Payroll Protection Plan
We are now accepting Applications for 2nd Round PPP Loans
You are eligible for a second draw loan if you have exhausted your first PPP loan and,
- you have less than 300 employees, and,
- you have experienced a greater than 25% reduction in gross receipts during the first, second, third, or fourth quarter in 2020 relative to the same quarter in 2019.
- The maximum loan amount is the average monthly payroll costs for the entity during the 12 months prior to the loan or, at the election of the borrower, 2019's average monthly payroll costs multiplied by 2.5 (or 3.5 for employers in the accommodation and food service industry).
- Seasonal employers utilize average monthly payroll costs for a 12-week period between February 15, 2019 and February 15, 2020.
- A loan may not exceed $2 million.
Second Draw Loan Forgiveness
The amount of loan that can be forgiven is the lesser of:
- Costs incurred or expenditures made between the date of the origination of the loan and ending on a date of your choosing that is between 8 and 24 weeks after origination for: (a) payroll costs, (b) qualifying mortgage interest or rent obligations, (c) covered utility costs, (d) covered operations costs, (e) covered property damage, (f) covered supplier costs, and (g) covered worker protection expenditures; or
- Payroll costs for the same period divided by 0.60 (this serves as a cap on the total loan forgiveness to ensure that at least 60% of the total amount forgiven is for payroll costs).
- Like original PPP loans, the amount of loan forgiveness can be reduced if the borrower has (1) reduced the number of employees or (2) employee salaries by more than 25%. However, the same safe harbors that apply to original PPP loans apply to Second Draw loans.
Second Draw Loan Terms
In general, borrowers may receive a loan amount of up to 2.5X the average monthly payroll costs (capped at $100,000 annual salary per employee) during the year prior to the loan or the previous calendar up to a maximum of $2 million, subject to the following exceptions:
- Seasonal employers may calculate their maximum loan amount based on a 12-week period beginning February 15, 2019 through February 15, 2020.
- New entities may receive loans of up to 2.5X the sum of their average monthly payroll costs, capped at $100,000 annual salary per employee.
- Entities in Accommodations and Food Services (NAICS codes beginning in “72” as reported on an entities tax returns) may receive loans of up to 3.5X average monthly payroll costs.
- Businesses with multiple locations that are eligible entities under the initial PPP requirements may employ not more than 300 employees per physical location.
- Waiver of affiliation rules that applied during initial PPP loans apply to a second loan.
Borrowers of a PPP second draw loan are eligible for loan forgiveness equal to the sum of their payroll costs, as well as covered mortgage, rent, and utility payments, covered operations expenditures, covered property damage costs, covered supplier costs, and covered worker protection expenditures incurred during the covered period. Full forgiveness will still require the same 60/40 allocation between payroll and non- payroll costs that applies to initial PPP loans. Forgiveness for loans of not more than $150,000, will have a simplified forgiveness process.
How Do I Get Started?
UCB has developed a convenient online process to apply for your 2nd Draw PPP Loan. We will use our online channels to accept information and correspondence related to PPP will occur online and through email, including the application process, submission of required documents and follow-up correspondence.
If you are ready to apply, click here to proceed to our online PPP portal.
Our bankers are readily available to answer and questions you may have regarding your PPP Loan. You can contact us at 866.505.3736 for additional questions or concerns.