Consolidated Appropriations Act, 2021 – Paycheck Protection Program
The Consolidated Appropriations Act, 2021, was signed into law on December 27, 2020. It enhances and expands certain provisions of the CARES Act and changes the Paycheck Protection Program (PPP) by authorizing additional liquidity for a second round of PPP loans and expanding PPP borrower eligibility in some instances. There are also changes that will impact both new and existing PPP borrowers including simplified forgiveness of loans $150,000 and less.
On January 6, 2021, the SBA issued two Interim Final Rules that address PPP loans both to first-time borrowers (First Draw PPP), as well as new PPP loans to businesses that previously received a PPP loan (Second Draw PPP). The program expires on March 31, 2021, unless funds are exhausted sooner.
UPDATE: The Credit Union has been advised that the Paycheck Protection Program funding for most financial institutions has been exhausted and that the SBA’s portal has stopped accepting applications for new PPP loans. As a result, the Credit Union’s loan application portal has been closed.
First-time Borrowers – (“First Draw PPP”)
- Qualifying small businesses with less than 500 employees that were in business as of February 15, 2020 are eligible to apply for assistance.
- Eligible businesses qualify for a loan up to 2.5 times your average monthly payroll costs for the prior year up to $10 million.
- Loan recipients will be eligible for loan forgiveness on all or a portion of the loan. Costs eligible for loan forgiveness include payroll, rent, covered mortgage interest, and utilities.
- The term of the loan will be five years, with a fixed interest rate of 1.0%.
- No collateral or personal guarantee will be required.
- The government guaranty for this loan will be 100%.
Second-time Borrowers – (“Second Draw PPP”)
- Businesses must show a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019.
- Businesses must have used or will use the full amount of their first PPP loan before they receive funding for the second loan.
- Qualifying small businesses with less than 300 employees are eligible to apply for assistance.
- Business are eligible for a Second Draw PPP loan of up to $2 million.
- Businesses can apply for a Second Draw PPP loan whether or not they have requested forgiveness for the First Draw PPP loan.
Delta Community Credit Union – Eligibility
Our support of the SBA First Draw PPP loans is limited to existing business members. To verify eligibility, please complete the attached form and send to Business.Lending@DeltaCommunityCU.com. Verification forms must be completed and sent by April 30, 2021 to be considered due to our application deadline of May 5, 2021. We appreciate your patience, as expected volume and capacity constraints may lead to longer than typical response times.
Our support of the SBA Second Draw PPP loans is limited to members that received their first PPP loan with Delta Community. You should have received email correspondence from Delta Community with next steps on January 19, 2021. In the event you did not receive an email, and you received your first PPP loan with Delta Community, please email us by April 30, 2021 at PaycheckProtectionProgram@DeltaCommunityCU.com.
It should be noted that we will not accept paper applications for either First Draw PPP or Second Draw PPP loans. Only eligible applications submitted through our online portal will be accepted.
Once the Credit Union begins processing PPP First Draw and PPP Second Draw loans, we will continue to review and verify completed applications for submission to the SBA until the funding cap is reached. Because there is not a pre-determined cut-off time for the SBA to discontinue the program, we cannot guarantee SBA approval for any application.
