First Draw PPP Loan 

  • Business was in operation on February 15,2020
  • Has no more than 500 employees
  • Never received  a previous PPP loan from any financial institution
  • Max loan $10 million
  • Five- year term
  • Refer to application Form and SBA.gov website for additional requirements

 Second Draw PPP Loan 

  • Business was in operation on February 15,2020
  • Had received a PPP Loan from a financial institution previously and has used all proceeds (or will have prior to disbursement of proceeds from the second loan)
  • Has no more than 300 employees
  • Experienced a 25% or more reduction in annual gross receipts between 2019 and 2020
(or a comparable quarter in 2019 and 2020)
  • Max loan $2 million
  • Refer to application Form and SBA.gov website for additional requirements
  • Be prepared with your SBA number and your loan amount from your first draw

While based on similar principles as the first round of PPP funding under the CARES Act, the second round of PPP (the "Second Draw") has some key differences that are summarized below:

Limited Eligibility for Second Draw PPP Loans: The Second Draw of PPP loans are available to borrowers that previously received a PPP loan. Second Draw PPP loans are limited to businesses that (i) employ no more than 300 employees (down from 500) or meet an alternative size standard; (ii) have used the entire amount of their first PPP loan or will use such amounts, and (iii) had gross receipts during Q1, Q2 or Q3 2020 that were at least 25 percent less than the gross receipts from the same quarter in 2019 (applicants may use Q4 2020 if they apply after January 1, 2021). If the business was not in operation for a portion of 2019, then the comparable quarters may be different. The limitations put in place for Second Draw loan eligibility, as explained in this section, do not apply to first-time borrowers.

Maximum Loan Amount: Borrowers of a Second Draw PPP loan have an option to calculate the maximum loan amount by multiplying the borrower's average total monthly payroll in (a) the one-year period prior to the date on which the loan is made, or (b) calendar year 2019, by 2.5x. The maximum loan amount has been reduced from $10 million in the first round to $2 million. Similar to the first round, seasonal employers calculate their maximum loan amount differently. Note that the $2 million cap does not apply to first-time borrowers, that cap remains at $10 million.

Maximum Loan Amounts for the Hospitality Industry: Borrowers of a Second Draw PPP loan that have NAICS Code 72 (typically restaurants and hotels) are permitted to use a 3.5x multiplier of their average monthly payroll costs to calculate their maximum loan amount, subject to the $2 million cap.

Covered Period: Originally the SBA provided that the covered period (the time in which a borrower must use the funds to qualify for forgiveness), would be an eight-week period beginning on the date the borrower received the loan proceeds. In subsequent amendments, the covered period was expanded to 24 weeks. Borrowers are now able to choose the length of their covered period so long as it is at least eight weeks and is not longer than 24 weeks. This subtle change will allow borrowers more control over how to handle potential reductions in workforce once the PPP funds are exhausted.

Use of PPP Funds: Congress expanded the types of expenses for which all PPP loans can be used, which applies to existing PPP loans (except in the event forgiveness has already been obtained) and new loans. In addition to payroll, rent, covered mortgage interest and utilities, the PPP now allows proceeds to be used for:

  • Covered Operations Expenditures: payments for business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment or tracking of payroll expenses, HR and billing functions, or account or tracking of supplies, inventory, records and expenses
  • Covered Property Damage Costs: costs related to property damaged and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance or other compensation
  • Covered Supplier Costs: expenditures to a supplier of goods that are essential to the operations of the entity at the time at which the expenditure was made and is made pursuant to a contract or order in effect at any time before the covered period or, with respect to perishable goods, in effect at any time during the covered period
  • Covered Worker Protection Expenditures: operating or capital expenditures that allow a business to comply with requirements or guidance issued by the CDC, HHS, OSHA or any state or local government during the period beginning March 1, 2020 and ending on the date which the national emergency declared by the president expires related to the maintenance of standards for sanitation, social distancing or any other worker or customer safety requirement related to COVID-19. These expenses appear to include PPE, physical barriers that were put in place, expansion of indoor/outdoor space, ventilation or filtration systems and drive-through windows.

Before Applying for loan, please review the application form to determine what information you will be required to provide. Do not complete this form, but instead make your application through the online link provided.

If this is the first time you are applying, please review the SAMPLE application PRIOR to beginning your online application. NOTE: Paper applications are not being accepted. The sample in the link below is for informational purposes only. 

Application Sample

If this is the second draw, please review the SAMPLE application PRIOR to beginning your online application. NOTE: Paper applications are not being accepted. The sample in the link below is for informational purposes only. 

Application Sample

 

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Empower Federal Credit Union welcomes employees of many companies, immediate family/household members of employees and retirees, as well as our outreach to underserved communities to enjoy personal and business banking solutions including auto loans, mortgages*, credit cards and more. Bank online, in any central NY branch, or call us at 315.477.2200.

* Home mortgages available in FL, PA, CT, NY and NC.