The amount of a PPP loan is approximately equal to 2.5 times the applicant's average monthly payroll costs. Uses of your new Second Draw PPP Loan: The SBA has expanded the uses for a Second Draw PPP Loan, beyond the simple payment of your monthly "owner profit." However, at least 60% of the new Second Draw PPP Loan must be used to pay your owner profit each month and cannot be more than $8,333/month or $100,000/year. Specifically, the RFA normally requires agencies to describe the impact of a rulemaking on small entities by providing a regulatory impact analysis. Generally, receipts are considered total income (or in the case of a sole proprietorship, independent contractor, or self-employed individual gross income) plus cost of goods sold, and excludes net capital gains or losses as these terms are defined and reported on IRS tax return forms. A partnership must also include its IRS Form 1065 K-1s. The deadline of May 31, 2021 is the same for both applications. The lender may request additional documentation, however, if on further review the lender concludes that it would be useful in conducting the lender's good-faith review of the borrower's loan amount calculation. See section (B)(3)(c) of the Consolidated First Draw PPP IFR. 605(b). to formulate solutions to problems. on on FederalRegister.gov The guidance, however, does not clarify what is intended by "receive a . Key insights. Handbook on Battery Energy Storage System - Asian Development Bank 2018-12-01 . Accordingly, a single business entity that is assigned a NAICS code beginning with 72 is eligible to receive a Second Draw PPP Loan if it employs no more than 300 employees per physical location and meets the revenue reduction requirements and otherwise satisfies the eligibility criteria described in this IFR. No personal guarantees will be required. Global challenges and issues, such as armed conflicts, terrorism, inequality and injustice, migration, religious and cultural . 33. No personal guarantees will be required. These terms and conditions specific to Second Draw PPP Loans are summarized below. ). 5 U.S.C. Almost $400 billion has been forgiven. The requirements applicable to PPP lenders are in sections (C) and (D) of the Consolidated First Draw PPP IFR. Subsection (c)(2) of the IFR defines gross receipts consistent with the definition of receipts in 13 CFR 121.104 of SBA's size regulations because this definition appropriately captures the type of income that is typically included in a small business's gross receipts. No collateral will be required. (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). on NARA's archives.gov. documents in the last year, 28 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. documents in the last year, 82 Congress designated $137 billion for PPP second draw loans as part of a larger funding and relief package. Subsection (d)(2) implements these revised affiliation waivers. documents in the last year, 945 (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. See paragraph 7(a)(37)(A)(iv) of the Small Business Act. Learn more here. (iv) For loans with a principal amount greater than $150,000, documentation sufficient to establish that the applicant experienced a reduction in revenue, as provided in subsection(c)(1)(iv), must be Start Printed Page 3721provided at the time of application, which may include relevant tax forms, including annual tax forms, or, if relevant tax forms are not available, a copy of the applicant's quarterly income statements or bank statements. documents in the last year, by the Centers for Medicare & Medicaid Services The Public Inspection page Applicability Date: This interim final rule applies to loan applications and applications for loan forgiveness submitted for Paycheck Protection Program Second Draw Loans. Summary of Key Terms of PPP Second Draw Loans, 3. Business Concerns With More Than One Physical Location, E. Second Draw PPP Loan Application and Documentation Requirements, G. Loans to Borrowers With Unresolved First Draw PPP Loans, IV. or as otherwise specified in subsections (f)(2) through (f)(9) of this section. The OFR/GPO partnership is committed to presenting accurate and reliable The local SBA Field Office may be found at https://www.sba.gov/tools/local-assistance/districtoffices. SBA will review the information and make the final determination whether it will publish the information. (c) Who is eligible for a Second Draw PPP Loan? 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. Loan forgiveness of Second Draw PPP Loans and the loan review process for Second Draw PPP Loans are generally subject to the interim final rules regarding Loan Forgiveness and SBA Loan Review Procedures and Related Borrower and Lender Responsibilities, as modified to conform to the Economic Aid Act by the Consolidated First Draw PPP IFR, which is being published concurrently with this IFR. Federal Register. in terms of organisations or incentives for innovation (Walker, 1994). and all PPP loan program requirements, except as specified in this IFR. The Economic Aid Act does not include a general definition of gross receipts for purposes of determining a borrower's revenue reduction. 04/17/2023, 149 Paragraph 7(a)(36)(D)(iii)(II) of the Small Business Act. (2) Frequently Asked Questions and other guidance issued by SBA or by SBA in consultation with the Department of the Treasury with respect to PPP loans under section 7(a)(36) of the Small Business Act (15 U.S.C. Accordingly, subsections (c)(1)(i) through (c)(1)(iv) of this IFR implement these criteria. documents in the last year, 1413 2. Subsection (c)(1)(ii) of the IFR clarifies that the full amount of the borrower's First Draw PPP Loan includes the amount of any increase on such First Draw PPP Loan made pursuant to the Economic Aid Act. These markup elements allow the user to see how the document follows the designed to cover the modelling issues that are relevant to facilitate the construction of robust and readily understandable models. In terms of lender compliance, the Economic Aid Act again permits lenders to rely on borrower certifications for initial or second draw PPP loans and in evaluating forgiveness applications. 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. The molecular formula of the compound is C10 H120. Given the number of applicants that got shut out when the program. [29] The loan proceeds may be used to cover payroll costs, rent, interest, and utilities. (4) The maximum amount of a Second Draw PPP Loan to a borrower that did not exist during the 1-year period preceding February 15, 2020, but was in operation on February 15, 2020 (new entity), is calculated as the lesser of: (1) The sum of the total monthly payments by the borrower for payroll costs paid or incurred by the borrower as of the date on which the borrower applies for the Second Draw PPP Loan; by, (2) the number of months in which those payroll costs were paid or incurred; by. If you did not apply for a second draw loan but have hold code (s) on your 2020 first draw application, your lender must resolve the hold code (s) during the forgiveness process. The rule has no preemptive or retroactive effect. Comments and Immediate Effective Date, III. These comments must be submitted on or before February 16, 2021. SBA guarantees 100 percent of Second Draw PPP Loans and SBA may forgive up to the full principal loan amount. 6. Eurostat-OECD PPP Programme, including its organisation, the various surveys . An immediate effective date will give small businesses the maximum amount of time to apply for loans and lenders the maximum amount of time to process applications before the program ends. Subsection (g)(2) of this IFR provides that lenders are subject to the same requirements when making Second Draw PPP Loans as when they are making First Draw PPP Loans. Relative to First Draw PPP loans, the Economic Aid Act adjusted the methodology for calculating a borrower's payroll costs. As discussed elsewhere in this interim final rule, the last day to apply for and receive a PPP loan is March 31, 2021. Eligible employers can claim a tax credit equal to 50% of qualifying wages (defined as wages plus the cost of employer-provided healthcare up to $10,000 per employee) paid between March 13, 2020, and December 31, 2020. Software Development. SBA may provide further guidance, if needed, through SBA notices and a program guide which will be posted on SBA's website at www.sba.gov. (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). 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. [31] All references to subsections refer to section IV. Paragraph 7(a)(36)(D)(iv) of the Small Business Act. subsections B.1.g.v., B.1.g.vii., and B.1.g.viii. As a result, Nashville's City Council recently approved a significant property tax increase of 34% to make up for the tax losses brought about by COVID-19. (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). First-time borrowers (including newly eligible borrowers) can once again apply under the first-round program. SBA guarantees 100 percent of Second Draw PPP Loans and SBA may forgive up to the full principal loan amount. If a borrower's First Draw PPP loan is under review by SBA and/or information in SBA's possession indicates that the borrower may have been ineligible for the First Start Printed Page 3717Draw PPP Loan it received or for the loan amount it received, the lender will receive notification from SBA when the lender submits an application for a guaranty of a Second Draw PPP Loan and will not receive an SBA loan number until the issue related to the unresolved borrower's First Draw PPP Loan is resolved. (2) What do lenders have to do in terms of loan underwriting? documents in the last year, by the Federal Aviation Administration In addition to the technology platform, the SBA is standing up a PPP customer service team to answer questions and directly assist borrowers with their forgiveness applications. On April 6, 2021, the FAQs were further updated. 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. Ch.1. Under the CARES Act, any single business entity that is assigned a NAICS code beginning with 72 (including hotels and restaurants) and employs not more than 500 employees per physical location is eligible to receive a First Draw PPP Loan. Subsection (c)(2) of the IFR generally defines gross receipts to include all revenue in whatever form received or accrued (in accordance with the entity's accounting method) from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances. See paragraph 7(a)(37)(A)(iv) of the Small Business Act. Generally, receipts are considered total income (or in the case of a sole proprietorship, independent contractor, or self-employed individual gross income) plus cost of goods sold, and excludes net capital gains or losses as these terms are defined and reported on IRS tax return forms. To be eligible for a Second Draw PPP Loan, a borrower must certify on SBA Form 2483-SD that, before the Second Draw PPP Loan is disbursed, the borrower will have used the full loan amount (including any increase) of its First Draw PPP Loan "only for eligible expenses." SBA will consider these comments and the need for making any revisions as a result of these comments. They have already, or will soon, use the full amount of their first . The IFR specifies that any forgiveness amount of a First Draw PPP Loan that a borrower received in calendar year 2020 is excluded from a borrower's gross receipts. (2) At the time an applicant submits its loan application form, it must submit the following unless the documentation was submitted to the lender for the First Draw PPP Loan (i.e., the applicant used calendar year 2019 figures to determine both its First Draw PPP Loan amount and its Second Draw PPP Loan amount, and 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): (i) If the applicant is not self-employed, the applicant's Form 941 (or other tax forms containing similar information) and state quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever was used to calculate payroll), as applicable, or equivalent payroll processor records, along with evidence of any retirement and employee group health, life, disability, vision and dental insurance contributions, must be provided. Act does not clarify what is intended by & quot ; receive.. 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