Skip to content

Business Resources

U.S. Small Business Administration

Paycheck Protection Program (PPP) Round 2

The latest updates to the Paycheck Protection Program.

January 8, 2021

As part of the recently signed Coronavirus relief and stimulus package, an additional $284 billion in Paycheck Protection Program (PPP) funds will soon be available to eligible small businesses. The Small Business Administration (SBA) has 10 days to implement new rules and guidance regarding these “second draw” loans. Redstone Bank will begin accepting applications as soon as possible after the final guidance from the SBA is available. Stay tuned for more information and visit sba.gov for the latest information regarding second draw PPP funding.

We’ll be sure to communicate additional information as it becomes available. In the meantime, don’t hesitate to reach out to your banker with questions or concerns. While we may not have all the details yet, we are certainly here for you!

Paycheck Protection Program (First-Time) Borrower Application Form


 

Paycheck Protection Program Second Draw Borrower Application Form

           


 

We are here to answer your questions!

Only certain businesses are eligible to receive a PPP loan, and these specifications are different for first-time loan recipients and second-draw recipients.

 

To be eligible for a first-draw PPP loan:

  • Your business has less than 500 full-time, part-time, or seasonal employees.
  • Your business was operational before February 15, 2020 and remains operational.
  • Newly Eligible Applicants:
    • 501(c)(6) organization, housing cooperatives, or eligible destination marketing organization that employs no more than 300 employees.
    • News Organization that is majority owned or controlled by NAICS code 511110 or 5151 business o non-profit public broadcasting entity with a trade or business under NAICS 511110 or 5151 that employs no more than 500 employees per location.
  • Individuals who qualify under the "Redo Provision": any borrower who pulled their application, took a partial loan amount, or paid their PPP back because of public outcry is eligible to re-apply.
  • Farmers that were previously not eligible due to a Net Loss: Farmers are now eligible to apply as first round applicants based on their Gross Income rather than their Net Income. 
    • If you applied for first round but could receive more based on the gross income calculation, you can increase your loan amount IF your loan has not been forgiven yet. 

To be eligible for a second-draw PPP loan:

  • Your business has less than 300 full-time, part-time, or seasonal employees; if you have multiple locations, you may not have more than 300 employees per location.
  • You are able to demonstrate a gross revenue reduction of at least 25% between 2019 and 2020; either on an annual comparison or by comparing one quarter of 2020 to the same quarter in 2019.
  • You have used or will use the full amount of the first-draw PPP.
  • Your business was operational before February 15, 2020 and remains operational.
  • You have used or will use the full amount of the first Draw. You must have used all First Draw Funds before applying for a Second Draw.

Businesses eligible for first- and second-draw PPP loans include:

  • Your business employs less than 500 people for First Draw or 300 people for Second draw.
  • Sole proprietors (Schedule C or Schedule F)
  • Independent contractors
  • Self-employed individuals
  • Certain non-profits (the new bill has expanded eligible businesses to include certain 501(c)(6) non-profit organizations)
  • Seasonal employers; the new bill has clarified the definition of these to be businesses that operate no more than seven months within a year or earn no more than a third of gross receipts within a six-month period.
  • Veteran's Organization
  • Faith-based organizations that have less than 150 employees
  • Housing cooperatives that employ less than 300 people

All businesses will need to fill out the new application (2483 for First Draw Applicants, 2483-SD for Second Draw Applicants) Loan amount will be determined based on what type of operating entity you are.

 

Are you a...

 

Business with Employees

  • You can use your 2019 or 2020 Payroll Information to determine your loan amount.
  • If you are a seasonal business, you may use a 12-week period between 2/15/19 -2/15/20
  • You are eligible for a loan amount based on 3.5x Average Monthly Payroll Costs (BORROWER’S CHOICE TO USE 2019 or 2020)
  • You will need to provide the following information:
    • 941’s or W3 (2019 or 2020)
    • SUTA reports (2019 or 2020)
    • Documentation of any payroll costs for retirement, employee group health, life, disability, vision & dental insurance contributions
    • For Second Draw Applicants: Proof of a 25% revenue reduction from 2019 to 2020, either on annual basis or quarterly basis
      • Annual tax forms
      • Quarterly financial statements or bank statements

**If you applied for your first round PPP with Redstone Bank, we may already have this on file, please talk with your lender**

 

Hotel or Restaurant Industry Business

(NAICS Code Starting with 72)- This increased loan amount is only applicable for Second Draw Applicants

  • You are eligible for a loan based on your average monthly payroll costs X 5
    • All other industries will be limited to 2.5x average monthly payroll costs
  • You will still need to provide all required documentation for businesses with employees (listed above)

 

Partnership

  • You can use your 2019 or 2020 Payroll Information to determine your loan amount
  • You are eligible for a loan based on
    • Net Earnings from Self Employment as shown on your K-1 (2.5 months worth)
    • 2.5x Average Monthly Payroll Costs (2019 or 2020)
  • You will need to provide the following information:
    • Schedule 1065 K-1’s
    • For Second Draw Applicants Proof of a 25% revenue reduction from 2019 to 2020, either on annual basis or quarterly basis
      • Annual Tax forms
      • Quarterly financial statements or bank statements
  • If you also have employees:
    • 941's or W3 (2019 or 2020)
    • SUTA reports (2019 or 2020)
    • Documentation of any payroll costs for retirement, employee group health, life, disability, vision & dental insurance contributions.

**If you applied for your first round PPP with Redstone Bank, we may already have this on file, please talk with your lender**

 

Schedule F Borrower

  • You are eligible for First Draw funding under New Rules & Second Draw Funding if you can show a 25% revenue decrease
  • You are eligible for a loan based on: 
    • Schedule F Gross Income (Maximum of $100,000) (2.5 months worth)
    • 2.5x Average Monthly Payroll Costs
  • You will need to provide the following information:
    • 2019 or 2020 Schedule F
    • If you had employees: 941/W3, SUTA, or other payroll documentation
    • For Second Draw Applicants: Proof of 25% revenue reduction from 2019 to 2020, either on annual basis or quarterly basis
      • Annual tax forms
      • Quarterly financial statements or bank statements

**If you applied for your first round PPP with Redstone Bank, we may already have this on file, please talk with your lender**

 

Schedule C Borrower

  • You can use your 2019 or 2020 Schedule C to determine loan amount.
  • You are eligible for a loan based on:
    • Schedule C Gross Profit Line 7 (2019 or 2020) (2.5 months' worth).
    • 2.5x Average Monthly Payroll Costs (2019 or 2020)
  • You will need to provide the following information:
    • Schedule C (2019 or 2020)
    • For second draw applicants: Proof of a 25% revenue reduction from 2019 to 2020, either on annual basis or quarterly basis.
      • Annual tax forms
      • Quarterly financial statements or bank statements
  • If you also have employees:
    • 2019 or 2020 941's or W3
    • 2019 or 2020 SUTA reports
    • Documentation of any payroll costs for retirement, employee group health, life, disability, vision & dental insurance contributions. 

**If you applied for your first round PPP with Redstone Bank, we may already have this on file, please talk with your lender**

Here's PPP under the Consolidated Appropriations Act, 2021 at-a-glance:

  • $284 billion has been allocated to PPP (including $138 billion of unspent loans from the first round that were reinvested) and the program has been extended to March 31, 2021
  • Second-draw loans are available for businesses with under 300 employees
  • Businesses eligible for PPP loans has been expanded
  • Loan limitations have been expanded for certain businesses
  • Forgiveness for loans under $150K have a new, simplified one-page application
    • While expenses eligible for forgiveness still require a 60/40 split of payroll costs/other eligible expenses, group health insurance benefits are now included in payroll costs (and these entail life insurance, disability benefits, vision, and dental insurance)
  • Eligible expenses for forgiveness have been expanded (for first-draw loans that have not yet been forgiven and for second-draw loans)
  • Borrowers are allowed to choose a covered period that is any period of time between eight and 24 weeks
  • PPP funding includes dedicated set-asides for community lenders (CDFIs and MDIs) and business that operate in low-income areas
  • A clarification has been made indicating that interest rates on PPP loans are non-compounding and non-adjustable 
  • A clarification has been made indicating that forgiven PPP loans are not taxable and forgiven expenses are tax-deductible

Yes, you would qualify to reapply for the First Draw. Any borrower who pulled their application, took a partial loan amount, or paid their PPP back because of public outcry is eligible to re-apply.