The platform runs on top. Therefore, SBA has determined that this rule has no federalism implications warranting preparation of a federalism assessment. Paragraph 7(a)(37)(A)(iv)(III)(bb) of the Small Business Act. Section 339 of the Economic Aid Act added calculated on a non-compounding, non-adjustable basis to the maximum interest rate for a PPP loan. In such cases, additional documentation is not required because the lender already has the relevant documentation supporting the borrower's payroll costs. Subsection (c)(2) also adapts the methodology for calculating affiliate receipts from 13 CFR 121.104. Accordingly, subsections (c)(1)(i) through (c)(1)(iv) of this IFR implement these criteria. The same affiliation rules that apply to First Draw PPP Loans apply to Second Draw PPP Loans, except as provided in this IFR. (3) The maximum amount of a Second Draw PPP Loan to a borrower that is a seasonal employer (meaning an employer that does not operate for more than 7 months in any calendar year or that during the preceding calendar year, had gross receipts for any 6 months of that year that were not more than 33.33 percent of the gross receipts of the employer for the other 6 months of that year) is calculated as the lesser of: (A) At the election of the borrower, the average total monthly payments for payroll costs incurred or paid by the borrower for any 12-week period between February 15, 2019 and February 15, 2020; by, (B) 2.5 (or, only for a borrower assigned a NAICS code beginning with 72 at the time of disbursement as defined in subsection (f)(10), 3.5); or. 28. See subsections (B)(4)(b) and (B)(4)(e) of the Consolidated First Draw PPP IFR. The requirements applicable to PPP lenders are in sections (C) and (D) of the Consolidated First Draw PPP IFR. Call Center Representative at 833-572-0502, or the local SBA Field Office; the list of offices can be found at https://www.sba.gov/tools/local-assistance/districtoffices. 34. Allowing borrowers to calculate payroll costs based on calendar year 2020 is also not expected to result in a significant difference in payroll costs compared to the twelve months preceding the date the loan is made because all Second Draw PPP Loans will be made in the first quarter of 2021. The Second Edition of this best-selling introduction for practitioners uses new 1503 & 1507. (E) The Applicant is not a business concern or entity primarily engaged in political or lobbying activities, including any entity that is organized for research or for engaging in advocacy in areas such as public policy or political strategy or otherwise describes itself as a think tank in any public documents. A partnership must also include its IRS Form 1065 K-1s. The President of the United States issues other types of documents, including but not limited to; memoranda, notices, determinations, letters, messages, and orders. Eligible news organizations with a NAICS code beginning with 511110 or 5151 (or majority-owned or controlled by a business concern with those NAICS codes) may qualify for the affiliation waiver for Second Draw PPP Loans only if they employ 300 or fewer employees per physical location. 13. Ch.1. Rene Moniz, Esq.'s Post Rene Moniz, Esq. 04/17/2023, 35 636) in section 304(b) of the Economic Aid Act. (ii) Each lender's underwriting obligation under the Second Draw PPP is limited to the items above and reviewing the Paycheck Protection Program Second Draw Borrower Application Form (SBA Form 2483-SD) or lender's equivalent form. [5] An entity that is ineligible to receive a First Draw PPP Loan under the CARES Act or Consolidated First Draw PPP IFR is also ineligible for a Second Draw PPP Loan. . For second draw loans, the bill appears to exclude from eligibility borrowers that previously qualified as a "small business concern" under the "alternative size standard" or the borrower's NAICS Code. (4) The maximum amount of a Second Draw PPP Loan to a borrower that did not exist during the 1-year period preceding February 15, 2020, but was in operation on February 15, 2020 (new entity), is calculated as the lesser of: (1) The sum of the total monthly payments by the borrower for payroll costs paid or incurred by the borrower as of the date on which the borrower applies for the Second Draw PPP Loan; by, (2) the number of months in which those payroll costs were paid or incurred; by. Eligible second-draw borrowers include businesses that have already exhausted their first PPP. The IFR specifies that any forgiveness amount of a First Draw PPP Loan that a borrower received in calendar year 2020 is excluded from a borrower's gross receipts. Answer 1. 35), and the Regulatory Flexibility Act (, Paperwork Reduction Act, 44 U.S.C. Paragraph 7(a)(37)(A)(iv)(III)(cc) of the Small Business Act. the official SGML-based PDF version on govinfo.gov, those relying on it for Summary of Key Terms of PPP Second Draw Loans, 3. Business Concerns With More Than One Physical Location, E. Second Draw PPP Loan Application and Documentation Requirements, G. Loans to Borrowers With Unresolved First Draw PPP Loans, IV. 9005) was redesignated as section 7A, transferred to the Small Business Act (15 U.S.C. (4) if the applicant was not in business during 2019, but was in operation on February 15, 2020, the applicant had gross receipts during the second, third, or fourth quarter of 2020 that demonstrate at least a 25 percent reduction from the gross receipts of the entity during the first quarter of 2020 (for example, an applicant that had gross receipts of $50,000 in the first quarter of 2020 and had gross receipts of $30,000 in the fourth quarter of 2020demonstrating a reduction of 40 percent from the applicant's gross receipts during the first quarter in 2020). SBA will set aside available appropriations to fund Second Draw PPP Loans applied for by unresolved borrowers in the event they are approved. Given the short duration of this program, and the urgent need to issue loans quickly, the Administrator in consultation with the Secretary has determined that it is impractical and not in the public interest to provide a delayed effective date. Principally, the Economic Aid Act authorizes further PPP funding and allows prior PPP borrowers to pursue second draw PPP loans. This furthers the purpose of the second draw loan provisions, which is to deliver additional aid to small businesses that previously received a First Draw PPP Loan. Paragraph 7(a)(36)(D)(iv) of the Small Business Act. Handbook on Battery Energy Storage System - Asian Development Bank 2018-12-01 . the Built Environment The complexity of public-private partnership (PPP) project procurement requires an effective process for pricing, managing and . Subsection (c)(2) of the IFR clarifies that this definition, which generally relates to eligible nonprofit organizations, applies only to eligible nonprofit news organizations rather than to all eligible news organizations. The guidance, however, does not clarify what is intended by "receive a . daily Federal Register on FederalRegister.gov will remain an unofficial (Emphasis added). Loans of $150,000 or less account for 93% of outstanding PPP loans, the SBA said. However, if a concern acquired a segregable division of another business concern during 2020, gross receipts do not include the receipts of the acquired division prior to the acquisition. Small Business Paycheck Protection Program Which Paycheck Protection Software fixed by the CARES Act, is implemented by aforementioned Small Business Administration in support from the Department off an Treasury. 601(3)-(6). [29] subsections B.1.g.v., B.1.g.vii., and B.1.g.viii. The Economic Aid Act provides that, 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. Fund can plus be used to pay interest on mortgages, rent, press utilities . partnerships between a public agency and one or several private firms, was excluded. Official websites use .gov A .gov web belongs to an official government organization in the United States. For loans greater than $150,000, Applicant has provided documentation to the lender substantiating the decline in gross receipts. Register, and does not replace the official print version or the official This aggregation applies for the entire period of measurement, not just the period after the affiliation arose. If you did not apply for a second draw loan but have hold code (s) on your 2020 first draw application, your lender must resolve the hold code (s) during the forgiveness process. documents in the last year, 10 (v) For the purpose of determining whether a person has a controlling interest in the entity, the securities owned, controlled, or held by the President, the Vice President, the head of an Executive department, or a Member of Congress, shall be aggregated with the securities held by his or her spouse as determined under applicable common law; (7) any issuer, the securities of which are listed on an exchange registered as a national securities exchange under section 6 of the Securities Exchange Act of 1934 (15 U.S.C. by the Internal Revenue Service This method will be particularly important for small borrowers that may not have quarterly revenue information readily available. In addition, for a Second Draw PPP Loan greater than $150,000, the lender must confirm the dollar amount and percentage of the borrower's revenue reduction by performing a good faith review, in a reasonable time, of the borrower's calculations and supporting documents concerning the borrower's revenue reduction. SBA capping of first- and second-draw PPP loan amount SBA's loan processing system has put in place a loan eligibility amount cap of $35,000 per employee for both first- and second-draw applications, the AICPA letter says, adding that the cap results in the SBA E-Tran system reducing the approved loan amounts. electronic version on GPOs govinfo.gov. Borrowers calculate their average monthly payroll in either 2019, 2020 or their trailing 12 months. (2) What do lenders have to do in terms of loan underwriting? Comment Date: Comments must be received on or before February 16, 2021. Learn more here. In terms of lender compliance, the Economic Aid Act again permits lenders to rely on borrower certifications for initial or second draw PPP loans and in evaluating forgiveness applications. As was the case with the original PPP, actual loan amounts will be based on an applicant's payroll. 301 et seq. This FAQ applies only to First Draw PPP Loans. See PPP FAQ #24 (posted April 13, 2020), available at https://www.sba.gov/sites/default/files/2020-12/Final%20PPP%20FAQs%20%28December%209%202020%29-508.pdf. 18. Second Draw PPP Loans generally are guaranteed by SBA under the same terms, conditions, and processes as First Draw PPP Loans. This summary provides additional information and explains the key terms in the IFR. The PPP reopened Jan. 11 with $284 billion in funding for forgivable loans. (The revenue reduction requirement is addressed in subsection (c)(1)(iv) of this IFR.) Subsection (f) of the IFR uses calendar year 2020 to refer to the twelve-month period prior to when the loan is made. Calculating payroll costs based on calendar year 2020 rather than the twelve months preceding the date the loan is made will simplify the calculations and documentation requirements for borrowers because payroll records are more commonly created and retained on a calendar-year basis. Moreover, this definition will enhance the administrability of Second Draw PPP Loans because it is a definition already used by the Administration and many small businesses. (1) In general, the maximum loan amount for a Second Draw PPP Loan is equal to the lesser of two and half months of the borrower's average monthly payroll costs or $2 million, except as otherwise specified in this subsection (e). In place to avoid making superfluous PPP loan payments, loan must submit loan forgiveness applications to their lenders within 10 months free the end of their respective covered periods. Despite earlier moves to streamline . headings within the legal text of Federal Register documents. Under section 311, SBA may guarantee loans under the PPP Second Draw Program through March 31, 2021 (Second Draw PPP Loans) to borrowers that previously received a PPP loan under section 7(a)(36) of the Small Business Act (First Draw PPP Loans) and have used or will use the full amount of the initial PPP loan for authorized purposes on or before the expected date of disbursement of the Second Draw PPP Loan. Per the SBA's Jan. 14, 2021, Interim Final Ruling (IFR) Protection Program (PPP) Second Draw Loans, if a first draw PPP loan has an unresolved issue, which may be due to hold codes or compliance . of the consolidated interim final rule implementing . (iii) A lender may rely on any certification or documentation submitted by an applicant for a PPP loan or an eligible recipient or eligible entity that (A) is submitted pursuant to all applicable statutory requirements, regulations, and guidance related to a PPP loan, including under sections 7(a)(36) or (37) of the Small Business Act (15 U.S.C. However, no additional documentation to substantiate payroll costs will be required if the applicant (i) used calendar year 2019 figures to determine its First Draw PPP Loan amount, (ii) used calendar year 2019 figures to determine its Second Draw PPP Loan amount (instead of calendar year 2020), and (iii) the lender for the applicant's Second Draw PPP Loan is the same as the lender that made the applicant's First Draw PPP Loan. Section 1106 of the CARES Act (15 U.S.C. From Jan. 11 through Jan. 24, SBA approved more than 400,000 loans for $35 billion, according to an agency report. The Administrator of OIRA has determined that this is a major rule for purposes of the Congressional Review Act (5 U.S.C. 10. (j) Are Second Draw PPP Loans eligible for loan forgiveness? (B) If a borrower has acquired an affiliate or been acquired as an affiliate during 2020, gross receipts includes the receipts of the acquired or acquiring concern. SBA guarantees 100 percent of Second Draw PPP Loans and SBA may forgive up to the full principal loan amount. As a result, Nashville's City Council recently approved a significant property tax increase of 34% to make up for the tax losses brought about by COVID-19. For complete information about, and access to, our official publications should verify the contents of the documents against a final, official Specifically, the RFA normally requires agencies to describe the impact of a rulemaking on small entities by providing a regulatory impact analysis. The Administrator, in consultation with the Secretary, has determined this provision is also necessary to maintain program integrity, prevent abuse, and preserve the availability of Second Draw PPP Loan funds for businesses still in operation. Subsection (c)(1)(ii) of the IFR clarifies that the full amount of the borrower's First Draw PPP Loan includes the amount of any increase on such First Draw PPP Loan made pursuant to the Economic Aid Act. SBA's FAQs on Loan Forgiveness documents in the last year, by the Animal and Plant Health Inspection Service Comments and Immediate Effective Date, III. In addition, this rule is being issued to allow for immediate implementation of this program. Cooper called the budget situation "the worst in Metro's history.". At Womply, a. The end of PPP Millions of other borrowers are in the same position after the $292 billion allocated to the second round of PPP ran out weeks ahead of the May 31 deadline. (vi) All loans will be processed by all lenders under delegated authority and lenders will be permitted to rely on certifications of the borrower in order to determine eligibility of the borrower and the use of loan proceeds. (A) Operates as a sole proprietorship or as an independent contractor, or is an eligible self-employed individual; (B) reports farm income or expenses on a Schedule F (IRS Form 1040); and. The local SBA Field Office may be found at https://www.sba.gov/tools/local-assistance/districtoffices. (Forgiveness not required to apply.) This new section authorizes the U.S. Small Business Administration (SBA or the Administration) to guarantee Paycheck Protection Program Second Draw Loans (PPP Second Draw Program), under generally the same terms and conditions available under the Paycheck Protection Program (PPP) established under section 7(a)(36) of the Small Business Act (15 U.S.C. In some cases, an applicant may receive a second draw typically equal to the first. 19. 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