• Round 1 – PPP funds from the first Stimulus Package in March, 2020. 
• Round 2 – PPP funds from the second Stimulus Package in December, 2020.
• First Draw – The first time a member utilizes PPP funding, regardless of which round. (Example – If a member did not apply for PPP during Round 1, but is now participating in Round 2, this would be their “first draw”)
• Second Draw – The second time a member utilizes PPP funding. Only applies to members that took their first draw in Round 1 and are now applying for their second draw in Round 2.

Round 1 Eligibility

• Small businesses
• 501(c)(3) nonprofit organizations
• Sole proprietorships,
• Independent contractors
• Self-employed individuals
• Tribal businesses
• 501(c)(19) Veterans Organizations

Round 2 Eligibility

• Please View The Eligibility Requirements section on this page for more specific requirement details.

• Payroll costs
• Utility costs
• Covered property damage*
• Covered worker protection expenditures*
• Covered supplier costs*
• Rent/mortgage interest payments

* View CARES Act information on the U.S. Department of the Treasury website for a complete breakdown of eligible expenditures

The SBA and Department of the Treasury have provided updated guidance to assist businesses in calculating their payroll costs for purposes of determining the max loan amount of a First Draw PPP loan. Please view the PDF document below for further details.

First Draw PPP Loan Guidance Document

The SBA and Department of the Treasury have provided updated guidance to assist businesses in calculating their payroll costs for purposes of determining the max loan amount of a Second Draw PPP loan. Please view the PDF document below for further details.

Second Draw PPP Loan Guidance Document

If you have no employees, use the following methodology to calculate your maximum loan amount:

Step 1: From your 2019 or 2020 IRS Form 1040, Schedule C, you may elect to use either your line 31 net profit amount or your line 7 gross income amount. (If you are using 2020 to calculate payroll costs and have not yet filed a 2020 return, fill it out and compute the value.) If this amount is over $100,000, reduce it to $100,000. If both your net profit and gross income are zero or less, you are not eligible for a PPP loan.

Step 2: Calculate the average monthly net profit or gross income amount (divide the amount from Step 1 by 12).

Step 3: Multiply the average monthly net profit or gross income amount from Step 2 by 2.5. This amount cannot exceed $20,833.

3a. If you are filing a second round PPP loan and you are a NAICS code beginning in 72 use a 3.5 multiplier.  This amount cannot exceed $29,167.

Step 4: Add the outstanding amount of any Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020 that you seek to refinance. Do not include the amount of any advance under an EIDL COVID19 loan (because it does not have to be repaid).

You must provide the 2019 or 2020 (whichever you used to calculate your loan amount) IRS Form 1040, Schedule C with your PPP loan application to substantiate the applied-for PPP loan amount and a 2019 or 2020 (whichever you used to calculate your loan amount) IRS Form 1099-MISC detailing nonemployee compensation received (box 7), invoice, bank statement, or book of record that establishes you are self-employed. If using 2020 to calculate your loan amount, this is required regardless of whether you have filed a 2020 tax return with the IRS. You must provide a 2020 invoice, bank statement, or book of record to establish you were in operation on or around February 15, 2020.

If you have employees, use the following methodology to calculate your maximum loan amount:

Step 1: Compute 2019 or 2020 payroll (using the same year for all items) by adding the following:

1a. At your election, either (1) the net profit amount from line 31 of your 2019 or 2020 IRS Form 1040, Schedule C, or (2) your 2019 or 2020 gross income minus employee payroll costs, calculated as your gross income reported on IRS Form 1040, Schedule C, line 7, minus your employee 12 payroll costs reported on lines 14, 19, and 26 of IRS Form 1040, Schedule C (for either option, if you are using 2020 amounts and have not yet filed a 2020 return, fill it out and compute the value), up to $100,000 on an annualized basis, as prorated for the period during which the payments are made or the obligation to make the payments is incurred (if this amount is over $100,000, reduce it to $100,000, or if this amount is less than zero, set this amount at zero);

1b. 2019 or 2020 gross wages and tips paid to your employees whose principal place of residence is in the United States, computed using 2019 or 2020 IRS Form 941 Taxable Medicare wages & tips (line 5c, Column 1) from each quarter plus any pre-tax employee contributions for health insurance or other fringe benefits excluded from Taxable Medicare wages & tips; subtract any amounts paid to any individual employee in excess of $100,000 on an annualized basis, as prorated for the period during which the payments are made or the obligation to make the payments is incurred, and any amounts paid to any employee whose principal place of residence is outside the United States; and

1c. 2019 or 2020 employer contributions to employee group health, life, disability, vision and dental insurance (portion of IRS Form 1040, Schedule C line 14 attributable to those contributions); retirement contributions (IRS Form 1040, Schedule C, line 19); and state and local taxes assessed on employee compensation (primarily under state laws 13 commonly referred to as the State Unemployment Tax Act or SUTA from state quarterly wage reporting forms).

Step 2: Calculate the average monthly amount (divide the amount from Step 1 by 12).

Step 3: Multiply the average monthly amount from Step 2 by 2.5.

3a. If you are filing 2nd a second round PPP loan and you are a NAICS code beginning in 72 use a 3.5 multiplier.

Step 4: Add the outstanding amount of any EIDL made between January 31, 2020 and April 3, 2020 that you seek to refinance. Do not include the amount of any advance under an EIDL COVID-19 loan (because it does not have to be repaid).

You must supply your 2019 or 2020 (whichever you used to calculate your loan amount) IRS Form 1040, Schedule C; Form 941 (or other tax forms or equivalent payroll processor records containing similar information); and state quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever you used to calculate your loan amount) or equivalent payroll processor records, along with evidence of any retirement and health insurance contributions, if applicable. A payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish you were in operation on February 15, 2020.

The proceeds of a PPP loan are to be used for the following:

• For borrowers that use net profit to calculate loan amount, owner compensation replacement, calculated based on 2019 or 2020 (using the same year that was used to calculate the loan amount) net profit as described in subsection B.4.b. For borrowers that use gross income to calculate loan amount, proprietor expenses (business expenses plus owner compensation), calculated based on 2019 or 2020 (using the same year that was used to calculate the loan amount) gross income as described in subsection B.4.b (this amount cannot exceed $20,833). For borrowers who used gross income to calculate the loan amount and have no employees, proprietor expenses equal gross income. For borrowers who used gross income to calculate the loan amount and have employees, proprietor expenses equal the difference between gross income and employee payroll costs.
• Employee payroll costs (as defined in subsection B.4.g. of the consolidated interim final rule implementing updates to the PPP) for employees whose principal place of residence is in the United States, if you have employees.
  
  
• Mortgage interest payments (but not mortgage prepayments or principal payments) on any business mortgage obligation on real or personal property (e.g., the interest on your mortgage for the warehouse you purchased to store business equipment or the interest on an auto loan for a vehicle you use to perform your business), business rent payments (e.g., the warehouse where you store business equipment or the vehicle you use to perform your business), and business utility payments (e.g., the cost of electricity in the 15 warehouse you rent or gas you use driving your business vehicle). You must have claimed or be entitled to claim a deduction for such expenses on your 2019 or 2020 (whichever you used to calculate loan amount) IRS Form 1040, Schedule C for them to be a permissible use. For example, if you did not claim or are not entitled to claim utilities expenses on your 2019 or 2020 IRS Form 1040, Schedule C, you cannot use the proceeds for utilities.
  
  
• Interest payments on any other debt obligations that were incurred before February 15, 2020 (such amounts are not eligible for PPP loan forgiveness).
  
  
• Refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020 (maturity will be reset to PPP’s maturity of two years for PPP loans made before June 5, 2020 unless the borrower and lender mutually agree to extend the maturity of such loans to five years, or PPP’s maturity of five years for PPP loans made on or after June 5).
  
  
• Covered operations expenditures, as defined in section 7A(a) of the Small Business Act, to the extent they are deductible on IRS Form 1040, Schedule C.
  
  
• Covered property damage costs, as defined in section 7A(a) of the Small Business Act, to the extent they are deductible on IRS Form 1040, Schedule C.
  
  
• Covered supplier costs, as defined in section 7A(a) of the Small Business Act, to the extent they are deductible on IRS Form 1040, Schedule C.
  
  
• Covered worker protection expenditures, as defined in section 7A(a) of the Small Business Act, to the extent they are deductible on Form IRS 1040, Schedule C.

The CARES Act requires each applicant applying for a PPP loan to certify in good faith “that the uncertainty of current economic conditions makes necessary the loan request to support the ongoing obligations” of the applicant. SBA, in consultation with Treasury, issued additional guidance concerning how SBA will review the required good-faith certification. See FAQ 46 (as originally posted May 13, 2020). This guidance included a safe harbor providing that any PPP borrower, together with its affiliates, that received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith. In light of the additional flexibility being provided to certain borrowers to use their gross income amount, as reported on line 7 of IRS Form 1040, Schedule C, borrowers that elect to use gross income to calculate their maximum loan amount for a First Draw PPP Loan and that report more than $150,000 in gross income on the Schedule C that was used to calculate the borrower’s loan amount will not automatically be deemed to have made the required certification concerning the necessity of the loan request in good faith.

SBA may review their certification that “Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” If SBA determines that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA may determine that the borrower was not eligible for the loan, for the loan amount, or for loan forgiveness.

As defined in the recent interim final rule issued from the SBA, in order to be eligible for the increased maximum loan amount equal to 3.5x months of payroll cost in the 2nd draw only, the business must have a NAICS code beginning with 72.  This code can be located on the business tax return, this resides in section B (Business activity code).

Search For Your Code Using the NAICS & SIC Identification Tools >

If this is the FIRST time the businesses is applying for PPP funds (considered their “First Draw”), they do NOT have to demonstrate the 25% reduction in gross receipts. The 25% reduction requirement only applies to repeat PPP applicants (“Second Draw”).

• Compensation in excess of an annual salary of $100,000 as prorated for the covered period
• Compensation for employees not residing in the U.S.
• Qualified family leave wages for which a credit is allowed under the Families First Coronavirus Response Act

A major benefit that comes with this program is the ability to have a portion or all of your Paycheck Protection loan forgiven and turned into a grant. The forgiveness program is designed to support employment and comes with requirements on maintaining a specific level of employees and compensation during the allotted time period. Rest assured that we will share details of the forgiveness program once more information is provided by the SBA.

• Fixed rate of 1.00% APR
• No collateral or personal guarantee required
• Loan term of 60 months
• Up to 100% of the loan can potentially be forgiven with approval