FirstBank Accepting Applications for Second Round of SBA PPP Funding - Aspen Real Life
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FirstBank Accepting Applications for Second Round of SBA PPP Funding

On Dec. 21, 2020, Congress passed an additional stimulus package that should have a positive impact for both new and existing Small Business Association (SBA) Paycheck Protection Program (PPP) borrowers. As of Jan. 19, FirstBank began accepting applications through its online application portal. Here is a brief summary of the key updates to the program based on an initial review of the information.

On Dec. 21, 2020, Congress passed an additional stimulus package that should have a positive impact for both new and existing Small Business Association (SBA) Paycheck Protection Program (PPP) borrowers. As of Jan. 19, FirstBank began accepting applications through its online application portal. Below is a brief summary of the key updates to the program based on an initial review of the information. For more in-depth information, visit the FirstBank SBA PPP blog

“It’s important for businesses in need to know that there is more funding out there, are we’re here to bridge that gap,” said Dave Portman, FirstBank Roaring Fork Valley Market President. “This round of funding has expanded guidelines on who is eligible, how the funds can be used, with more information on loan forgiveness. We encourage businesses to find more information on our SBA PPP information page, or to visit any of our three branches in the Valley. We don’t expect as much urgency or stress this time, but our teams are ready to help.

“As always, you should contact your tax or legal advisor regarding the details of the new legislation and how it will apply to your situation,” Portman added.

These funds are available to businesses that are applying for the first time (First Draw), as well as those who have received a loan during the first round of SBA PPP funding back in 2020 (Second Draw).

First Draw PPP Loans Available to Additional Business Types

  • Loans have now been made available to businesses who have not previously received a PPP loan.
  • Some previously ineligible business types such as news organizations, 501(c)(6) organizations, destination marketing organizations, and housing cooperatives are now eligible, subject to certain restrictions.
  • The general eligibility requirements are:
    • Your business has fewer than 500 employees (300 for some newly eligible business types)
    • Your business was operational before February 15, 2020 and remains operational
  • Under this program, borrowers may receive a loan up to 2.5 times their average monthly payrolls cost but not to exceed $10 million. In order to be eligible for forgiveness, funds must be used for covered expenses in any period between eight and 24 weeks, as elected by the borrower. 
  • Official program rules as published by the SBA and the Department of the Treasury can be found reviewing the Amended Program Rules.

Second Draw PPP Loans

  • The most impacted businesses are now eligible to obtain a “Second Draw” PPP loan of up to $2,000,000. 
  • The general eligibility requirements are:
    • Your business has fewer than 300 employees (if you have multiple locations, you may not have more than 300 employees per location)
    • You are able to demonstrate a revenue reduction of at least 25% in any quarter of 2020 when compared with the same quarter in 2019
  • You have used or will use the full amount of the first-draw PPP loan
  • Your business was operational before February 15, 2020 and remains operational
  • Under the PPP Second Draw Program, borrowers may receive additional funding up to 2.5 times their average monthly payrolls cost but not to exceed $2 million. 
  • Businesses in industries assigned to NAICS code 72 (Accommodations and Food Services) are eligible for 3.5 times their average monthly payroll costs but not to exceed $2 million. 
  • Official program rules as published by the SBA and the Department of the Treasury can be found by reviewing the Second Draw Program Rules.

 More pertinent information and new forms from the SBA are expected in order to resume accepting applications for loan forgiveness, as well as to accept requests for PPP loan increases.  Please visit the product pages below for additional details and updates.

 Additional Updates

  • Covered Expenses: The allowable uses of the funds that qualify for forgiveness have been expanded to include overhead costs tied to human resources, accounting, software, and cloud computing; property damage due to public disturbances in 2020 that are not covered by insurance; payments to suppliers pursuant to a contract or purchase order for goods that was in effect prior to taking out the loan and the goods were essential to the business’ operations; and worker protection expenses such as PPE or other costs to help comply with federal health and safety guidelines.
  • Covered Period: A more flexible covered period has been included which will allow borrowers the option to choose any length between eight and 24 weeks as their covered period.
  • Additional Business Eligibility: News organizations, 501(c)(6) organizations, destination marketing organizations (DMOs), and housing cooperatives are now eligible.  To meet size eligibility requirements, News Organizations are limited to no more than 500 employees per location and 501(c)(6) Organizations, DMOs, and housing cooperatives are limited to 300 employees.
  • EIDL Clarification: An Economic Injury Disaster Loan Advance will no longer be deducted from any PPP loan forgiveness.
  • Ineligible Entities: Similar to the first round, ineligible entities includes those entities listed in 13 C.F.R 120.110 (excluding those that have otherwise been made eligible and non-profits and religious organizations),  entities involved in political and lobbying activities, entities affiliated with entities in the People’s Republic of China, registrants under the Foreign Agents Registration Act, publicly traded companies, and entities that receive a grant under the Shuttered Venue Operator Grant program. 
  • IRS Expense Guidance: The IRS has updated their guidance clarifying that expenses paid for with PPP funds will be tax deductible and any forgiveness received will not be treated as taxable income.
  • Loan Increases:  Businesses that did not accept or return a loan may reapply for a loan for and businesses that did not accept the full amount may request a modification of the loan to the maximum amount applicable.
  • Seasonal Businesses: A seasonal business has been defined as a business that does not operate for more than seven months in any calendar year or earned no more than 33.33% of its gross revenue in any six months in the prior calendar year.

If you’d like to learn more on this second round of SBA PPP funding, FirstBank Roaring Fork Valley Market President Dave Portman and Vice President Andrew Reed joined Mike Mercatoris on Carbondale’s own, The Coventure Podcast: Apple Podcasts, Google Podcasts

*Please note this summary is based on currently available information and is subject to change. While the SBA has released initial rules reflecting the new legislation, it’s expected that additional guidance and rule clarifications to be forthcoming as certain pieces will be dependent not only on how the requirements are implemented by the SBA, but also by other agencies including the Internal Revenue Service (IRS). It’s encouraged you thoroughly review the details of the program and contact your tax or legal advisor regarding how it will apply to your situation.

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