The US Small Enterprise Administration and Treasury launched borrower mortgage software kinds Friday evening for the rebooted Paycheck Safety Program (PPP), which will launch Monday, initially for choose lenders and debtors earlier than a broader opening takes place just a few days later
The kinds are Form 2483 – Paycheck Protection Program Borrower Application Form and Form 2483-SD – PPP Second Draw Borrower Application Form. Kind 2483 is up to date from earlier iterations that began with the unique PPP program. Kind 2483-SD is a brand new kind for certified PPP debtors to hunt a second draw of a forgivable mortgage as they attempt to navigate financial seas churning within the throes of the COVID-19 pandemic.
The SBA and Treasury additionally printed top-line summaries of the first-draw and second-draw PPP loans and a pair of procedural notices.
The doc launch got here after the SBA and Treasury introduced earlier Friday that the appliance window for $284 billion in PPP forgivable loans would reopen Monday initially for group monetary establishments (CFIs) that serve minority- and women-owned companies to make loans. Particularly, CFIs can start making loans to first-time PPP debtors on Monday and second-time PPP debtors on Wednesday.
The SBA and Treasury stated the PPP would open to all lenders just a few days after the opening for CFIs, however they didn’t specify a date.
Congress revived the PPP as a part of the $900 billion COVID-19 relief bill that was signed into regulation on Dec. 27. The unique PPP offered $525 billion in forgivable loans over 5 months earlier than it stopped accepting purposes in August. The brand new PPP has $284.5 billion out there, together with $35 billion for first-time loans and $15 billion put aside for group monetary establishments.
The SBA and Treasury issued guidance late Wednesday evening for the brand new PPP, which shares most of the similar guidelines because the previous PPP but additionally has some important variations. The steerage got here within the type of three paperwork:
- An 82-page interim final rule (IFR) referred to as “Enterprise Mortgage Program Short-term Modifications; Paycheck Safety Program as Amended by Financial Support Act,” which consolidates eight months of guidelines launched for PPP forgivable loans for first-time debtors and incorporates modifications made by the Financial Support to Arduous-Hit Small Companies, Nonprofits, and Venues Act, P.L. 116-260.
- A 42-page IFR referred to as “Enterprise Mortgage Program Short-term Modifications; Paycheck Safety Program Second Draw Loans,” which establishes pointers for brand spanking new PPP loans to companies that beforehand acquired a PPP mortgage.
- A three-page document referred to as “Steering on Accessing Capital for Minority, Underserved, Veteran and Girls-Owned Enterprise Considerations,” which features a dedication from the SBA to make a minimum of the primary two days of the PPP software window open solely to purposes from group monetary establishments.
Fast overview of PPP borrower software kinds
The PPP borrower software kinds launched Friday include directions on the right way to calculate payroll prices according to the steerage offered on Wednesday. Normally, first- and second-time PPP debtors might obtain a mortgage quantity of as much as 2.5 instances their common month-to-month payroll prices (with a cap per worker of $100,000 annualized) in 2019, 2020, or the 12 months previous to the mortgage. PPP debtors with North American Business Classification System (NAICS) codes beginning with 72 (reminiscent of inns and eating places) can obtain as much as 3.5 instances their common month-to-month payroll prices on second-draw loans.
The kinds additionally define changes to the calculations for seasonal companies, new companies, farmers and ranchers, and partnerships.
The utmost mortgage quantity is $10 million for first-time debtors and $2 million for second-time PPP debtors.
PPP debtors can have their first- and second-draw loans forgiven if the funds are used on the next eligible prices: payroll, lease, lined mortgage curiosity, and utilities, lined employee safety and facility modification expenditures, lined property harm prices, lined funds to suppliers and funds for enterprise software program or cloud computing providers that facilitate enterprise operations, services or products supply, and numerous back-office features, together with accounting.
To be eligible for full mortgage forgiveness, PPP debtors should spend a minimum of 60% of the funds on payroll over a lined interval of their selection between eight and 24 weeks.
First time PPP loans can be found to debtors that have been in operations on Feb. 15, 2020 and are from one of many following teams:
- Companies with 500 or fewer workers which are eligible for different SBA 7(a) loans.
- Sole proprietors, unbiased contractors, and eligible self-employed people.
- Not-for-profits, together with church buildings.
- Lodging and meals providers operations with NAICS codes beginning with 72 which have fewer than 500 workers per bodily location.
- Sec. 501(c)(6) enterprise leagues, reminiscent of chambers of commerce, guests’ bureaus, and so forth., and “vacation spot advertising and marketing organizations” which have 300 or fewer workers and don’t obtain greater than 15% of receipts from lobbying. The lobbying actions should comprise not more than 15% of the group’s whole actions and have value not more than $1 million throughout the newest tax 12 months that ended previous to Feb. 15. 2020. Sports activities leagues will not be eligible.
- Information organizations which are majority-owned or managed by an NAICS code 511110 or 5151 enterprise or not-for-profit public broadcasting entities with a commerce or enterprise beneath NAICS code 511110 or 5151. The scale restrict for this class is not more than 500 workers per location.
Debtors are eligible for a second-draw PPP mortgage of as much as $2 million, offered they’ve:
- 300 or fewer workers.
- Used or will use the complete quantity of their first PPP mortgage on or earlier than the anticipated date for the second PPP mortgage to be disbursed to the borrower. The IFR additionally clarifies that the borrower should have spent the complete quantity of the primary PPP mortgage on eligible bills.
- Skilled a income discount of 25% or extra in all or a part of 2020 in contrast with all or a part of 2019. That is calculated by evaluating gross receipts in any 2020 quarter with an relevant quarter in 2019, or, in a provision added within the IFR, a borrower that was in operation for all 4 quarters of 2019 can submit copies of its annual tax kinds that present a discount in annual receipts of 25% or larger in 2020 in contrast with 2019.
AICPA consultants talk about the most recent on the PPP and different small enterprise assist applications throughout a biweekly digital city corridor. The webcasts, which offer CPE credit score, are free to AICPA members. Go to the AICPA Town Hall Series webpage for extra info and to register.
The AICPA’s Paycheck Protection Program Resources page homes assets and instruments produced by the AICPA to assist handle the financial influence of the coronavirus.
For extra information and reporting on the coronavirus and the way CPAs can deal with challenges associated to the outbreak, go to the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP information.
— Jeff Drew ([email protected]) is a JofA senior editor.