With Round Two of PPP loans now being awarded, we’re getting a lot of questions about what the new rules regarding the qualifications for receiving funds. The simple answer is the rules have indeed changed, and this is the perfect time to reach out to your FSB loan officer to see whether your small business can benefit from a PPP loan.
A Few Key Facts
Most important to know is that even small business owners who received PPP loans in the first round are typically eligible to receive additional loans. People in this category would be applying for what’s known as a Second Draw loan.
Second Draw loans are for eligible small businesses with 300 employees or less. To qualify, you must demonstrate that your small business realized at least a 25% reduction in gross revenue between comparable quarters in 2019 and 2020. The maximum amount of a second draw loan is $2 million.
Though the Small Business Administration approved $2.2 million in loans in the first round, there were many, many small business owners who either didn’t apply, didn’t know how to apply, or submitted incomplete applications and were denied funds. Those small business owners could still be eligible for what’s known as a First Draw loan. First draw PPP loans of up to $10 million are for borrowers who did not receive a loan in the first round of the program, which ended Aug. 8, 2020
Picture-Perfect Application Process
Here at FSB, we took great care during the first round of PPP loans to make sure our small business customers had the support they needed. Our loan officers were proactive about reaching out to customers and went the extra mile to help them complete applications and receive their checks in record time. We awarded a total of$20,000,000.00 in loans.
Among the recipients was Guy Harris, owner of Sylamore Creek Camp, a popular campground in Mountain View. Guy contacted loan officer, Tina Jones, on a Friday, she helped him complete his application over the weekend, and by early the following week, he had his check in hand.
Co-owners of Sigler Music and Elite Core, Trey McClurkin and Chris Ward, had a similar positive experience. Mr. Barnard and loan officer, Kevin Wish, got the ball rolling over one weekend for McClurkin and Ward, collecting the pertinent information to submit and underwrite the loan. By Monday morning, the funds came through and Trey and Chris knew they would be able to face their pandemic challenges.
We’re Here to Help
We want to make sure every FSB small business owner is able to receive the funds if they qualify. If didn’t apply for or qualify for a PPP loan initially, let us help determine your eligibility for a First Draw loan. We also encourage you to reach out to your loan officer as soon as possible to determine if you’re eligible for a Second Draw (if you previously received a PPP loan). The pandemic is still a serious challenge for many small businesses, and we want to do all we can to help you through these trying times.
To qualify, you must demonstrate that your small business realized at least a 25% reduction in gross revenue between comparable quarters in 2019 and 2020. The maximum amount of a second draw loan is $2 million.
If you have questions about First Service Bank or the Payroll Protection Program (PPP) loan, speak with your loan officer or call us at 501-679-8000.