Paycheck Protection Program Loans

The Economic Aid Act was signed into law on December 27, 2020.  The Act authorizes the Small Business Administration (SBA) to provide another round of lending under the Paycheck Protection Program (PPP).  Among other things, the Economic Aid Act will reopen the application portal for companies or individuals who have not previous received a PPP loan (PPP First Draw Note), and also add a secondary program titled Paycheck Protection Program Second Draw Notes.

Applications for the PPP First Draw Note and PPP Second Draw Note can be found on our website, citizenscommerce.com.  The deadline for applying is March 31, 2021.

Paycheck Protection Program First Draw Notes

Paycheck Protection Program First Draw Notes are available to companies or individuals that did not previously apply for a Paycheck Protection Program loan.  Borrower are eligible for 2.5 times their average monthly payroll.  Borrowers under NAICS code 72, primarily hospitality industries, qualify for 3.5 times their average monthly payroll.  The business cannot employ more than 300 employees.  Loan terms include:  SBA guaranteed, 1.0% interest, five year maturity and ten months of payment deferment.

Forgiveness qualifications are very similar to the first round, with qualifying expenses being expanded to include personal protective equipment and some other expenses.  The covered period continues to be 8-24 weeks.  In order to qualify for full forgiveness, payroll qualifying expenditures (payroll, health insurance, retirement contributions, etc.) must comprise 60.0% of the loan amount.

SBA PPP First Draw Application Form

Paycheck Protection Program Second Draw Notes

To be eligible for a second draw note, you or your business must have experienced a 25.0% reduction in gross revenue.  To meet the requirement, revenue for any quarter in 2020 can be compared to the same quarter in 2019.  Or, annual revenue for 2020 can be compared to annual revenue for 2019.  Additionally, you have to prove that you qualify for full forgiveness on your first PPP loan (PPP First Draw note), or will qualify prior to disbursement of the second note.

Borrowers are eligible for 2.5 times their average monthly payroll, with the maximum loan amount being $2.0 million.  Borrowers under NAICS code 72, primarily hospitality industries, qualify for 3.5 times their average monthly payroll up to $2.0 million.  The business cannot employ more than 300 employees.  Loan terms include:  100.0% SBA guaranteed, 1.0% interest, five year maturity and ten months of payment deferment.

Forgiveness qualifications are very similar to the first round, with qualifying expenses being expanded to include personal protective equipment and some other expenses.  The covered period continues to be 8-24 weeks.  In order to qualify for full forgiveness, payroll qualifying expenditures (payroll, health insurance, retirement contributions, etc.) must comprise 60.0% of the loan amount.

SBA PPP Second Draw Application Form

In addition to your application, the following supporting documentation is needed:

PPP First Draw Note

  • Quarterly payroll tax records
  • Internal payroll records
  • Benefit records (health, life, retirement)

PPP Second Draw Note if Citizens Commerce processed the first PPP loan

  • Documentation to support a 25.0% decline in revenue

PPP Second Draw Note if another bank processed the first PPP loan

  • Documentation to support a 25.0% decline in revenue
  • Forgiveness documentation on the first PPP loan
  • Quarterly payroll tax records
  • Internal payroll records
  • Benefit records (health, life, retirement)

Document Delivery

Timeline

With the deadline for applying being March 31, 2021, we encourage you to apply as soon as possible.  We anticipate heavy demand for the program.  We plan to process applications as expeditiously as possible.  It is our pleasure to assist you through these unprecedented times.  We appreciate your business.