- DIGITAL BANKING
Branch Lobbies Are Open: click here for modified hours.
Paycheck Protection Program : click here for details about the second round of PPP loans and forgiveness information.
Q. When will borrowers be able to apply for this round of PPP loans?
A. The SBA will begin accepting First Draw PPP loan applications through Community Development Financial Institutions (CDFIs) on Monday, January 11, 2021, and will begin accepting Second Draw PPP loan applications through CDFIs on Wednesday, January 13, 2021. “Shortly thereafter” the SBA will begin accepting PPP loan applications from all participating lenders, with no official date yet announced. As a result, Northfield Bank is not accepting PPP applications at this time, but is preparing to implement the amended PPP program once the SBA begins accepting PPP loan applications from its participating lenders.
Q. I already have a PPP loan. Am I eligible to apply for a second PPP loan?
A. To qualify for Second Draw PPP loans, borrowers must have received a First Draw PPP loan, must have used, or will use, the full amount of such First Draw PPP loan on or before the expected date the Second Draw PPP loan will be disbursed to borrowers, employs not more than 300 employees and, for loans greater than $150,000 borrower submit documentation adequate to establish a revenue reduction (gross receipts) of 25% or greater in any one quarter of 2020 relative to that same quarter in 2019. Second-time PPP borrowers will generally be eligible to borrow an amount equal to 2½ times their average monthly payroll costs. Applicants in the accommodation and food services industries, industries that have been hit especially hard by the pandemic, as designated by the Small Business Administration, are eligible for loans that amount to 3½ times their average monthly payroll. The maximum amount available for second-loan PPP borrowers is $2 million.
Q. I never applied for a PPP loan previously. Am I eligible to apply for one in this next round of PPP funding?
A. Yes. First time PPP borrowers are eligible to borrow an amount equal to 2½ times their average monthly payroll costs, while applicants in the accommodation and food services industries, are eligible for loans that amount to 3½ times their average monthly payroll. Businesses must have 300 or fewer employees and can borrow up to $2 mm in PPP funding. The Economic Aid Act, under the new Consolidated Appropriations Act 2021, allocates $15 billion to community lenders to focus on providing much needed PPP loans in minority and rural communities, and earmarks a portion of PPP funding for borrowers with 10 or fewer employees and loans of less than $250,000 in low and moderate income areas.
Q. Will there be new forgiveness requirements for a second PPP loan?
A. The PPP focus still emphasizes payroll. Borrowers are still required to spend at least 60% of the funds on payroll to receive full forgiveness, while the remaining 40% may be used on such eligible costs as certain mortgage expenses, rent and utility payments. The bill expands forgivable expenses to include expenditures for personal protective equipment and other gear to protect workers; supplier costs; operations expenditures, such as software; and property damage costs due to public disturbances during 2020.
Q. Have there been any changes to the forgiveness process on my original PPP loan?
A. Yes. This new bill will introduce a simplified forgiveness application for loans of $150,000 or less, including a one page certification process. It is believed that loans above this dollar amount will still have the choice of using the current Form 3508EZ or Form 3508 to request PPP loan forgiveness.
Q. Are there any other benefits, in addition to the simplified forgiveness application for loans of $150,000 or less, I may receive on the forgiveness of my current PPP loan?
A. Yes. This new bill expands the list of eligible forgiveness expenses to include expenditures for personal protective equipment and other gear to protect workers; supplier costs; operations expenditures, such as software; and property damage costs due to public disturbances during 2020. The new bill also repeals the CARES Act provision that requires PPP borrowers to deduct EIDL advances from their PPP amounts. Importantly, also, the legislation also clarifies that businesses that received PPP loans may take tax deductions for the expenses covered by forgiven loans.
Q. Where can I find more information about PPP?
A. Visit the SBA PPP page at https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program or review recent changes by Congress, and interim final rules related to second-draw loans.