SBA portal opens for first- and second-time borrowers
The SBA will begin to accept Second Draw PPP (PPP2) loan applications on Jan. 13, 2021.
Much like the program’s first iteration, the aid will be in the form of forgivable loans, but there are key changes on issues such as eligibility for second-time applicants and types of forgivable expenses. Please read our prior blog for a summary of the Interim Final Rules (IFR) issued last week offering clarification on the deadlines, eligibility requirements and application for PPP2 loans.
HOW TO APPLY
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program.
If you are a first-time borrower, you should consult with your local lender as to whether it will be participating in the program. If you will be a second draw borrower, to simplify the process, it’s recommended that your borrow from the same bank, using the same figures for the calculation of the loan amount, as then no payroll information will be needed to apply.
If you wish to begin preparing your application, you can download the following PPP borrower application forms to see the information that will be requested from you when you apply with a lender:
- PPP First Draw Borrower Application Form (revised 01-08-21)
- PPP Second Draw Borrower Application Form (01-08-21)
For CWA clients that qualify, we do recommend applying for these funds. There is no reason to wait on getting your information together and completing the application, however we do not feel the same sense of urgency as we did in the spring 2020 first round. We do not believe the SBA will run out of proceeds any time in the short term.
As mentioned above, if you received PPP disbursements in 2020, it is recommended you apply for round two with the same lender. This will streamline the application process as you will be able to apply with the same information as before. Many banks will not need any further information if using previously submitted 2019 information.
It is also important to be aware that although the SBA states that second draw applications will begin on Jan. 13, we anticipate that larger banks may not open this week. This should not be cause for concern.
For at least the first two days after the program reopens, only community lenders will be accepting applications. The SBA is starting with community lenders exclusively in an effort to ensure the program reaches minorities, women, veterans and underserved communities. Administration officials state that other lenders will be able to issue the loans soon after the program reopens but haven’t yet specified a date.
Lastly, banks may also be getting their portals updated and ready for the second round. You may want to contact your lender to get an estimated application start date.