Martin Luther King Jr. Day
The Small Business Administration (SBA) announced on 1/13/21 that access to the portal to receive SBA authorization will be open to banks on Tuesday January 19, 2021.
To submit a 2nd-Draw application, please send the three items listed below to your Home Bank representative via email. For other inquires, contact us at 866-401-9440.
Home Bank will require the following information to apply for 2nd-Draw PPP Loans:
- Second-draw application SBA Form 2483-SD linked below.
- Proof of revenue losses. Home Bank is requesting proof of revenue loss for all loans regardless of size at application to help ensure that the borrower will qualify for forgiveness. See Below in Detail for Borrowers for high level instructions and refer to SBA Guidance linked below for more specific details.
- Payroll documentation. If you received your initial PPP loan with Home Bank, we already have this information and it is not required. However, if you want to change the basis on which the loan amount is calculated, you will need to provide the supporting payroll documentation.
SBA guidance for second draw PPP borrowers: Click here
PPP Second Draw Application Form 2483-SD: Click here
Details for Borrowers
Businesses will be required to submit documentation that their revenue declined at least 25% in 2020 versus 2019. (See #5 on the list below for additional details). This will not have to be tax documents, however, we anticipate that tax documents will be required in the forgiveness process.
Generally, to be eligible for a Second Draw PPP Loan you must have:
- Received an initial PPP loan;
- Used or will use the full amount of your initial PPP loan for authorized purposes on or before the expected date of disbursement of the Second Draw PPP loan;
- Spent the initial PPP loan on eligible expenses;
- 300 or fewer employees; and
- Experienced a 25% revenue reduction in 2020 relative to 2019. You calculate this by comparing: (1) gross receipts* for the quarters of 2019 to the quarters of 2020 (EXAMPLE: a borrower with gross receipts of $50,000 in the second quarter of 2019 and gross receipts of $30,000 in the second quarter of 2020 has experienced a revenue reduction of 40% between the quarters, and is therefore eligible for a Second Draw PPP loan) - OR- (2) the entire year of 2020 to 2019 (if you were operational for all four quarters).
*“Gross receipts” are defined as: All revenue in whatever form received or accrued (in accordance with your accounting method) from whatever source. Generally, it is “total income” plus “cost of goods sold” and excludes net capital gains or losses. You cannot be permanently shut down.
The maximum loan amount for a Second Draw PPP Loan is equal to 2.5 times your average monthly payroll cost. To calculate this amount, you may use the preceding 12 months in 2020 or 2019. Unfortunately, sole proprietors and independent contractors cannot use this method – please refer to Interim/Final Rule for details. If your NAICS begins with 72 (Accommodation & Food Services Sector), your maximum loan amount for a Second Draw PPP Loans is equal to 3.5 times your average monthly payroll cost. The loan amount cannot exceed $2M.
At the time of application, you will need to submit documentation to establish the required revenue reduction. In addition, lenders can rely on the documents you submitted for your initial PPP loan if you are relying on the year 2019 for your calculations. In some instances, you may not need to submit documentation with your application.
The Loan Forgiveness rules remain the same under both Second Draw and initial PPP programs. The expanded categories of eligible expenses are a recent noteworthy change. Please be aware that you still must use at least 60% of the loan proceeds on payroll costs and no more than 40% on other eligible expenses:
Payroll: salary, wage, vacation, parental, family, medical, or sick leave, health benefits.
Mortgage interest: as long as the mortgage was signed before February 15, 2020.
Rent: as long as the lease agreement was in effect before February 15, 2020.
Utilities: as long as service began before February 15, 2020.
Covered operations expenditures: payment 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.
Covered property damage costs: cost related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance or other compensation.
Covered supplier costs: expenditure made by an entity to a supplier of goods for the supply of goods that are essential to the operations of the entity at the time at which the expenditure is made and is made pursuant to a contract, order or purchase order in effect at any time before the covered period or with respect to perishable goods in effect before or at any time during the covered period.
Covered worker protection expenditures: an operating or a capital expenditure to facilitate the adaption of business activities to comply with requirements established or guidance issued by the DHHS, the CDC, or the OSHA, or any equivalent requirements established or guidance by a State or local government, during the period beginning on March 1, 2020, and ending the date on which the national emergency related to as COVID-19 expires, related to the maintenance of standards for sanitation, social distancing or any other worker or customer safety requirement related to COVID-19. Expenditures may include: the purchase, maintenance or renovation of assets that create or expand: a drive-thru window facility; an indoor, outdoor or combined air or air pressure ventilation or filtration system; a physical barrier such as a sneeze guard, an expansion of additional indoor, outdoor, or combined business space; an onsite or offsite health screening capability (do not apply to residential or intangible property). PPE is also included in this additional category.