Update on PPP Loan
Congress approved an additional $285 billion for Paycheck Protection Program (PPP) loans for small businesses. Below are highlights of what we know, and we’ll share updates and details as we learn more:
- First-time borrowers. In general, borrowers can have no more than 500 employees and their business must have been in operation as of February 15, 2020. The first loan can be up to 5 times the business’ average monthly payroll costs, up to a $10 million loan maximum.
- Second-time borrowers. Businesses can apply for a second PPP loan if they’ve spent or expect to spend the full amount of their first PPP loan before they receive funding for the second loan. In general, borrowers can have no more than 300 employees. The second loan can be up to 2.5 times the business’ average monthly payroll costs, up to a $2 million loan maximum.
- Accommodations and Food Services companies with NAICS code 72 can borrow up to 5 times the business’ average monthly payroll costs, up to a $2 million loan maximum.
- All businesses applying for a second PPP loan must show that their business revenue declined by at least 25% in any quarter in 2020 compared to the same quarter in 2019.
- Businesses can apply for a second loan whether or not they have requested Forgiveness.
- These highlights will apply to many borrowers, but there are some exceptions. For full program details, visit SBA.gov and Treasury.gov.
Congress has set aside funds for new and smaller borrowers, borrowers in underserved communities, and for community and smaller lenders. So, the SBA will roll out the PPP program in phases:
- Some community and smaller lenders, were expected to start January 11 (first loan) and January 13 (second loan)
- Legacy Bank and others under 1 million in assets can begin Friday, January 15.
How to prepare
- You may want to contact your accountant, attorney or other trusted advisors.
- To apply through Legacy Bank, please contact your current loan officer or call Legacy Bank at 316.260.3711.
- Keep checking back here for updates.