I Didn’t Get a PPP Loan the First Time. Can I Still Get One Now?

I Didn’t Get a PPP Loan the First Time. Can I Still Get One Now?

Cassidy Chansirik
 | 

If you didn't apply for a PPP loan last year, there's still money for you to tap into keep your business afloat in 2021.

In consultation with the U.S. Treasury Department, the Small Business Association has reopened the Paycheck Protection Program for the second time. 

 

$25 billion has been set aside just for eligible borrowers.

 

Here’s what you need to know about the First Draw PPP Loan, the eligibility requirements, and how to apply. 

 

First Draw PPP Loan vs. Second Draw PPP Loan - What’s the difference? 
 

If you didn’t apply for a PPP Loan the first time applications opened in 2020, you can still apply for a First Draw PPP Loan this year. Even though this is the second round of PPP loans, do NOT apply for the Second Draw PPP Loan. The Second Draw PPP Loan is for applicants who have already received a First Draw PPP Loan. 

 

What are the eligibility requirements for the First Draw PPP Loan?
 

To qualify for a First Draw PPP Loan, you need to meet one of the following requirements:

  • Be a sole proprietor, independent contractor, or self-employed person
  • Have a small business concern that meets SBA’s size standards (either the industry size standard or the alternative size standard)
  • Have a 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 more than 500 employees, or that meets the SBA industry size standard 
  • Have a 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
 

What can the First Draw PPP Loan be used for?

  • Funding payroll costs, including benefits
  • Paying for mortgage interest, rent, utilities, worker protection costs related to COVID-19
  • Paying for uninsured property damage costs caused by looting or vandalism during 2020
  • Paying for certain supplier costs and expenses for operations
 

Can my First Draw PPP Loan be forgiven? 

First Draw PPP Loans may qualify for full loan forgiveness if during the 8- to 24-week period following loan disbursement if: 

  • All employee and compensation levels are maintained;
  • The loan proceeds are spent on payroll costs and other eligible expenses; and
  • At least 60 percent of the proceeds are spent on payroll cost
 

What else should I know about the First Draw PPP Loan before I apply? 

  • PPP loans have an interest rate of 1%.
  • Loans issued prior to June 5, 2020 have a maturity of two years. Loans issued after June 5, 2020 have a maturity of five years.
  • If a borrower does not apply for loan forgiveness, payments are deferred for 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.
  • Neither the government nor lenders will charge small businesses any fees.
 

How and when do I apply for the First Draw PPP Loan? 
 

You can apply for a First Draw PPP Loan using this form until March 31, 2021. To find participating lenders near you, you can use this map created by the SBA. 

 

What if I have more questions about the loan? 
 

The SBA has created a resource guide that answers commonly asked questions about loans issued by the Paycheck Protection Program. You can find these questions and answers here

 

If you have still more questions about PPP loans and need advice for your business, LawChamps can connect you with a qualified attorney. 

 

This article is intended to convey generally useful information only and does not constitute legal advice. Any opinions expressed are solely those of the author, not LawChamps.

Cassidy Chansirik

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