How To ApplyThe forms are Form 2483 – Paycheck Protection Program Borrower Application Form and Form 2483-SD – PPP Second Draw Borrower Application Form. Form 2483 is updated from previous statements that started with the original PPP program. Form 2483-SD is a new form for qualified PPP borrowers to get a second draw of a forgivable loan as they try to navigate the economic chaos through the COVID-19 pandemic. The first round will be select lenders and borrowers that are first time borrowers. The second draw will begin 1/13/2021 and be for second time borrowers. With the original PPP relief bill providing $525 billion in forgivable loans, the second round provides a significantly less amount with $284.5 billion available. This includes $35 billion for first-time loans and $15 billion set aside for community financial institutions.
Who Will Receive Funding First?It was stated that community financial institutions who serve minority, women and veteran-owned businesses will take priority on this round of loans, since they widely missed out on the first-round last year. Community financial institutions are typically smaller and local banks, like credit unions, community development financial institutions, or minority depository institutions. The SBA’s inspector general announced that more than 57,000 potentially ineligible borrowers had obtained $3.6 billion from the program last year, and they want to be sure that this does not happen again. There will be extra precautions taken when making sure that large entities do not receive PPP funding. Typically, an entity that is ineligible to receive a First Draw PPP Loan under the original rules will also be ineligible for a Second Draw PPP Loan.
Second Draw PPP LoanYou may not receive a Second Draw PPP Loan if an entity is:
- Engaged in political activities or lobbying activities
- Organized or associated with China or Hong Kong
- Registered under the Foreign Agents Registration Act
- Received a grant for shuttered venue operations
- The President, the Vice President, head of an Executive department or a Member of Congress, or the spouse of such person owns, controls or holds at least 20% of any class of equity
- A publicly traded company