Applicants may qualify for a Targeted EIDL Advance if they meet the above criteria (low-income location and reduction in revenue) AND:

  • Have 300 or fewer employees. Business entities normally eligible for the EIDL program are eligible, including sole proprietors, independent contractors, and private, nonprofit organizations. Agricultural enterprises are not eligible.

Economic Injury Disaster Loan (EIDL) Changes

Small business owners and qualified agricultural businesses are currently eligible to apply for a low-interest EIDL loan, with a maximum amount of $150,000. This includes businesses engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries. This loan can be used to help fund working capital & normal operating expenses, such as: continuation of health care benefits, rent, utilities, and fixed debt payments.

EIDL Updates

Terms:

  • Maturity – 30 years
  • 3.75% for businesses (fixed)
  • 2.75% for nonprofits (fixed)
  • No prepayment penalty or fees

Collateral Requirements:

  • Required for loans over $25,000. 
  • SBA uses a general security agreement (UCC) designating business assets as collateral, e.g., machinery and equipment, furniture and fixtures, etc.

Forgivable:

  • NO – EIDL Loan
  • YES – EIDL Advance*
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Pandemic Unemployment Assistance, or PUA

The original Pandemic Unemployment Assistance - put in place by the CARES Act in the spring - expired July 2020 and provided $600/week in additional benefits. The updated plan provides $300/week in additional benefits. More details will be forthcoming.

Extension of the Debt Relief Program (Section 325 of full text)

Resumes the payments of principal and interest on SBA 7(a), 504, or microloans, as established in the CARES Act. This extension offers three additional months of payments on existing SBA loans starting in February 2021. The program will also offer six months of payments for new loans closed between February 1, 2021 - September 30, 2021.

Grants for Venues and Accommodations

Referred to as the Shuttered Venue Operator Grants, these will be offered for live venues, theaters, and museums that have lost at least 25% of revenue. The money received from these grants will be for specified expenses, such as payroll, rent, utilities, and PPE. The hardest-hit (90% revenue losses) will be eligible for the first 14 days of the program, followed by those with 70% revenue loss in the next 14 days, followed by all other eligible entities.