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U.S. Small Business Administration

Paycheck Protection Program

"The Economic Aid Act" Second Draw Loans

On March 30, 2021, the Paycheck Protection Program (PPP) Extension Act of 2021 was signed into law, granting a two month extension of the PPP application period. CoastHills Credit Union will accept new PPP applications through 5:00 p.m. on Monday, May 17, 2021.

The PPP was reauthorized earlier this year as a part of the Economic Aid Act, a $284 billion stimulus plan aimed at providing continued assistance to individuals and businesses that have been financially impacted by the ongoing coronavirus pandemic.

Section 311 of the Economic Aid Act added a new temporary section 7(a)(37) to the Small Business Act. This new section authorizes the U.S. small Business Administration to guarantee Paycheck Protection Program Second Draw Loans as follows:

What is the deadline to apply for a PPP loan?

Applications will be accepted through Monday, May 17, 2021 at 5:00 p.m.

My company already received a PPP loan. Can I apply for another one?

To be eligible for a “second-draw” PPP loan a business can’t have more than 300 employees. Businesses receiving second-draw loans must have experienced a 25 percent or more reduction in revenue in 2020 compared to 2019. (This calculation does not include loan forgiveness). In addition, the first issued PPP loan must be fully utilized or will be fully utilized on or before the expected date of the second issued PPP loan.

Who can apply?

The following entities affected by Coronavirus (COVID-19) may be eligible:

  • Any small business concern that meets SBA’s size standards (either the industry based sized standard or the alternative size standard)
  • Sole proprietors, independent contractors, and self-employed persons
  • Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location
  • Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans' organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
    • 500 employees, or
    • That meets the SBA industry size standard if more than 500
  • Experienced a reduction in revenue in calendar year 2020

Loan Details

  • Loan Amount is the lower of the two:
    • $2MM
    • 2.5 months of payroll costs or
    • 3.5 months of payroll costs for those sectors assigned a NAICS Code beginning with 72
  • The proceeds of a PPP loan are to be used as follows:
    • Minimally, 60% for payroll costs
    • Costs related to the continuation of group health care, life disability, vision, or dental benefits during periods of sick, medical, or family leave and group health care, life, disability, vision, or dental insurance premiums
    • Mortgage Interest, excluding prepayments of principal
    • Rent payments
    • Utility payments
    • Interest payments on any other debt obligations that were incurred prior to February 15, 2020
    • Refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020
    • Covered operations expenditures (payments for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment or tracking of payroll expenses, human resources, sales and billing functions or accounting or tracking of supplies, inventory, records and expenses
  • PPP loans have an interest rate of 1%
  • Loans issued prior to June 5, 2020 have a maturity of 2 years. Loans issued after June 5, 2020 have a maturity of 5 years
  • Loan payments will be deferred for borrowers who apply for loan forgiveness until SBA remits the borrower's loan forgiveness amount to the lender. If a borrower does not apply for loan forgiveness, payments are deferred 10 months after the end of the covered period for the borrower’s loan forgiveness (either 8 weeks or 24 weeks)
  • No collateral or personal guarantees are required

What period do the loans cover?

PPP loans can cover any length between 8 and 24 weeks depending on what best meets the business’ needs.

How do I apply for a PPP Loan?

  • Complete the loan application below
  • Provide a copy of 2019 and 2020 tax returns, if not available provide quarterly financial statements for 2019 and 20201 tax returns
  • Provide a copy of 2020 IRS Form 941 for each quarter

Loan Forgiveness

Borrowers may be eligible for loan forgiveness if the funds were used for eligible payroll costs, payments on business mortgage interest payments, rent, or utilities during either the 8- or 24-week period after disbursement. A borrower can apply for forgiveness once it has used all loan proceeds for which the borrower is requesting forgiveness.

Ready to apply?

First things first - use the application checklist to ensure you are submitting a complete package. Click here, to view the checklist.

Then…

  • BEGIN the loan application.2 You may fill out online or print and complete by hand.
  • DOWNLOAD & SAVE the application form to your computer before completing. Information typed to the form prior to downloading and saving the form will not be saved.
  • COMPLETE the form in its entirety—incomplete sections and/or unanswered questions cannot be processed and will delay the processing of your request. (NOTE: You will be asked to submit “Average Monthly Payroll.”)
  • PRINT & SIGN — be sure to initial to certify responses to eligibility questions where indicated.
  • SUBMIT either electronically (recommended) or hard copy.
    • To submit electronically, attach a copy of your signed application, along with electronic copies of supporting payroll documentation as outlined within the application instructions, to Upload Application Documentation or email PPP@CoastHills.coop.
    • To submit a hard copy, drop off your printed, signed application, along with copies of supporting payroll documentation, at any one of our branch locations to be forwarded to the Business Services Department.
1In the event, 2020 Tax Returns are not available, quarterly financials are acceptable.
2Membership requirements apply. Terms and qualifications subject to change.