Update on the new round of PPP Loans
January 14. 2021
Message from Dave White, Chief Lending Officer, Farmers Bank and Trust:
I know many business owners are paying close attention to announcements about the additional funding Congress approved for Paycheck Protection Program (PPP) loans for small businesses.
Below are highlights of what we know -
- First time borrowers. In general, borrowers can have no more than 500 employees and their business must have been in operation as of February 15, 2020. The first loan can be up to 2.5 times the business’ average monthly payroll costs, up to a $10 million loan maximum.
- Second-time borrowers. Businesses can apply for a second PPP loan if they’ve spent or expect to spend the full amount of their first PPP loan before they receive funding for the second loan. In general, borrowers can have no more than 300 employees. The second loan can be up to 2.5 times the business’ average monthly payroll costs, up to a $2 million loan maximum.
- Hotel and Restaurant companies with NAICS code 72 can borrow up to 3.5 times the business’ average monthly payroll costs, up to a $2 million loan maximum.
- All businesses applying for a second PPP loan must show that their business revenue declined by at least 25% in any quarter in 2020 compared to the same quarter in 2019.
- Businesses can apply for a second loan regardless if they have requested Forgiveness.
- These highlights will apply to many borrowers, but there are some exceptions. For full program details, visit sba.gov and Treasury.gov.
Congress has set aside funds for new and smaller borrowers, borrowers in underserved communities, and for community development and smaller lenders. So, the SBA will roll out the PPP program in phases:
- Community development and smaller lenders are expected to start January 11 (first loan) and January 13 (second loan).
- Lenders with less than $1 Billion in assets are scheduled to begin Friday, January 15.
- Lenders with more than $1 Billion in assets, including Farmers Bank and Trust, are scheduled to begin Tuesday, January 19.
How to prepare
- You should contact your accounting professional to review your revenues for eligibility and begin compiling supporting payroll and expense documentation for the application process.
- For full program details and relevant loan forms, visit sba.gov and Treasury.gov.
- Please check back for updates and feel free to contact your loan officer for more information.
Thank you for being a Farmers Bank & Trust Customer,
Chief Lending Officer