PPP Reopening: Round 1 and Round 2 PPP Loan Updates

Here is what we know about the PPP reopening:

• PPP Round 1 loans will reopen to those businesses that have not yet received a PPP loan on Monday, January 11. For the first 2 days, the SBA will only be accepting applications from lenders that are deemed “community financial institutions.”
• PPP Round 2 loans will open Wednesday, January 13^th, still only for those applying through a community financial institution.
• The PPP loan program will then open to all participating lenders shortly thereafter (whatever that means as it is currently unknown).

For the PPP continued access program (PPP Round 1):

• Most of the SBA interim final rules are all still in place, however the following are a few modifications.
• Borrowers can use their 2019 or 2020 average monthly payroll to determine max PPP loan amount
• Borrowers now gaining access to PPP program include certain 501(c) (6) organizations

For PPP Round 2 loans:

• Many of the same rules, calculations and certifications remain from PPP Round 1
• Application opens for entities using community financial institutions on January 13, 2021, shortly thereafter it will be available to all participating lenders and ends on March 31, 2021.
• Maximum loan size $2million individual entity or $4million in aggregate for group considered a single entity
• Must have a 25% or greater reduction in revenue for any 2020 quarter compared to same quarter in 2019, borrower can use an annual reduction if 2020 revenue is at least 25% less than 2019 revenue. Gross revenue generally includes all revenue from whatever sources; however, gross revenue does not include Round 1 of PPP funds and a few other exceptions.
• 300 employee maximum, exception for certain borrowers (NAICS Code 72, 511110 or 5151) 300 per physical location
• Must have previously received a Round 1 PPP loan and used or will use all funds prior to expected disbursement date of Round 2 PPP loan.
• With respect to the “Affiliation Rules” as PPP Round 1, except ownership affiliation rules are waived for a business concern with not more than 300 employees that is either a business concern that is assigned a NAICS code beginning with 72, a business concern that is majority owner or controlled by a business concern that is assigned a NAICS code beginning with 511110 or 5151, or a nonprofit organization that is assigned a NAICS code beginning with 5151. For purposes of computing employees, all employees of any domestic and/or foreign affiliates are included in the employee count
• Entities excluded from PPP Round 2 are the same entities that were excluded in Round 1 and Publicly traded companies, entities engaged in political or lobbying activities and pretty much any business that has any ownership or operation connection to China or the People’s Republic of Hong Kong.
• Individual lenders will dictate what documents they require and in what form. Keep an eye out for information from your lenders on what they will specifically request with your application.

This blog is not intended to be all inclusive as there are certain items that are of specific interest and applicability to the hospitality, newspaper publishers, radio and television broadcasting industries and certain not for profits.

We will continue to keep you updated on the PPP reopening as more information becomes available. Visit our COVID-19 Response Center for the latest information.