If you are interested in applying for Second Draw PPP Loans, or will be a first-time borrower, please take a look at the key requirements below. While these requirements are listed from one bank, they follow the requirements as stated by the SBA and Treasury, as other lenders will.
Key requirements for all applicants:
- You are an authorized representative who can borrow on behalf of the business.
- You have an active Business Checking account with your Bank.
- Must have been in business as of February 15, 2020 and your business hasn’t been permanently closed.
- If applying as a franchise, you will need to enter the SBA Franchise Identifier Code at the time of application. You can find that code at sba.gov/sba-franchise-directory. If your franchise isn’t on the directory, please contact your local SBA District Office to help you get it added.
- You should review the requirements and guidance provided by the SBA for complete information regarding the PPP. The SBA continues to release updated guidance. For the most updated PPP rules, requirements and other information, visit SBA.gov and Treasury.gov. You may also want to contact your accountant, attorney or other trusted advisors.
PPP Overview: first and second-time borrowers
First-time borrowers (including affiliates) in general:
- Can have no more than 500 employees (or fewer or more for certain business types for certain SBA size standards)
- Accommodations and Food Services companies with NAICS code 72 can have no more than 500 employees per physical location
- The loan can be up to 2.5 times the business’ average monthly payroll costs, up to a $10 million loan maximum (or $20 million for a corporate group)
Second-time borrowers (including affiliates) in general:
- Can have no more than 300 employees
- Accommodations and Food Services companies with NAICS code 72 can have no more than 300 employees per physical location
- The second loan can be up to 2.5 times the business’ average monthly payroll costs, up to a $2 million loan maximum (or $4 million for a corporate group)
- Accommodations and Food Services companies with NAICS code 72 can borrow up to 3.5 times the business’ average monthly payroll costs, up to a $2 million loan maximum
- The business must have experienced a revenue reduction of 25% or greater in 2020 relative to 2019. In general, a borrower may calculate this revenue reduction by comparing quarterly gross receipts for one quarter in 2020 with the gross receipts for the same quarter in 2019. A business that does not file quarterly or was not in operation for all four quarters of 2019 may still qualify; see the SBA guidelines for details.
- Used or will use the full amount of the first PPP loan for authorized purposes on or before the expected date of disbursement of the second PPP
Loan Documents you will need when applying (For both first and second-time borrowers):
If you file IRS Form 1040 Schedule C or 1040 Schedule F:
You must upload all of the following:
- 2019 or 2020* (whichever you used to calculate loan amount) Form 1040 Schedule C or Form 1040 Schedule F
Have no employees:
- 2019 or 2020* (whichever you used to calculate loan amount) IRS Form 1099-MISC detailing nonemployee compensation received (box 7), if applicable
- 2019 or 2020* (whichever you used to calculate loan amount) invoice, bank statement or book of record that establishes you are self-employed. [if 1099 not provided]
- A 2020 invoice, bank statement or book of record to establish you were in operation on or around February 15, 2020.
Have employees:
- 2019 or 2020* (whichever you used to calculate loan amount) Form 941 (or other tax forms or equivalent payroll processor records containing similar information)
- State quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020* (whichever you used to calculate loan amount) or equivalent payroll processor records
- A payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish you were in operation on February 15, 2020.
If you file IRS Form 1065 (Partnership):
You must upload all of the following:
- 2019 or 2020* (whichever you used to calculate loan amount) IRS Form 1065 (including K-1s) and other relevant supporting documentation if the partnership has employees
- 2019 or 2020* (whichever you used to calculate loan amount) IRS Form 941 State quarterly wage unemployment insurance tax reporting form from each quarter (or equivalent payroll processor records or IRS Wage and Tax Statements)
- Records of any retirement or health insurance contributions
- If the partnership has employees, a payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish the partnership was in operation and had employees on that date.
- If the partnership has no employees, an invoice, bank statement or book of record establishing the partnership was in operation on February 15, 2020 must instead be provided
If you file IRS Form 1120-S (S-Corp) or Form 1120 (C-Corp):
You must upload all of the following:
- 2019 or 2020* (whichever you used to calculate loan amount) IRS Wage and Tax Statements (such as IRS Form 940, IRS Form W-3, or IRS Form W-2s) or equivalent payroll processor records or IRS Form 941 and state quarterly wage unemployment insurance tax reporting form from each quarter
- 2019 or 2020* (whichever you used to calculate loan amount.) IRS Form 1120, IRS 1120-S
- Records of any retirement or health insurance contributions
- 2020 Q1 IRS Form 941, a payroll statement or similar documentation from the pay period that covered February 15, 2020 to establish you were in operation and had employees on that date
If you file IRS Form 990 (Non-profit):
You must upload all of the following:
- 2019 or 2020 (whichever you used to calculate loan amount) IRS Wage and Tax Statements (such as IRS Form 940, IRS Form W-3, or IRS Form W-2s) or equivalent payroll processor records or IRS Form 941 and state quarterly wage unemployment insurance tax reporting form from each quarter
- 2019 or 2020* (whichever you used to calculate loan amount) IRS Form 990 Part IX or other documentation of any retirement and health insurance contributions, if applicable
- 2020 Q1 IRS Form-941, a payroll statement or similar documentation from the pay period that covered February 15, 2020 to establish you were in operation and had employees on that date
Second-time borrowers only:
- Documentation that shows the business experienced a revenue reduction of 25% or greater in 2020 relative to 2019.
IMPORTANT NOTE: For loan requests of $150,000 or less, you won’t have to provide documentation when you apply for the loan, but you will have to provide documentation when you request Forgiveness.
– If your first PPP loan was NOT through the same bank you are currently applying for the second loan, have the information available:
SBA loan #
First PPP loan amount
*If using 2020 to calculate loan amount, this is required regardless of whether you have filed a 2020 tax return with the IRS.
Source:
