Who Is Eligible?
Since it is the responsibility of the borrower to determine eligibility, we encourage you to read the rules published by the SBA.
Here are some highlights and details from the PPP Round 2 program based on what the SBA has released thus far:
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. A borrower must calculate this revenue reduction by comparing the borrower's quarterly gross receipts for one quarter in 2020 with the borrower's gross receipts for the corresponding quarter of 2019.
PPP Loan Amount Calculation
- 2.5x Average Monthly Payroll
- 3.5X Average Monthly Payroll for the Accommodations & Food Services Sector
What are the terms?
Second Draw PPP Loans are generally subject to the same terms, conditions and requirements as First Draw PPP Loans. These include, but are not limited to the following terms:
• The guarantee percentage is 100 percent.
• No collateral will be required.
• No personal guarantees will be required.
• The interest rate will be 100 basis points or one percent, calculated on a non-compounding, non-adjustable basis.
• The maturity is five years.
• All loans will be processed by all lenders under delegated authority and lenders will be permitted to rely on certifications of the borrower to determine the borrower's eligibility and use of loan proceeds.
Who can apply?
Businesses, some nonprofit organizations, self-employed workers and independent contractors are among those eligible. Existing PPP borrowers may apply for a second loan, provided they have 300 or fewer employees and can demonstrate they experienced a 25% reduction in gross receipts during a quarter in 2020 compared with the same quarter in 2019. Any PPP money received in 2020 does not count towards the calculation for “gross receipts.” First-time PPP borrowers will be subject to the program's original eligibility rules. Existing PPP borrowers do not have to have their first PPP loan forgiven in order to receive a second draw PPP loan.
What are the forgiveness requirements?
The bill provides a simplified forgiveness process for PPP loans under $150,000. These borrowers will need to complete a one-page certification attesting they complied with program requirements, along with providing other information. This simplified process will apply to 1st draw PPP loans that have yet to be forgiven, as well as 2nd draw PPP loans.
Second Draw PPP Loans are also eligible for loan forgiveness on the same terms and conditions as First Draw PPP Loans. So, for the vast majority of borrowers (those borrowing less than $150,000), you can apply for forgiveness with a one-page attestation, which should be out in the next few weeks.
Borrowers are required to spend at least 60% of the funds on payroll to receive full forgiveness. The other 40% may be used on eligible costs. These costs include certain mortgage expenses, rent and utility payments. The bill expands forgivable expenses to include expenditures for personal protective equipment and other gear to protect workers; supplier costs; operations expenditures, such as software; and property damage costs due to public disturbances during 2020.
The legislation also clarifies that businesses that received PPP loans may take tax deductions for the expenses covered by forgiven loans.
How Our Funding Process Works
(3 questions to answer), you will be immediately redirected to the Cross River Bank PPP application to complete. Simultaneously you will get an email from Yarrow at the time you complete your link with instructions to complete the application if you did not do it already.
3) Once the PPP application with Cross River is completed, you will have your own web portal created that will allow you to track the status, upload documents, and receive timely updates on your application.
4) Please look for emails from both Cross River and Yarrow with updates to your application. THIS IS VERY IMPORTANT to follow the instructions given and act fast or the application will not be funded.
*GB Financial Consulting Firm Inc. an ISO partner with Yarrow Financial in conjunction with Cross River Bank.
