If the lender identifies errors in the borrower's calculation or material lack of substantiation in the borrower's supporting documents, the lender should work with the borrower to remedy the issue. . (2) 2.5 (or, only for a borrower assigned a NAICS code beginning with 72 as defined in subsection (f)(10) at the time of disbursement, 3.5). For complete information about, and access to, our official publications [30] Edited by Akintoye & Beck 978 14051 7791 7 Strategic Issues in Public-Private Partnerships, 2nd Edition Dewulf, Blanken & Bult-Spiering 978 0 470 65635 8 THE NONPROFIT RISK BOOK - Jesse . However, no additional documentation to substantiate payroll costs will be required if the applicant (i) used calendar year 2019 figures to determine its First Draw PPP Loan amount, (ii) used calendar year 2019 figures to determine its Second Draw PPP Loan amount (instead of calendar year 2020), and (iii) 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. The Act also provided tailored methodologies for certain categories of borrowers. As with First Draw PPP Loans, in most cases, a borrower is considered together with its affiliates to determine eligibility for the PPP. In addition, as discussed below, under the Consolidated First Draw PPP IFR, SBA's affiliation rules (13 CFR 121.301) do not apply to any business entity that is assigned a NAICS code beginning with 72 and that employs not more than a total of 500 employees. Call Center Representative at 833-572-0502, or the local SBA Field Office; the list of offices can be found at https://www.sba.gov/tools/local-assistance/districtoffices. Subsection (b) also confirms that SBA's Consolidated First Draw PPP IFR, Frequently Asked Questions (FAQs), and other guidance about PPP loans under section 7(a)(36) of the Small Business Act (15 U.S.C. documents in the last year, 1489 In addition, the Economic Aid Act provides that a Second Draw PPP Loan may only be made to an eligible borrower that (i) has received a First Draw PPP Loan, and (ii) has used, or will use, the full amount of the First Draw PPP Loan on or before the expected date on which the Second Draw PPP Loan is disbursed to the borrower. (7) The maximum amount of a Second Draw PPP Loan to a borrower that has income from self-employment and files a Form 1040, Schedule C, is calculated as follows, depending on whether the borrower has employees: (i) For a borrower that has income from self-employment and does not have any employees, the maximum loan amount is the lesser of: (1) The net profit of the borrower in 2019 or 2020, as reported on IRS Form 1040 Schedule C, that is not more than $100,000, divided by 12; and. These include but are not limited to: The SBA guaranteeing 100%. for guidance on these standards for business concerns with more than one physical location, except that, for Second Draw PPP Loans, the number of employees per physical location is limited to 300 rather than 500. Second draw PPP loans are intentionally narrower and smaller in terms of eligibility and amount. An entity that is ineligible to receive a First Draw PPP Loan under the CARES Act or Consolidated First Draw PPP IFR is also ineligible for a Second Draw PPP Loan. The deadline of May 31, 2021 is the same for both applications. [11] Such analysis must address the consideration of regulatory options that would lessen the economic effect of the rule on small entities. on Like First Draw PPP Loans, Second Draw PPP Loans are intended to provide expeditious relief to America's small Start Printed Page 3713businesses. Different eligibility requirements apply to Second Draw PPP Loans. 31. documents in the last year, 82 (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). SBA will resolve the issue related to the unresolved borrower expeditiously and will notify the lender of the process to obtain an SBA loan number for the Second Draw PPP Loan, if appropriate. (d) How do SBA's affiliation rules affect an applicant's eligibility for a Second Draw PPP Loan? 631 et seq. 25. Second Draw PPP Loans are subject to SBA's and the Department of the Treasury's (Treasury's) consolidated interim final rules implementing updates to the Paycheck Protection Program for First Draw PPP Loans (Consolidated First Draw PPP IFR) issued concurrently with this interim final rule (IFR)[1] Subsection (e)(1) ensures that a borrower that received a First Draw PPP Loan despite being ineligible to receive the loan is not eligible to receive a Second Draw PPP Loan. This information collection (IC) consists of SBA Form 2483-SD (Paycheck Protection Program Second Draw Application Form) and SBA Form 2484-SD (Paycheck Protection Program Lender's ApplicationSecond Draw Loan Guaranty. Given the short duration of this program, and the urgent need to issue loans quickly, the Administrator in consultation with the Secretary has determined that it is impractical and not in the public interest to provide a 30-day delayed effective date. better and aid in comparing the online edition to the print edition. 30. These comments must be submitted on or before February 16, 2021. (Blue numbers next to the lines in the ' H NMR spectra indicate the integration values.) Second Draw PPP Loans are generally subject to the same terms, conditions and requirements as First Draw PPP Loans, including but not limited to: 100 percent guaranteed by the SBA no collateral no personal guarantees 1 percent interest rate (calculated on a noncompounding, nonadjustable basis). Select Download Latest Update. rendition of the daily Federal Register on FederalRegister.gov does not However, the CARES Act waived the affiliation rules for certain categories of borrowers. (A) Confirm receipt of borrower certifications contained in Paycheck Protection Program Second Draw Borrower Application Form (SBA Form 2483-SD) or lender's equivalent; (B) Confirm receipt of information demonstrating that a borrower was either an eligible self-employed individual, independent contractor, or sole proprietorship with no employees or had employees for whom the borrower paid salaries and payroll taxes on or around February 15, 2020; (C) Confirm the dollar amount of average monthly payroll costs for 2019 or 2020 (whichever was used to calculate loan amount) by reviewing the payroll documentation submitted with the borrower's application; (D) For a Second Draw PPP Loan greater than $150,000 or a loan of $150,000 or less where the borrower provides documentation of revenue reduction, confirm the dollar amount and percentage of the borrower's revenue reduction by performing a good faith review, in a reasonable time, of the borrower's calculations and supporting documents concerning the borrower's revenue reduction. This feature is not available for this document. For an eligible nonprofit organization, a veterans organization, an eligible nonprofit news organization, eligible 501(c) organization, or eligible destination marketing organization, gross receipts has the meaning in section 6033 of the Internal Revenue Code of 1986. Rules that are exempt from notice and comment are also exempt from the RFA requirements, including conducting a regulatory flexibility analysis, when among other things the agency for good cause finds that notice and public procedure are impracticable, unnecessary, or contrary to the public interest. 4. documents in the last year, by the International Trade Commission In addition, the SBA has addressed some issues in their guidance. (iii) No personal guarantees will be required. Only official editions of the (5) The maximum amount of a Second Draw PPP Loan made to a borrower assigned a NAICS code beginning with 72 at the time of disbursement as defined in subsection (f)(10) (that is not a seasonal employer or new entity addressed in subsection (f)(3) or (f)(4) or a borrower with self-employment income or a partnership addressed in subsection (f)(7) or (f)(8) of this section) is calculated as the lesser of: (A) The average total monthly payment for payroll costs incurred or paid by the borrower during either 2019 or 2020 (at the borrower's election) by, (6) (i) The maximum amount of a Second Draw PPP Loan to a farmer or rancher that:Start Printed Page 3720. This interim final rule is being issued without advance notice and public comment because section 303 of the Economic Aid Act authorizes SBA to issue regulations to implement the Economic Aid Act without regard to notice requirements. (B) An applicant that was in operation in all four quarters of 2019 is deemed to have experienced the revenue reduction in subsection (c)(1)(iv)(A)(1) if it experienced a reduction in annual receipts of 25 percent or greater in 2020 compared to 2019 and the borrower submits copies of its annual tax forms substantiating the revenue decline. [9] The amount of a PPP loan is approximately equal to 2.5 times the applicant's average monthly payroll costs. maturity of five years A payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish the applicant was in operation on February 15, 2020. documents in the last year, 124 1H NMR 1H 2H JI 2H 2H 2HII 3H 10 6 8 (ppm) 4 2 O 13C NMR 220 200 180 160 140 120 100 80 60 40 20 0 8 (ppm) Deduce the structure from the spectra. 04/17/2023, 209 (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). has no substantive legal effect. 33. documents in the last year, by the Federal Aviation Administration 804(2)). This exclusion of gross receipts of such former affiliate applies during the entire period of measurement, rather than only for the period after which affiliation ceased. The average loan size is $87,000. 2. This FAQ applies only to First Draw PPP Loans. For borrowers assigned a NAICS code beginning with 72 at the time of disbursement, the Economic Aid Act provides that the maximum loan amount is equal to three-and-a-half (3.5) months of payroll costs rather than two-and-a-half (2.5) months. 34. Subsection (B)(11) of the Consolidated First Draw PPP IFR specifies that the proceeds of a PPP loan may be spent only on certain eligible expenses. Draw the structure of the compound identified by the simulated - H NMR and IC NMR spectra. documents in the last year. The President of the United States manages the operations of the Executive branch of Government through Executive orders. [16] This site displays a prototype of a Web 2.0 version of the daily Each document posted on the site includes a link to the Subject to subsection (e) of this section, below, the following applicants are eligible for Second Draw PPP Loans: (1) An applicant is eligible for a Second Draw PPP Loan if it is a business concern, independent contractor, eligible self-employed individual, sole proprietor, nonprofit organization eligible for a First Draw PPP Loan, veterans organization, Tribal business concern, housing cooperative, small agricultural cooperative, eligible 501(c)(6) organization or destination marketing organization, or an eligible nonprofit news organization[33] At Womply, a. The rules applicable to Second Draw PPP Loans are published in section IV of this IFR. These credits are available to employers (except state and local governments and their instrumentalities and small business who . (vi) All loans will be processed by all lenders under delegated authority and lenders will be permitted to rely on certifications of the borrower in order to determine eligibility of the borrower and the use of loan proceeds. Subsection (c)(1)(iv)(A) of the IFR reflects this methodology. Subsection (c)(1)(iv)(B) of the IFR provides that a borrower that was in operation in all four quarters of 2019 is deemed to have experienced the required revenue reduction if it Start Printed Page 3714experienced a reduction in annual receipts of 25 percent or greater in 2020 compared to 2019 and the borrower submits copies of its annual tax forms substantiating the revenue decline. The Public Inspection page may also [7] Choose Get Payroll Updates. (9) an entity that has permanently closed. 35. January 14, 2021) and PPP Second Draw Loans (86 FR 3712, January 14, 2021). of the consolidated interim final rule implementing . These calculations are reflected in subsection (f) of this IFR. Paragraph 7(a)(36)(D)(iv) of the Small Business Act. SBA guarantees 100 percent of Second Draw PPP Loans and SBA may forgive up to the full principal loan amount. This table of contents is a navigational tool, processed from the Key insights. Under section 7(a)(37) of the Small Business Act (15 U.S.C. (2) Except as otherwise provided in subsection (f)(3) through (f)(7), the maximum amount of a Second Draw PPP Loan is calculated as the lesser of: (A) The average total monthly payment for payroll costs incurred or paid by the borrower during 2019 or 2020 (at the election of the borrower); by. Subsections (c)(3) and (c)(4) of the IFR implement these statutory provisions. (iii) If the applicant is self-employed and does not have employees, the applicant must provide (a) its 2019 or 2020 (whichever was used to calculate loan amount) Form 1040 Schedule C, (b) a 2019 or 2020 (whichever was used to calculate loan amount) IRS Form 1099-MISC detailing nonemployee compensation received (box 7), invoice, bank statement, or book of record that establishes that the applicant is self-employed; and (c) a 2020 invoice, bank statement, or book of record to establish that the applicant was in operation on or around February 15, 2020. The Economic Aid Act does not include a general definition of gross receipts for purposes of determining a borrower's revenue reduction. Since this rule is exempt from notice and comment, SBA is not required to conduct a regulatory flexibility analysis. The Economic Aid Act provides that, to be eligible for a Second Draw PPP Loan, the borrower must have experienced a revenue reduction of 25% or greater in 2020 relative to 2019. We anticipate that this rule will result in substantial benefits to small businesses, their employees, and the communities they serve. The SBA will accept applications until March 31 or until funds run out, an outcome that is not expected at this time. The President of the United States communicates information on holidays, commemorations, special observances, trade, and policy through Proclamations. Second draw PPP loans now available If your business received a PPP loan in 2020 and have already exhausted that funding, you may be able to apply for second PPP loan if: Your business has fewer than 300 employees You have exhausted all funds obtained from a previous PPP loan. [12] These applications can be for a completely "new" first draw loan or to "right size" (discussed below) their original loan. Borrowers that need assistance or have questions should call (877) 552-2692, Monday - Friday, 8 a.m. - 8 p.m. EST. implementing updates to the PPP. (The revenue reduction requirement is addressed in subsection (c)(1)(iv) of this IFR.) 38. Paragraph 7(a)(37)(K) of the Small Business Act, added by the Economic Aid Act, states that a lender approved to make First Draw PPP loans may make Second Draw PPP Loans under the same terms and conditions as new First Draw PPP Loans. These markup elements allow the user to see how the document follows the documents in the last year, by the Environmental Protection Agency A borrower's average monthly payroll costs may be based on calendar year 2020, calendar year 2019,[36] The maximum for "second draw" PPP loans is $2 million, less than the $10 million cap for PPP's first round. (2) What do lenders have to do in terms of loan underwriting? These include, but are not limited to the following terms: The guarantee percentage is 100 percent. Principally, the Economic Aid Act authorizes further PPP funding and allows prior PPP borrowers to pursue second draw PPP loans. 636(a)(37)), SBA is authorized to guarantee Paycheck Protection Program Second Draw Loans (Second Draw PPP Loans). 636(a)(36)) apply to Second Draw PPP Loans, except as specified in this IFR.[3]. Paragraph 7(a)(37)(D) of the Small Business Act. Section 317 of the Economic Aid Act modified this provision for Second Draw PPP Loans by reducing the limit on employees per physical location to 300. 20. must make the certifications listed in subsection (B)(12) of the Consolidated First Draw PPP IFR, except: (i) Instead of the certification in subsection (B)(12)(v) of the Consolidated First Draw PPP IFR, the applicant must certify that the applicant has not and will not receive another Second Draw Paycheck Protection Program Loan; and. documents in the last year, 655 (D) All terms in this subsection shall have the meaning attributed to them by the IRS. For those careful and cautious borrowers grappling with the meaning of the necessity certification in the context of PPP2 loans, this guidance provides welcomed clarity. While every effort has been made to ensure that (30) days from the date of the first disbursement of a First Draw PPP Loan or Second Draw PPP Loan . 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. For loans with a principal amount greater than $150,000, the applicant must also submit documentation adequate to establish that the applicant experienced a revenue reduction of 25% or greater in 2020 relative to 2019. 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. documents in the last year, 29 Federal Register issue. 14. From Jan. 11 through Jan. 24, SBA approved more than 400,000 loans for $35 billion, according to an agency report. Comments and Immediate Effective Date, III. It appears to limit second draw loans to businesses that have no more than 300 employees. (E) The Applicant is not a business concern or entity primarily engaged in political or lobbying activities, including any entity that is organized for research or for engaging in advocacy in areas such as public policy or political strategy or otherwise describes itself as a think tank in any public documents. Paragraph 7(a)(37)(C)(iv) of the Small Business Act. This clarification ensures the effectiveness of the second draw loan program by ensuring that a borrower is not disqualified from receiving a Second Draw PPP Loan because it received forgiveness on a First Draw PPP Loan. Paragraph 7(a)(36)(D)(iv) of the Small Business Act (15 U.S.C. If the lender identifies errors in the borrower's calculation or a material lack of substantiation in the borrower's supporting documents, the lender should work with the borrower to remedy the issue. (iv) (A) experienced a reduction in revenue in calendar year 2020, measured as follows: (1) the applicant had gross receipts during the first, second, third, or fourth quarter in 2020 that demonstrate at least a 25 percent reduction from the applicant's gross receipts during the same quarter in 2019 (for example, an applicant that had gross receipts of $50,000 in the second quarter of 2019 and had gross receipts of $30,000 in the second quarter of 2020 experienced a 40 percent revenue reduction between these two quarters); (2) if the applicant was not in business during the first or second quarter of 2019, but was in business during the third and fourth quarters of 2019, the applicant had gross receipts during the first, second, third, or fourth quarter of 2020 that demonstrate at least a 25 percent reduction from the applicant's gross receipts during the third or fourth quarter of 2019 (for example, an applicant that had gross receipts of $50,000 in the third quarter of 2019 and had gross receipts of $30,000 in the third quarter of 2020-demonstrating a reduction of 40 percent from the applicant's gross receipts during the third quarter in 2019); (3) if the applicant was not in business during the first, second, or third quarter of 2019, but was in business during the fourth quarter of 2019, the applicant had gross receipts Start Printed Page 3718during the first, second, third, or fourth quarter of 2020 that demonstrate at least a 25 percent reduction from the fourth quarter of 2019 (for example, an applicant that had gross receipts of $50,000 in the fourth quarter of 2019 and had gross receipts of $30,000 in the fourth quarter of 2020-demonstrating a reduction of 40 percent from the applicant's gross receipts during the fourth quarter in 2019); or. the current document as it appeared on Public Inspection on 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. documents in the last year, 825 Per the SBA's Jan. 14, 2021, Interim Final Ruling (IFR) Protection Program (PPP) Second Draw Loans, if a first draw PPP loan has an unresolved issue, which may be due to hold codes or compliance . Excluding the forgiveness amount from a borrower's gross receipts is consistent with section 7A(i) of the Small Business Act, which expressly excludes PPP forgiveness amounts from being taxed as income. No collateral will be required. Open for Comment, Economic Sanctions & Foreign Assets Control, Tool Chests and Cabinets From China and Vietnam, Experimental Permits for Reusable Suborbital Rockets, Animal and Plant Health Inspection Service, Medicaid and Children's Health Insurance Program, Prohibition on Use by the United States Government of Commercial Spyware That Poses Risks to National Security, II.

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