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Paycheck Protection Program 2.0 expands eligibility to farmers, ranchers, self employed

Paycheck Protection Program 2.0 expands eligibility to farmers, ranchers, self employed

Another round of the Paycheck Protection Program has been issued, and it has expanded eligibility to include farmers, ranchers and other self-employed people.

The following is information from the Small Business Administration’s website and press releases:

The Small Business Administration (SBA) has started accepting Second Draw Paycheck Protection Program (PPP) loan applications from participating community financial institutions (CFIs) and lenders with under $1 billion in assets, which includes approximately 5,000 institutions, including community banks, credit unions, and farm credit institutions.

SBA reports that least $25 billion is being set aside for Second Draw PPP Loans to eligible borrowers with a maximum of 10 employees or for loans of $250,000 or less to eligible borrowers in low or moderate income neighborhoods.

Loan details

The Paycheck Protection Program (PPP) now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan terms as their First Draw PPP Loan.

Second Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

Maximum loan amount and increased assistance for accommodation and food services businesses

For most borrowers, the maximum loan amount of a Second Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million. For borrowers in the Accommodation and Food Services sector (use NAICS 72 to confirm), the maximum loan amount for a Second Draw PPP Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million.

Who may qualify

A borrower is generally eligible for a Second Draw PPP Loan if the borrower:

  • Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses
  • Has no more than 300 employees; and
  • Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020

Clay Patton talked with Tim Sladek, president of the Waypoint Bank branch in Cozad, Nebraska, to learn more about the PPP 2.0 program and it’s potential benefits to rural businesses and farmers.

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