2021 Second Draw PPP Loan Information

January 19, 2021

How to Calculate Revenue Reduction and Maximum Loan Amounts Including What Documentation to Provide

January 15, 2021

Pro tips for when you apply for your loan – we're all learning as we go!

• Make sure you enter your physical address in first address line and your PO Box information in the second address line because you can’t operate a business in a box.
• There is no need to purchase a certificate of legal existence. Simply go to the Secretary of State's website, do an inquiry, and take a screenshot of your certificate to upload to the portal.
• The Lenders Cooperative Platform is infinitely better when using Google Chrome or Microsoft Edge.
• Internet Explorer (IE) is really not supported by Microsoft and the performance is very unreliable. Borrowers or Lenders accessing the Platform using the IE Browser will most likely have an inconsistent experience.

January 14, 2021

Reading Cooperative Bank is pleased to participate in the new Paycheck Protection Loan Program which allows for Second Draw PPP loans.

To be eligible for a second PPP forgivable loan, your business must have experienced a reduction in Gross Receipts by 25% or more in 2020 as compared to your gross receipts in 2019. If you have never received a PPP loan, you are also able to apply for your first PPP loan.

If you are ready to apply, please click here and advance to our online portal.

Si solicitó a través de MCCI y necesitas servicios de traducción, contáctelos directamente para ayudarlo.

Please know that this automated system will generate email responses from support@lenderscooperative.com and reference the Affiliate Capital Loan Trading Platform. As always, Reading Cooperative Bank employees are here to help!

Things you should know before applying:

At 9am on Friday, January 15th, the SBA will begin accepting PPP loan applications from community banks. The Reading Cooperative Bank applicant portal will be ready to accept applications at this time.  

This PPP round (for first draw or second draw PPP loans) ends on either March 31, 2021 or on whichever date the funds have been exhausted prior to March 31, 2021.

Documents you will need handy to complete the application:

• Primary identification, including Driver’s License, State Issued ID, or Passport.
• Most recent tax returns for 2019 and management prepared financials for 2020.
• Bank statements or other evidence that you were in business on February 15, 2020. 
• Documentation sufficient to demonstrate the qualifying payroll amount might include:

1. Payroll Processor Records
2. Form 941 for 2019 or 2020
3. Tax returns
4. Schedule C for a contractor or sole proprietor
5. Form 1099-MISC

For loans greater than $150,000, you will need to provide documents demonstrating that your gross receipts declined by 25% or more from 2019 to 2020:

• It is acceptable to provide a single matching quarter comparison showing that your gross receipts reduced 25% or more to qualify.
• You can provide year-over-year comparisons.
• To Qualify for 100% forgiveness, the annual reduction in gross receipts must be 25% or greater.

There is a video you can view in advance of applying that will help you prepare.

Highlights of Second Round PPP Funding Under the Consolidated Appropriations Act, 2021:

• Second-draw loans will be available for borrowers with 300 or fewer employees, that saw a 25% or greater revenue decline in 2020 compared to 2019 and that have used the full amount of their first-draw PPP loan.
• The maximum draw will be $2 million with an aggregate of $10 million when combining the first draw with the second draw.
• You can apply if you are a business, independent contractor, eligible self-employed individual, sole proprietor, non-profit, veteran’s association, tribal business, housing cooperative, AG cooperative, 501c (6), destination marketing organization, or nonprofit news organization.
• Borrowers that have not received a PPP loan can apply for their first PPP loan.
• PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs.
• Businesses that are permanently closed are not eligible for a PPP loan.
• The SBA requires that your business must have been in operation on February 15, 2020 to be eligible.
• If the applicant or the owner of the applicant is the debtor in a bankruptcy proceeding, either at the time it submits the application or at any time before the loan is disbursed, the applicant is ineligible to receive a PPP loan.
• If the applicant has defaulted on a loan guaranteed by the US Small Business Administration, they are ineligible to receive a PPP loan.

The following terms and conditions are the same for both First Draw and Second Draw PPP Loans:

• Rate is 1.00%.
• Maximum Term is 5 years.
• Loan to business, no personal guaranty.
• SBA guaranty is 100%.
• All FAQ’s from the original round of PPP loans apply here except as otherwise stated below.

Differing eligibility for Second Draw PPP funding:

• Must have fewer than 300 employees.
• Must have had a revenue reduction of 25% or greater in 2020 as compared to 2019
• 2.5X monthly average payroll costs; 3.5x for businesses with a NAICS code starting with 72 (i.e. restaurants or related).
• New borrowers can use 2019 or 2020 annual payroll expense for purposes of calculating their maximum loan amount.
• To apply for a second draw PPP loan, applicant must have received a first PPP loan and used all the funds for eligible expenses prior to receiving a second draw loan.
• Businesses that have not used all the funds from their initial PPP loan can apply, but the loan will not be funded until after they use all the funds from the first round.

Please contact us with any questions by calling 781.942.5000, emailing commercialloans@readingcoop.com, or by using the messaging feature within the online application portal.

The current approval timeline from the SBA is 3-5 business days after application submission. You will hear from us at that time.

Click Here to Start Your Application

What to expect once you have submitted your loan:

We will review your entire application to make sure that your submission is complete and that you have included all the appropriate documents. If there are any problems or discrepancies, we will send you an email or call you with instructions.

Once the application has been reviewed (and any problems corrected), we will automatically create the SBA 2483/2483SD application form required for PPP Loan applications that includes all your loan information and send this document to you electronically for your final review and electronic signature.

Once signed, we will prepare and transmit your request to the SBA automatically. The SBA will then review and decide on your loan request - they have indicated that the turnaround time will be 3 days.

Upon approval by the SBA, we will prepare your loan closing documents for you for final review and electronic signature. Disbursement of the approved loan amount will take place after we review your signed loan closing documents.

What if I realize that I made a mistake?

Contact your banker or the bank directly. They can unlock the application, which allows you to make changes and resubmit it. If the application has already been accepted by the SBA, it may be too late to affect any changes. Your lender will be able to check on the status of your application for you.

Helpful Documents:

Top Line Overview of Second Draw PPP

Ask the Regulators Presentation 

Updated January 11, 2021

We would like to remind those of you who have exhausted your PPP funds and who haven't yet applied for loan forgiveness to please do so by visiting our PPP Forgiveness Application Portal and uploading all of the necessary documentation to the site.

If you would prefer to use a visual guide, we have step-by-step instructions for you to follow as you complete the application process.

And if you haven't yet heard, a new round of PPP has been authorized! We have just begun receiving guidance from the Treasury Department and are awaiting more specific details from the SBA. We will share that with you as soon as we have it.

We are currently in the process of finalizing an automated platform for the third round of PPP loans to make things easier for you to apply and automate the delivery to the SBA.

What we know so far:

There have been over 100 pages of PPP rules already released. We will be sifting through the data as we prepare to launch our application portal later this month. The 100 pages of PPP guidance can be read using the following links:

• SBA Guidance on Accessing Capital for Minority, Underserved, Veteran and Women-Owned Business Concerns
• Interim Final Rule on Paycheck Protection Program as Amended by Economic Aid Act 
• Interim Final Rule on Second Draw Loans

We will be in touch as soon as new information becomes available.