Undersecretary of Works in Bahrain with primary focus on major infrastructure ,PPP/ affordable housing . [5] Due to limited time, research on public-private partnerships (PPP), i.e. This method will be particularly important for small borrowers that may not have quarterly revenue information readily available. to formulate solutions to problems. (Blue numbers next to the lines in the ' H NMR spectra indicate the integration values.) Paragraph 7(a)(36)(D)(iv) of the Small Business Act. 636(a)(36)). 9. This document has been published in the Federal Register. [9] This information collection (IC) consists of SBA Form 2483-SD (Paycheck Protection Program Second Draw Application Form) and SBA Form 2484-SD (Paycheck Protection Program Lender's ApplicationSecond Draw Loan Guaranty. The Economic Aid Act provides that, to be eligible for a Second Draw PPP Loan, the borrower must have experienced a revenue reduction of 25% or greater in 2020 relative to 2019. In addition to the technology platform, the SBA is standing up a PPP customer service team to answer questions and directly assist borrowers with their forgiveness applications. This article includes those changes as they affect Second Draw PPP Loans. The PPP reopened Jan. 11 with $284 billion in funding for forgivable loans. For loans of $150,000 or less, Applicant will provide documentation substantiating the decline in gross receipts upon or before seeking loan forgiveness for the Second Draw Paycheck Protection Program Loan or upon SBA request. As a result, if each hotel or restaurant location owned by a parent business is a separate legal business entity and employs not more than 500 employees, each hotel or restaurant location is permitted to apply for a separate PPP loan provided it uses its unique EIN. (ii) for a Second Draw PPP Loan of more than $50,000, in an amount that is: (A) 5 percent of the balance of the financing outstanding at the time of disbursement of the loan for a loan up to (and including) $350,000; and. Register documents. daily Federal Register on FederalRegister.gov will remain an unofficial (1) If a First Draw PPP Loan is under review pursuant to PPP rules and/or information in SBA's possession indicates that the borrower may have been ineligible for the First Draw PPP Loan it received or for the loan amount received by the borrower, the lender will receive notification from SBA when the lender submits an application for guaranty of a Second Draw PPP Loan (unresolved borrower). The intent of the Economic Aid Act is that SBA provide relief to America's small businesses expeditiously. The terms and conditions of the Second Draw PPP Loans are subject to the same terms and conditions as First Draw PPP Loans. [18] 636(a)(36) and (37)); and (B) attests that the applicant, eligible recipient, or eligible entity, as applicable, has accurately provided the certification or documentation to the lender in accordance with the statutory requirements, regulations, and guidance related to PPP loans. In addition, subsection (c)(1)(ii) of the IFR clarifies that the borrower must have spent the full amount of its First Draw PPP Loan on eligible expenses under the PPP rules to be eligible for a Second Draw PPP Loan. [13] The SBA will accept applications until March 31 or until funds run out, an outcome that is not expected at this time. Subsection (b) also confirms that SBA's Consolidated First Draw PPP IFR, Frequently Asked Questions (FAQs), and other guidance about PPP loans under section 7(a)(36) of the Small Business Act (15 U.S.C. The PPP is now a $284 billion refundable loan offering aimed at struggling small businesses. Tick your Download Entire Update checkbox. (4) if the applicant was not in business during 2019, but was in operation on February 15, 2020, the applicant had gross receipts during the second, third, or fourth quarter of 2020 that demonstrate at least a 25 percent reduction from the gross receipts of the entity during the first quarter of 2020 (for example, an applicant that had gross receipts of $50,000 in the first quarter of 2020 and had gross receipts of $30,000 in the fourth quarter of 2020demonstrating a reduction of 40 percent from the applicant's gross receipts during the first quarter in 2020). Follow the instructions for submitting comments. Like First Draw PPP Loans, Second Draw PPP Loans are intended to provide expeditious relief to America's small Start Printed Page 3713businesses. (f) What is the maximum loan amount for a Second Draw PPP Loan? A borrower that has temporarily closed or temporarily suspended its business remains eligible for a Second Draw PPP Loan. (The revenue reduction requirement is addressed in subsection (c)(1)(iv) of this IFR.) Borrowers calculate their average monthly payroll in either 2019, 2020 or their trailing 12 months. A representative of the applicant can certify for the business as a whole if the representative is legally authorized to do so. The rules applicable to Second Draw PPP Loans are published in section IV of this IFR. 29. The last day to apply for and receive a PPP loan is March 31, 2021. 7. This is because the SBA is prioritizing the disbursement of second draw loans. subsections B.1.g.v., B.1.g.vii., and B.1.g.viii. These markup elements allow the user to see how the document follows the The Administrator, in consultation with the Secretary of the Treasury (Secretary), has determined that this is necessary to improve administrability of Second Draw PPP Loans by providing borrowers an additional verifiable method for substantiating their revenue reduction. Play was stopped at the World Championship after a protester vandalised table one and a second person tried to attach themselves to table two. A lender must make disbursement of the loan within ten calendar days of loan approval. All other items, such as subcontractor costs, reimbursements for purchases a contractor makes at a customer's request, investment income, and employee-based costs such as payroll taxes, may not be excluded from gross receipts. Per the SBA's Jan. 14, 2021, Interim Final Ruling (IFR) Protection Program (PPP) Second Draw Loans, if a first draw PPP loan has an unresolved issue, which may be due to hold codes or compliance . 397(11))), has a trade or business that falls under such a code; and (2) makes a good faith certification that proceeds of the loan will be used to support expenses at the component of the organization that produces or distributes locally focused or emergency information. In this Issue, Documents In addition, the SBA has addressed some issues in their guidance. The Economic Aid Act includes terms and conditions, including but not limited to terms relating to eligibility and a borrower's maximum loan amount, that apply only to Second Draw PPP Loans and do not apply to First Draw PPP Loans, regardless of when the First Draw PPP Loan is made. Learn more here. by the Internal Revenue Service publication in the future. The Regulatory Flexibility Act (RFA) generally requires that when an agency issues a proposed rule, or a final rule pursuant to section 553(b) of the APA or another law, the agency must prepare a regulatory flexibility analysis that meets the requirements of the RFA and publish such analysis in the Federal Register. An updated PPP application form has been issued by the SBA, together with an application for the new Second Draw Loan program. are not part of the published document itself. must make the certifications listed in subsection (B)(12) of the Consolidated First Draw PPP IFR, except: (i) Instead of the certification in subsection (B)(12)(v) of the Consolidated First Draw PPP IFR, the applicant must certify that the applicant has not and will not receive another Second Draw Paycheck Protection Program Loan; and. 04/17/2023, 209 For loans with a principal amount greater than $150,000, the applicant must also submit documentation adequate to establish that the applicant experienced a revenue reduction of 25% or greater in 2020 relative to 2019. (1) In general, the maximum loan amount for a Second Draw PPP Loan is equal to the lesser of two and half months of the borrower's average monthly payroll costs or $2 million, except as otherwise specified in this subsection (e). A business concern or entity primarily engaged in political activities or lobbying activities, including any entity that is organized for research or for engaging in advocacy in areas such as public policy or political strategy or that describes itself as a think tank in any public documents; certain entities organized under the laws of the People's Republic of China or the Special Administrative Region of Hong Kong, or with other specified ties to the People's Republic of China or the Special Administrative Region of Hong Kong; any person required to submit a registration statement under section 2 of the Foreign Agents Registration Act of 1938 (. The Administrator, in consultation with the Secretary, has determined that these procedures strike an appropriate balance between promoting program integrity and preventing abuse, while making Second Draw PPP Loans available to all eligible borrowers as expeditiously as possible. (iii) No personal guarantees will be required. [28] (2) At the time an applicant submits its loan application form, it must submit the following unless the documentation was submitted to the lender for the First Draw PPP Loan (i.e., the applicant used calendar year 2019 figures to determine both its First Draw PPP Loan amount and its Second Draw PPP Loan amount, and the lender for the applicant's Second Draw PPP Loan is the same as the lender that made the applicant's First Draw PPP Loan): (i) If the applicant is not self-employed, the applicant's Form 941 (or other tax forms containing similar information) and state quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever was used to calculate payroll), as applicable, or equivalent payroll processor records, along with evidence of any retirement and employee group health, life, disability, vision and dental insurance contributions, must be provided. Information about this document as published in the Federal Register. without regard for whether such a station is a concern as defined in 13 CFR 121.105, or any successor thereto) that employs not more than 500 employees, or the size standard established by the Administrator for the NAICS code applicable to the business concern, per physical location of such business concern and is majority owned or controlled by a business concern that is assigned a NAICS code beginning with 511110 or 5151; or (b) any nonprofit organization that is assigned a NAICS code beginning with 5151. Second Draw PPP Loan borrowers who are not self-employed, sole proprietorships, or independent contractors are also permitted to use the precise 1-year period before the date on which the loan is made to calculate payroll costs if they choose not to use 2019 or 2020. All loans will be processed by all lenders under delegated authority and lenders will be permitted to rely on certifications of the borrower to determine the borrower's eligibility and use of loan proceeds. Furthermore, the SBA has issued guidance on first draw PPP loans and on the Second Draw Loans . Per the SBA's Jan. 14, 2021 Interim Final Ruling (IFR) Protection Program (PPP) Second Draw Loans, if a first draw PPP loan has an unresolved issue, which may be due to hold codes or compliance . Borrowers with an assigned NAICS code of 72 are allowed 3.5 times their average monthly payroll (but still have a cap of $2,000,000). These include, but are not limited to the following terms: The guarantee percentage is 100 percent. These subsections also provide that, for a borrower with a NAICS code beginning with 72 that would fall into more than one category listed in subsection (f) (for example, a business with a NAICS code beginning with 72 that is also a seasonal business or is also a new entity without 12 months of payroll costs), the borrower may calculate its average monthly payroll costs based on the methodology that applies to the entity but may use the 3.5 multiplier Start Printed Page 3716applicable to businesses with a NAICS code beginning with 72. Paragraph 7(a)(37)(A)(iv)(III)(ee) of the Small Business Act. See generally section (B)(2) of the Consolidated First Draw PPP IFR. 10. (j) Are Second Draw PPP Loans eligible for loan forgiveness? For second draw loans, the bill appears to exclude from eligibility borrowers that previously qualified as a "small business concern" under the "alternative size standard" or the borrower's. Questions on the Paycheck Protection Program 7(a) Loans (First Draw PPP Loans and Second Draw PPP Loans) may be directed to the Lender Relations Specialist in the local SBA Field Office. Highlight the information that you consider to be CBI and explain why you believe SBA should hold this information as confidential. documents in the last year, 655 ). Like means that borrowers receiving PPP loans in the initial tranched for early- to mid-April 2020 leave got due dates beginning in July 2021. Unlike First Draw PPP Loans, the Economic Aid Act provides that the relevant time period for calculating a borrower's payroll costs for a Second Draw PPP Loan is either the twelve-month period prior to when the loan is made or calendar year 2019. A borrower must calculate this revenue reduction by comparing the borrower's quarterly gross receipts for one quarter in 2020 with the borrower's gross receipts for the corresponding quarter of 2019. These tools are designed to help you understand the official document Despite earlier moves to streamline . Paragraph 7(a)(37)(D) of the Small Business Act. Effective Date: This interim final rule is effective January 12, 2021. For loans greater than $150,000, Applicant has provided documentation to the lender substantiating the decline in gross receipts. About the Federal Register The Economic Aid Act also prohibits several additional categories of borrowers from receiving a Second Draw PPP Loan under section 7(a)(37) of the Small Business Act. Paragraph 7(a)(37)(C)(iv) of the Small Business Act. Section 342 of the Economic Aid Act. (iv) The amount of any forgiven First Draw PPP Loan shall not be included toward any borrower's gross receipts. Under the CARES Act, any single business entity that is assigned a NAICS code beginning with 72 (including hotels and restaurants) and employs not more than 500 employees per physical location is eligible to receive a First Draw PPP Loan. 11. This IFR also specifies that, in calculating a farmer's or rancher's maximum loan amount, any employee payroll costs should be subtracted from the farmer's or rancher's gross income to avoid double-counting amounts that represent pay to the employees of the farmer or rancher. documents in the last year, 29 The requirement to conduct a regulatory impact analysis does not apply if the head of the agency certifies that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities. 5 U.S.C. Congress designated $137 billion for PPP second draw loans as part of a larger funding and relief package. [32] 636) in section 304(b) of the Economic Aid Act. [20] The interest rate will be 100 basis points or one percent, calculated on a non-compounding, non-adjustable basis. (ii) For a borrower that has income from self-employment and has employees, the maximum loan amount is the lesser of: (1) The sum of (i) the net profit of the borrower in 2019 or 2020 (at the election of the borrower), as reported on IRS Form 1040 Schedule C, that is not more than $100,000, divided by 12; (ii) the average total monthly payment for employee payroll costs incurred or paid by the borrower during the same year elected by the borrower; by, (2) 2.5 (or, only for a borrower assigned a NAICS code beginning with 72 at the time of disbursement as defined in subsection (f)(10), 3.5); or. on Procedures for Addressing Unresolved Issues on Borrower First Draw PPP Loans CONTROL NO. As was the case with the original PPP, actual loan amounts will be based on an applicant's payroll. In addition, this rule is being issued to allow for immediate implementation of this program. 20. As described in SBA's interim final rule on SBA Loan Review Procedures and Related Borrower and Lender Responsibilities, SBA may review any PPP loan, as the Administrator deems appropriate. Only official editions of the (g) How do I submit an application for a Second Draw PPP Loan and what documentation must I provide to demonstrate eligibility? Subsection (i) of the IFR establishes procedures relating to the handling of a Second Draw PPP Loan application by a borrower whose First Draw PPP Loan is under review by SBA (unresolved borrower). 3. Under section 801(3) of the CRA, a major rule takes effect 60 days after the rule is published in the Federal Register. documents in the last year, 296 4. Accordingly, a single business entity that is assigned a NAICS code beginning with 72 is eligible to receive a Second Draw PPP Loan if it employs no more than 300 employees per physical location and meets the revenue reduction requirements and otherwise satisfies the eligibility criteria described in this IFR. 25. Authority: 27. 2. Eligible employers can claim a tax credit equal to 50% of qualifying wages (defined as wages plus the cost of employer-provided healthcare up to $10,000 per employee) paid between March 13, 2020, and December 31, 2020. The $284 billion includes funding for businesses that already received a PPP loan under the Coronavirus Aid, Relief and Economic Security (CARES) Act (referred to as "second draw loans") and . on and all PPP loan program requirements, except as specified in this IFR. However, it did not specify how payroll costs should be calculated for Second Draw PPP Loans to farmers and ranchers. (ii) Gross receipts of affiliates are calculated as follows: (A) Gross receipts of a borrower with affiliates is calculated by adding the gross receipts of the business concern with the gross receipts of each affiliate. The loan amounts received by borrowers for First Draw PPP Loans and Second Draw PPP Loans will not be aggregated. A Rule by the Small Business Administration on 01/14/2021. First-time borrowers (including newly eligible borrowers) can once again apply under the first-round program. However, if a concern acquired a segregable division of another business concern during 2020, gross receipts do not include the receipts of the acquired division prior to the acquisition. Relative to First Draw PPP loans, the Economic Aid Act adjusted the methodology for calculating a borrower's payroll costs. At the same time, these procedures do not disqualify an eligible unresolved borrower from receiving a Second Draw PPP Loan, in recognition that many flags will be resolved in the borrower's favor. Section 1106 of the CARES Act (15 U.S.C. Subsection (c)(1)(iv)(A) of the IFR reflects this methodology. This IFR clarifies that the same general calculation for farmers and ranchers applicable to First Draw PPP Loans applies to Second Draw PPP Loans, with adjustments that (i) eliminate the provision for refinancing of an Economic Injury Disaster Loan (EIDL), which does not apply to Second Draw PPP Loans, and (ii) apply the choice of time period for calculating a farmer's or rancher's payroll costs for Second Draw PPP Loans, consistent with other Second Draw PPP Loans. Therefore, SBA has determined that this rule has no federalism implications warranting preparation of a federalism assessment. (2) If the lender receives notification that the Applicant for a Second Draw PPP Loan is an unresolved borrower, the lender will not receive an SBA loan number. documents in the last year, 124 All terms in this subsection have the same definitions as in sections 7(a)(36) and (37) of the Small Business Act and the Consolidated First Draw PPP IFR, as applicable. 301 et seq. The Administrator, in consultation with the Secretary, has determined that this methodology is necessary to provide small businesses in the accommodation and food services sector the full amount of relief provided in the Economic Aid Act while allowing these borrowers to calculate their average monthly payroll costs accurately. Subsection (j) contains forgiveness provisions specific to Second Draw PPP loans. the official SGML-based PDF version on govinfo.gov, those relying on it for If a borrower's First Draw PPP loan is under review by SBA and/or information in SBA's possession indicates that the borrower may have been ineligible for the First Start Printed Page 3717Draw PPP Loan it received or for the loan amount it received, the lender will receive notification from SBA when the lender submits an application for a guaranty of a Second Draw PPP Loan and will not receive an SBA loan number until the issue related to the unresolved borrower's First Draw PPP Loan is resolved. For those careful and cautious borrowers grappling with the meaning of the necessity certification in the context of PPP2 loans, this guidance provides welcomed clarity. 22. 01/12/2021 at 4:15 pm. New Documents This interim final rule is being issued without advance notice and public comment because section 303 of the Economic Aid Act authorizes SBA to issue regulations to implement the Economic Aid Act without regard to notice requirements. Software Development. (3) The maximum amount of a Second Draw PPP Loan to a borrower that is a seasonal employer (meaning an employer that does not operate for more than 7 months in any calendar year or that during the preceding calendar year, had gross receipts for any 6 months of that year that were not more than 33.33 percent of the gross receipts of the employer for the other 6 months of that year) is calculated as the lesser of: (A) At the election of the borrower, the average total monthly payments for payroll costs incurred or paid by the borrower for any 12-week period between February 15, 2019 and February 15, 2020; by, (B) 2.5 (or, only for a borrower assigned a NAICS code beginning with 72 at the time of disbursement as defined in subsection (f)(10), 3.5); or. (ii) If the applicant is self-employed and has employees, the applicant's 2019 or 2020 (whichever was used to calculate loan amount) IRS Form 1040 Schedule C, Form 941 (or other tax forms or equivalent payroll processor records containing similar information) and state quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever was used to calculate loan amount), as applicable, or equivalent payroll processor records, along with evidence of any retirement and employee group health, life, disability, vision and dental insurance contributions, if applicable, must be provided. better and aid in comparing the online edition to the print edition. On December 27, 2020, President Trump signed the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the Economic Aid Act) (Pub. Each document posted on the site includes a link to the documents in the last year, 82 (B) If a borrower has acquired an affiliate or been acquired as an affiliate during 2020, gross receipts includes the receipts of the acquired or acquiring concern. SBA will resolve issues related to unresolved borrowers expeditiously. (1) A lender approved to make First Draw PPP Loans may make Second Draw PPP Loans under the same terms and conditions applicable to First Draw PPP Loans, including all requirements under sections (C) and (D) of the Consolidated First Draw PPP IFR, except as otherwise provided in this section. SBA also adopted a religious exemption to the affiliation rules by regulation,[19] SBA will review the information and make the final determination whether it will publish the information. Document page views are updated periodically throughout the day and are cumulative counts for this document. From Jan. 11 through Jan. 24, SBA approved more than 400,000 loans for $35 billion, according to an agency report. 631 et seq. A payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish the applicant was in operation on February 15, 2020. Moreover, this approach is appropriate because, if annual filings show a 25 percent revenue reduction, then at least one quarter in 2020 would have had at least a 25 percent revenue reduction. Owner of The Law Office of Ren P. Moniz 2y 13. The documents posted on this site are XML renditions of published Federal The Economic Aid Act generally provides that a borrower is eligible for a Second Draw PPP Loan only if it has 300 or fewer employees and experienced a revenue reduction in 2020 relative to 2019 (described further below). At Womply, a. SBA will post all comments on www.regulations.gov. Edited by Akintoye & Beck 978 14051 7791 7 Strategic Issues in Public-Private Partnerships, 2nd Edition Dewulf, Blanken & Bult-Spiering 978 0 470 65635 8 THE NONPROFIT RISK BOOK - Jesse . SBA will resolve the issue related to the unresolved borrower expeditiously and will notify the lender of the process to obtain an SBA loan number for the Second Draw PPP Loan, if appropriate. Under section 7(a)(37) of the Small Business Act (15 U.S.C. This article summarizes which businesses are not eligible for First Draw PPP Loans and Second Draw PPP Loans. edition of the Federal Register. which applies to Second Draw PPP loans. No collateral will be required. Finally, subsection (f)(9) provides that businesses that are part of a single corporate group shall in no event receive more than $4,000,000 of Second Draw PPP Loans in the aggregate. The second draw loan program, which closes March 31, 2021, contains stricter eligibility requirements and a lower loan limit, but it retains many of the original terms and conditions of the PPP program. [7] documents in the last year, by the Centers for Medicare & Medicaid Services 17. Both First Draw PPP Loans and Second Draw PPP Loans can be used to help fund an expanded list of forgivable expenses, including payroll costs, rent, and utilities, as well as uninsured property damage costs caused by looting or vandalism, certain supplier costs, worker protection expenditures related to COVID-19, and certain operations This summary provides additional information and explains the key terms in the IFR. has no substantive legal effect. The Administrator, in consultation with the Secretary, determined that limiting the amount of Second Draw PPP Loans that a single corporate group may receive will promote the availability of PPP loans to the largest possible number of borrowers, consistent with the CARES and Economic Aid Act.