On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the Economic Aid Act) was signed into law. The Act authorizes the SBA to guarantee PPP Second Draw Loans, under generally the same terms and conditions available for the original first draw PPP loans established by the CARES Act.
What You Need To Know:
- A borrower is eligible for a Second Draw PPP Loan if it has 300 or fewer employees and experienced a revenue reduction in 2020 relative to 2019.
- The borrower must have experienced a revenue reduction of 25% or greater in 2020 relative to 2019. If you received CARES grants, including the provider grant, this may be a barrier.
- Second draw loans are forgiven if the loan proceeds are spent on eligible payroll costs and eligible non-payroll costs in the covered period.
- Community financial institutions and credit unions will begin to make second draw loans on Wednesday, January 13. Many are creating internal priority list. If you are interested, contact your bank ASAP.
- Having a previously established relationship with a bank is an important factor for success. Or consider Mofi (https://www.mofi.org ). MoFi is a Community Development Finance Institution that provides financing and consulting that transform lives and communities