January 11, 2021 12:00 pm

Congress recently passed a $900 billion COVID-19 relief bill that reopens the Paycheck Protection Program (PPP) that ended in early August, 2020.  Under the PPP small business can borrow money from private lenders without collateral, personal guarantees or fees.

The maximum loan amount is $2 million for “second draw” loans.  A borrower may qualify for loans up to 2.5 times average monthly payroll costs.  Businesses in the accommodation and food service industries, such as restaurants and hotels, may receive up to 3.5 times their average monthly payroll cost.

Pawtucket Credit Union is currently accepting PPP applications for the Paycheck Protection Program (PPP) loans.

At this time, the Small Business Administration has issued two different application options depending on whether this is a first or second draw loan. Details of each may be found on the respectively named tab on this page.  Businesses will need to review these options and their instructions to determine which application applies to them. Additionally, businesses will also need to decide whether they will elect for the 8-week forgiveness period or the 24-week forgiveness period. With both of these elections, businesses will submit the forgiveness application documents once all PPP loan proceeds have been used on eligible expenses, as outlined in the instructions.

You will find the appropriate applications on their respective tabs.

Once the application is completed, print the completed application, sign it, scan the signed application and upload the signed application as a PDF along with any additional required supporting documentation to our secure document portal under the tab labeled “Upload Loan Documents” below.

If you have any questions regarding this process, please contact your PCU loan officer. Once you have completed the forgiveness application and have all of the required documentation, your paperwork can be uploaded through using the tab labeled “Upload Loan Documents” below   or can be mailed to Pawtucket Credit Union headquarters at 1200 Central Avenue, Pawtucket, RI 02861.

Still have questions? Frequently asked questions regarding the PPP program and their answers may be found here on the SBA website.

PAYCHECK PROTECTION PROGRAM FIRST DRAW LOANS

SBA is reopening the Paycheck Protection Program (PPP) for First Draw Loans the week of January 11, 2021. 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.

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.

How and When to Apply

Borrowers can apply for a First Draw PPP Loan until March 31, 2021, through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, eligible non-bank lender, or Farm Credit System institution that is participating in PPP. All new First Draw PPP Loans will have the same terms regardless of lender or borrower; additional information and full terms can be found HERE.

Ensuring Access for All

SBA continues to call upon its lending partners, including Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs), to redouble their efforts to assist eligible borrowers in underserved and disadvantaged communities. At least $15 billion is being set aside for First Draw PPP loans to eligible borrowers with a maximum of 10 employees or for loans of $250,000 or less to eligible borrowers in low- or moderate-income neighborhoods. To promote access for smaller lenders and their customers, SBA will initially only accept loan applications from community financial institutions starting on January 11, 2021. The PPP will open to all participating lenders shortly thereafter.

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

PPP Borrower Application Form (Revised 2.17.2021)

PAYCHECK PROTECTION PROGRAM SECOND DRAW LOANS

The Paycheck Protection Program (PPP) now 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 Draw PPP Loan. 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.

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 for NAICS 72 to confirm), the maximum loan amount for a Second Draw PPP Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million.

How and When to Apply

Borrowers can apply for a Second Draw PPP Loan until March 31, 2021, through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, eligible non-bank lender, or Farm Credit System institution that is participating in PPP. All Second Draw PPP Loans will have the same terms regardless of lender or borrower; additional information and full terms can be found HERE.

Ensuring Access for All

SBA continues to call upon its lending partners, including Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs), to redouble their efforts to assist eligible borrowers in underserved and disadvantaged communities. At least $25 billion is being set aside for Second Draw PPP Loans to eligible borrowers with a maximum of 10 employees or for loans of $250,000 or less to eligible borrowers in low- or moderate-income neighborhoods. To promote access for smaller lenders and their customers, SBA will initially only accept Second Draw PPP Loan applications from community financial institutions starting on January 13, 2021. The PPP will open to all participating lenders for Second Draw PPP Loans shortly thereafter.

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

PPP Second Draw Borrower Application Form (2.17.2021)

Upload the signed application as a PDF along with any additional required supporting documentation here: