Paycheck Protection Program Round 2
Supporting Small Business When It Matters Most
Paycheck Protection Program Round 2
USC Credit Union is no longer accepting applications for the US Small Business Administration (SBA) Paycheck Protection Program (PPP). If you have already have a PPP Loan with us, click here to log in to the SMARTLENDERS Portal to access forgiveness information.
For questions about the Paycheck Protection Program, view our Frequently Asked Questions below. For questions about the status of an in progress application, email us at PPPloans@usccreditunion.org.
On December 27, 2020, the Consolidated Appropriations Act (Act) was signed into law to provide financial relief to small businesses suffering from the impact of the COVID-19 pandemic. The Act amends the Paycheck Protection Program (PPP) that was established earlier this year under the CARES Act. As before, the PPP loans will be low-interest, forgivable loans for specified purposes, designed to encourage businesses to keep employees on the payroll during the pandemic.
Second draw PPP loan
Borrowers applying for a second draw PPP loan, including nonprofits, veterans’ organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors, must:
First draw PPP loan
All borrowers applying for a PPP loan need to meet the Small Business Administration’s (SBA) certification of need requirement, attesting that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”
Borrowers applying for their first PPP loan, including nonprofits, veterans’ organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors, must:
Second Draw PPP Loan
Generally, the maximum loan amount for PPP second draw borrowers is the lessor of:
For second draw borrowers assigned NAICS code 72 (Accommodation and Food Services industry, which includes hotels and restaurants) the maximum loan amount is the lessor of:
First Draw PPP Loan
Generally, the maximum loan amount for first-time borrowers is the lessor of:
The maximum loan amount applicable to farmers and ranchers who are sole proprietors, independent contractors, or self-employed individuals, is limited to the lessor of:
To calculate their maximum loan amount, borrowers must calculate their payroll costs for either calendar year 2019, calendar year 2020, or the 12-month period prior to the date the loan is made (whichever the borrower chooses), and multiply that amount by 2.5. The term “payroll costs” includes:
The term “payroll costs” does not include:
Eligible Payroll Costs
Eligible Non-Payroll Costs
A borrower must pick a “covered period” ending at any time between 8-weeks and 24-weeks after loan origination. Regardless of the covered period a borrower picks, each borrower must use the full amount of the PPP loan proceeds on eligible expenses during the selected covered period to be eligible for full loan forgiveness.
100 percent of the PPP loan is forgivable as long as these requirements are met:
While borrowers are still required to spend at least 60 percent of their PPP loan proceeds on eligible payroll costs to be eligible for full forgiveness, the recent update expands the permissible use of PPP loan proceeds to include the following:
The forgiven portion of a PPP loan can be excluded from gross income. Borrowers have 10 months from the end of their covered period to apply for forgiveness before they would need to start paying back any portion of their loan. Lenders have 60 days to decide on loan forgiveness.
The Act provides for a simplified loan forgiveness process for PPP loans of up to $150,000. Specifically, applicable borrowers will be eligible for loan forgiveness if the borrower signs and submits a one-page certification to the lender (a) describing the number of employees the borrower was able to retain because of the PPP loan, the estimated amount spent on eligible payroll costs and total PPP loan value and (b) attesting that it accurately provided the required certification and complied with applicable PPP requirements. The form of the above described certification is expected to be available by January 20, 2021.
Initially only community financial institutions will be able to make Second Draw PPP Loans on Wednesday, January 13, 2021. Borrowers have until March 31, 2021, to apply for a PPP loan.
The term for a PPP loan is 60 months.
No, but prior PPP loan funds must be fully utilized.
|Business Periods in 2019||2020 Quarter||2019 Reference Quarter|
|All quarters in 2019||Any quarter; Annually||Matching quarter in 2020; Annually|
|2nd, 3rd, and 4th Quarters||Any quarter; Annually||Matching quarter in 2020; Annually|
|3rd and 4th Quarters||Any quarter||3rd or 4th Quarters|
|4th Quarter||Any quarter||4th Quarter|
|Not in business in 2019||2nd, 3rd, or 4th Quarter||1st Quarter of 2020|
Borrowers may compare annual gross receipts in 2020 with annual gross receipts in 2019