SBA Releases New Application and Guidance on PPP Loans

The SBA released a new application and two Interim Final Rules (IFRs) this week that clarify how businesses and nonprofits can qualify and apply for the second round of Paycheck Protection Program (PPP) loans under the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (Economic Aid Act).

According to the new guidance, the second round of loans will be issued under many of the same terms as first draw loans, such as the 5-year maturity date, 1% interest rate, full loan forgiveness potential and good faith certification requirement.

In addition, the IFRs provide the following updates and clarifications:
Application deadline for second draw PPP loans is March 31, 2021.To qualify, repeat PPP borrowers must use the full amount of the initial PPP loan for authorized purposes on or before the expected date of disbursement of the second draw loan – in addition to meeting the new eligibility requirements for all applicants (generally, 25% revenue reduction and 300 or fewer employees).Any borrower that was deemed ineligible for a first draw loan cannot apply for a second draw loan.

The IFRs also explain the methodologies for calculating eligibility requirements and maximum loan size for second draw PPP loans.
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