(C) was in business as of February 15, 2020; is calculated according to (ii) or (iii) of this subsection(e)(6), depending on whether the borrower has employees. This IFR also specifies that, in calculating a farmer's or rancher's maximum loan amount, any employee payroll costs should be subtracted from the farmer's or rancher's gross income to avoid double-counting amounts that represent pay to the employees of the farmer or rancher. If the lender identifies errors in the borrower's calculation or a material lack of substantiation in the borrower's supporting documents, the lender should work with the borrower to remedy the issue. Gross receipts do not include the following: Taxes collected for and remitted to a taxing authority if included in gross or total income (such as sales or other taxes collected from customers and excluding taxes levied on the concern or its employees); proceeds from transactions between a concern and its domestic or foreign affiliates; and amounts collected for another by a travel agent, real estate agent, advertising agent, conference management service provider, freight forwarder or customs broker. 636(a)(37)), SBA is authorized to guarantee Paycheck Protection Program Second Draw Loans (Second Draw PPP Loans). Subsection (e)(1) ensures that a borrower that received a First Draw PPP Loan despite being ineligible to receive the loan is not eligible to receive a Second Draw PPP Loan. on FederalRegister.gov Such documentation may include relevant tax forms, including annual tax forms, or, if relevant tax forms are not available, a copy of the applicant's quarterly income statements or bank statements. Payroll costs has the same meaning as in subsections (B)(4)(g) and (B)(4)(h) of the Consolidated First Draw PPP IFR and is calculated in the same manner. See generally section (B)(2) of the Consolidated First Draw PPP IFR. Subsections (f)(7) and (f)(8) of the IFR include tailored calculation methodologies for self-employed individuals and partnerships. Highlight the information that you consider to be CBI and explain why you believe SBA should hold this information as confidential. and all PPP loan program requirements, except as specified in this IFR. : 5000-20083 EFFECTIVE . At Womply, a. Moreover, this approach is appropriate because, if annual filings show a 25 percent revenue reduction, then at least one quarter in 2020 would have had at least a 25 percent revenue reduction. Second Draw PPP Loans are eligible for loan forgiveness on the same terms and conditions as First Draw PPP Loans, except that Second Draw PPP Loan borrowers with a principal amount of $150,000 or less are required to provide documentation of revenue reduction if such documentation was not provided at the time of the loan application as specified in subsections (g)(2)(iv) and (v) of this section. (A) Operates as a sole proprietorship or as an independent contractor, or is an eligible self-employed individual; (B) reports farm income or expenses on a Schedule F (IRS Form 1040); and. For second draw loans, the bill appears to exclude from eligibility borrowers that previously qualified as a "small business concern" under the "alternative size standard" or the borrower's NAICS Code. This clarification ensures the effectiveness of the second draw loan program by ensuring that a borrower is not disqualified from receiving a Second Draw PPP Loan because it received forgiveness on a First Draw PPP Loan. 19. If you are using public inspection listings for legal research, you (4) if the applicant was not in business during 2019, but was in operation on February 15, 2020, the applicant had gross receipts during the second, third, or fourth quarter of 2020 that demonstrate at least a 25 percent reduction from the gross receipts of the entity during the first quarter of 2020 (for example, an applicant that had gross receipts of $50,000 in the first quarter of 2020 and had gross receipts of $30,000 in the fourth quarter of 2020demonstrating a reduction of 40 percent from the applicant's gross receipts during the first quarter in 2020). However, SBA noted that "lenders that submitted a Second Draw PPP Loan guarantee application before January 27, 2021, that was rejected due to an unresolved issue with the first draw PPP Loan, should resubmit these applications." SBA also issued procedural notices related to various provisions of the most recent COVID-19 relief law. Economic Aid Act Provides Second Draw PPP Loans, Jan. 15, 2021 SBA to Require PPP Borrowers of $2 Million-Plus to Complete Loan Necessity Questionnaires, November 24, 2020 SBA Issues Much-Anticipated Guidance Regarding Changes of Ownership in PPP Loans, October 8, 2020 (Forgiveness not required to apply.) Section 322 of the Economic Aid Act. Similarly, local municipalities throughout the country will have to deal with revenue loss created by COVID-19. Handbook on Battery Energy Storage System - Asian Development Bank 2018-12-01 . Eligible employers can claim a tax credit equal to 50% of qualifying wages (defined as wages plus the cost of employer-provided healthcare up to $10,000 per employee) paid between March 13, 2020, and December 31, 2020. See section (B)(3)(c) of the Consolidated First Draw PPP IFR. 6. Certain 2020 first draw PPP loans were flagged with hold codes after SBA review. If you are applying for a second draw PPP loan, you need to make sure each number and name matches the first draw loan application exactly. Since most borrowers will use 2019 or 2020 the rule text refers only to 2019 or 2020 for simplicity and readability. By Matthew Rambaran, Manager CLA T. 267.419.1145 Email. Consistent with the Economic Aid Act, subsections (f)(3) and (f)(4) of the IFR include tailored calculation methodologies for seasonal businesses, new entities that did not exist for the full twelve-month period preceding the Second Draw PPP Loan, and borrowers assigned a NAICS code beginning with 72 at the time of disbursement. Generally, receipts are considered total income (or in the case of a sole proprietorship, independent contractor, or self-employed individual gross income) plus cost of goods sold, and excludes net capital gains or losses as these terms are defined and reported on IRS tax return forms. If you have an unresolved issue on your first draw PPP loan, move quickly to identify the additional documents requested and supply them to your lender. Subsection (c)(2) also adapts the methodology for calculating affiliate receipts from 13 CFR 121.104. 20. and services, go to The Small Business Administration ("SBA") and the Department of the Treasury have begun releasing guidance for the reopened Paycheck Protection Program ("PPP") for "First Draw" PPP loans and for the new "Second Draw" PPP loans, both provided for under the recently enacted COVID 19 relief package (the "Act").This alert summarizes the SBA's top-line overview of the First and . These credits are available to employers (except state and local governments and their instrumentalities and small business who . Paragraph 7(a)(37)(K) of the Small Business Act, added by the Economic Aid Act, states that a lender approved to make First Draw PPP loans may make Second Draw PPP Loans under the same terms and conditions as new First Draw PPP Loans. However, we lack data to estimate the effects of this rule. In general, the Economic Aid Act made the eligibility requirements for Second Draw PPP Loans narrower than the eligibility requirements for First Draw PPP Loans. Owner of The Law Office of Ren P. Moniz 2y This method will be particularly important for small borrowers that may not have quarterly revenue information readily available. All Second Draw PPP Loans will have the same terms regardless of lender or borrower. Additional resources pertaining to the Economic Aid Act and PPP - including application forms, Lender guidance, and PPP program rules - can be found on . Rene Moniz, Esq.'s Post Rene Moniz, Esq. 681); and (4)(a) any business concern (including any station which broadcasts pursuant to a license granted by the Federal Communications Commission under title III of the Communications Act of 1934 (47 U.S.C. Despite earlier moves to streamline . On January 6, 2020, the SBA published its 26 th Interim Final Rule (the First Draw PPP IFR) and 27 th Interim Final Rule (the Second Draw PPP IFR) with respect to the Paycheck Protection Program (PPP), as reauthorized and modified under Title III (cited as the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the Economic Aid Act)) of Division N of the Consolidated . rendition of the daily Federal Register on FederalRegister.gov does not The guidance, however, does not clarify what is intended by "receive a . (4) Any business concern, or any station which broadcasts pursuant to a license granted by the Federal Communications Commission under title III of the Communications Act of 1934 (47 U.S.C. This repetition of headings to form internal navigation links of the consolidated interim final rule implementing . These tools are designed to help you understand the official document An applicant is not eligible for a Second Draw PPP Loan, even if it meets the eligibility requirements of subsection (c) of this section, if the applicant is: (1) Excluded from eligibility under the Consolidated First Draw PPP IFR;[35]. The loan proceeds may be used to cover payroll costs, rent, interest, and utilities. 11. are not part of the published document itself. If a borrower has not submitted new payroll documentation with its Second Draw PPP Loan application because it previously submitted 2019 payroll information to the same lender when it applied for its First Draw PPP Loan, then the lender must confirm the borrower's average monthly payroll costs based on that prior documentation. Document Drafting Handbook Given the number of applicants that got shut out when the program. With an additional $284 billion allocated to the PPP, the Small Business Administration has released initial guidance related to first draw and second draw PPP loans. headings within the legal text of Federal Register documents. Play was stopped at the World Championship after a protester vandalised table one and a second person tried to attach themselves to table two. For an eligible nonprofit organization, a veterans organization, an eligible nonprofit news organization, eligible 501(c) organization, or eligible destination marketing organization, gross receipts has the meaning in section 6033 of the Internal Revenue Code of 1986. 04/17/2023, 35 Small Business Administration's Office of Advocacy guide: How to Comply with the Regulatory Flexibility Ac. Subsection (c)(1)(iv)(A) of the IFR reflects this methodology. subsections B.1.g.v., B.1.g.vii., and B.1.g.viii. As was the case with the original PPP, actual loan amounts will be based on an applicant's payroll. Paragraph 7(a)(36)(D)(iii)(I) of the Small Business Act. For second draw loans, the bill appears to exclude from eligibility borrowers that previously qualified as a "small business concern" under the "alternative size standard" or the borrower's. Accordingly, a single business entity that is assigned a NAICS code beginning with 72 is eligible to receive a Second Draw PPP Loan if it employs no more than 300 employees per physical location and meets the revenue reduction requirements and otherwise satisfies the eligibility criteria described in this IFR. Subsection (g) of this IFR includes the application and documentation requirements for Second Draw PPP Loans. This provision will allow a borrower to provide annual tax return forms to substantiate its revenue reduction. By Matthew Rambaran, Manager CLA T. 267.419.1145 Email was the case with the original PPP, actual loan will... Certain 2020 First Draw PPP IFR employers ( except state and local and... 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