Paycheck Protection Program



We want to share the latest information about the second PPP (Paycheck Protection Program) with you all. This was shared with us by Prime Meridian Bank and provides good information about this program.

Please let us know if you have any questions or need assistance. We will work with your bank or make a recommendation! Feel free to reach out to us through our website or by emailing us directly at: jessicam@imsbusiness.net

PPP Update

The latest details and changes to Paycheck Protection Program (PPP) loans


The Paycheck Protection Program (PPP), offered through the SBA and the U.S. Treasury Department, is a loan program designed to provide a direct incentive for small businesses to keep their workers on the payroll.

For the current round of funding, there are two options: First Draw PPP and Second Draw PPP loans. Below you will find some of the basic differences and criteria for each. (In addition, at the bottom of this email is information about applying for First Round Forgiveness.)

How To Apply

Banks should soon have access to upload PPP Applications through the SBA portal. If you wish to review an application, you can download the following PPP borrower applications to view the information which will be requested when you apply with us.

You may submit a paper form to us using our Secure Document Upload until our Online Application tool is available. Contact a Prime Meridian Bank Relationship Manager for additional information.

Second Draw PPP Loans

A new ‘second draw’ PPP will offer businesses additional aid

The Program allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan terms as their first.

Second Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

Full Forgiveness Terms

Second Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:

  • Employee and compensation levels are maintained in the same manner as required for the First Draw PPP loan;

  • The loan proceeds are spent on payroll costs and other eligible expenses; and

  • At least 60 percent of the proceeds are spent on payroll costs.

All Second Draw PPP Loans will have the same terms regardless of lender or borrower.

Targeted Eligibility

A borrower is generally eligible for a Second Draw PPP Loan if the borrower:

  • Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;

  • Has no more than 300 employees; and

  • Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

Maximum Loan Amount and Increased Assistance for Accommodation and Food Services Businesses

For most borrowers, the maximum loan amount of a Second Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million. For borrowers in the Accommodation and Food Services sector (click HERE to confirm NAICS Code that begins with 72), the maximum loan amount for a Second Draw PPP Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million.

First Draw PPP Loans

Businesses can apply for PPP loans if they didn’t before

SBA has reopened the Paycheck Protection Program (PPP) for First Draw Loans. First Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

Full Forgiveness Terms

First Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:

  • Employee and compensation levels are maintained;

  • The loan proceeds are spent on payroll costs and other eligible expenses; and

  • At least 60 percent of the proceeds are spent on payroll costs.

All new First Draw PPP Loans will have the same terms regardless of lender or borrower.

Who Can Apply

Eligible small entities, that together with their affiliates (if applicable), have 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors—can apply. Entities with more than 500 employees in certain industries that meet SBA’s alternative size standard or SBA’s size standards for those particular industries can also apply.1

Reapplying and Loan Increases

Existing PPP borrowers that did not receive loan forgiveness by December 27, 2020 may: (1) reapply for a First Draw PPP Loan if they previously returned some or all of their First Draw PPP Loan funds, or (2) under certain circumstances, request to modify their First Draw PPP Loan amount if they previously did not accept the full amount for which they are eligible.

PPP Forgiveness Applicants

If you are already a PPP borrower through Prime Meridian Bank and are ready to initiate a PPP Forgiveness Application, please contact your Relationship Manager to start the process.

If you have questions, please reach out to any member of our Relationship Management team and we will work together to help.

Visit www.sba.gov or www.treasury.gov for more information and details, including the comprehensive program rules.

1 Also eligible to apply for First Draw PPP Loans are businesses with a NAICS Code that begins with 72 (Accommodation and Food Services sector) or eligible news organizations with no more than 500 employees per physical location, as well as housing cooperatives, 501(c)(6) organizations, or destination marketing organizations with no more than 300 employees.

7 views0 comments