SBA renews Paycheck Protection Program
The Small Business Administration (SBA) has renewed its Paycheck Protection Program (PPP) by authorizing up to $284 billion to help small businesses keep their workers on payroll during the pandemic as well as cover other expenses. The renewed program also allows some borrowers to apply for a second PPP Loan.
AgCredit is now accepting loan applications through March 31, or until government funding is exhausted, for two types of loans:
First-draw loans
Available to first-time borrowers. First-draw loans can be used to cover payroll costs, including benefits. Funds can also be used to pay mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and some supplier costs and expenses for operations.
The SBA has provided this guidance on how to calculate the maximum loan amount for first-draw loans and the necessary documentation to provide by business type.
Second-draw loans
Available to eligible borrowers who previously received a PPP loan. Second-draw loans can be used to cover payroll costs, including benefits. Funds can also be used to pay mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and some supplier costs and expenses for operations.
Borrowers are generally eligible for second-draw loans if they:
- Previously received a first-draw loan and has used or plans to use the full amount only for authorized purposes.
- Have no more than 300 employees.
- Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
The SBA has provided this guidance on how to calculate the maximum loan amount for second-draw loans and the necessary documentation to provide by business type.
For more information, visit the SBA website.
Contact an AgCredit account officer for assistance.