Good Afternoon Paycheck Protection Program Borrower,
As many of you are already aware on December 27, 2020, President Trump signed the Economic Aid Act into law. The new legislation provided a much-needed stimulus to the United States economy as COVID-19 continues to impact the entire country. Included in this bill was $284.45 billion allocated to the SBA Paycheck Protection Program (PPP) to fund both first time and “second draw” loan requests.
In continued support of the communities in which we serve, The Farmers National Bank of Emlenton intends to participate in this latest round of Paycheck Protection Program loans. We are awaiting a definitive date from the SBA as to when their origination platform will be opened to participating banks to accept new applications, however, it is anticipated that this will occur within the next week.

Additional communication will be sent via email in the coming days regarding borrower application packages for first and second draw loans, as well as, information pertaining to our online application portal which is set to open alongside the SBA origination platform.

The following will provide a general overview of program changes as presented in the legislation:
  • Includes PPP funding for first-time applicants of the program and provides a “second draw” loan specifically for smaller and harder hit businesses.
  • New Eligible Expenses:
  • Operations expenditures: Payment for any software, cloud computing, and other human resources and accounting needs.
  • Property damage costs: Costs related to property damage due to public disturbances that occurred during 2020 that are not covered by insurance.
  • Supplier costs: Costs to a supplier for goods prior to taking out a loan that are essential to the operations. Supplier costs of perishable goods can be made before or during the life of the loan.
  • Worker protection expenditure: PPE and adaptive investments to help comply with federal health and safety guidelines or any equivalent state and local guidance related to COVID-19 between March 1, 2020 and the end of the national emergency declaration.
  • New Eligible Borrower Business Types:
  • Allows FCC license holder and newspapers with more than one physical location to apply for financial assistance. The bill also makes 511 public broadcasting stations at colleges and universities eligible.
  • The business must have less than 500 employees per physical location
  • 501c6 organizations such as business leagues, chambers of commerce, real estate boards, boards to trade, and professional sports leagues with certain stipulations are eligible to apply
  • The organization must have less than 300 employees
  • Simplified Application for Small Loans:
  • The bill establishes a simplified application process meant to streamline approval for loans under $150,000 
  • The SBA must establish a form for the simplified application within 24 days of enactment of the stimulus package (estimated by January 20, 2021)
  • Loan Terms:
  • The loan will have a term of 5 years with a fixed interest rate of 1.0% per annum.
  • In order to receive full forgiveness, 60% of the loan proceeds must be used for payroll-related expenses and 40% may be used for other eligible uses as outlined in the program.
  • New round funding first time PPP borrowers may refinance their EIDL loan, if applicable.
  • A business may borrow up to 2.5 times the average monthly payroll costs in the one year prior to the loan or calendar year.
  • Businesses assigned to NAICS code 72, the accommodation and food services sector, can receive a loan of up to 3.5 times their average monthly payroll costs.
  • No loan can be greater than $10MM for first draw PPP loans and no greater than $2.0MM for second draw PPP loans.
  • Seasonal employers may calculate the loan amount based on a 12-week period from 2/15/19 to 2/15/20. The bill defines seasonal employers as a business that operates for no more than seven months in a year or earned no more than one-third of its receipts in any six months in the prior calendar year.
  • “Second Draw” Loan Eligibility:
  • “Second draw” loans are meant for smaller and “harder-hit businesses” that already used or will use the full amount of their first PPP loan prior to making an application.
  • In order to receive a second PPP loan, businesses must show at least a 25% reduction in gross receipts in any quarter of 2020 relative to 2019. 
  • If the applicant was NOT in business in 2019, but was in operation as of February 15, 2020 and has gross receipts during the second, third, and fourth quarter of 2020, then the applicant may compare those receipts to the first quarter 2020 information.
  • “Second Draw” Forgiveness:
  • Borrowers are eligible for loan forgiveness equal to the sum of their payroll costs, mortgage or rent, and utility payments as well as operations expenditures, property damage costs, supplier costs, and worker protection costs. 
  • Requires a 60/40 cost allocation between payroll and non-payroll costs in order to receive full forgiveness.
  • Funding of new PPP loans extends through March 31, 2021.
  • Borrowers can choose a “Covered Period” of eight and twenty-four weeks.
  • Economic Injury Disaster Loan advances will no longer be deducted from Paycheck Protection Program loan forgiveness amounts. The SBA will be remitting payment to the bank to cover any previously deducted EIDL advances from PPP borrower forgiveness amounts. Impacted borrowers will be contacted accordingly regarding this updated guidance from the SBA.
We hope that you continue to stay safe and healthy during these times. The Farmers National Bank of Emlenton looks forward to assisting with your Paycheck Protection Program loan.

Warm Regards,

Robert A. Vernick
Senior Vice President
Chief Lending & Bus. Dev. Officer
NMLS# 977437
The Farmers National Bank of Emlenton
612 Main Street
Emlenton, PA 16373
p: 844.882.6436
c: 724.991.9047
f: 724.867.9326