The SBA is accepting Second Draw Paycheck Protection (PPP) loan applications beginning January 13 through select community bank lenders. ValueXpress will be processing Second Draw PPP loan applications immediately for clients through its participating community bank partner, Peoples Bank. 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 and worker protection costs related to COVID-19. Second Draw PPP loans have the same general terms as First Draw PPP loans, including 100% loan forgiveness.
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% of the proceeds are spent on payroll costs.
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, the maximum loan amount for a Second Draw PPP Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million. Hotels qualify for the 3.5x multiple.
To apply for a Second Draw PPP loan, please contact any of the following ValueXpress representatives: Mike Sneden (email@example.com; 212-883-6447), Gary Unkel (firstname.lastname@example.org; 212-883-6475) or Jim Brett (email@example.com; 212-883-6492).