New SBC Guidance on Second Draw PPP Loans

Levene Gouldin & Thompson, LLP issued an article called, “COVID Stimulus Bill and EEOC Vaccine Guidance” which included a general overview of Second Draw PPP Loans.  A link to that article is located here:

On January 6, 2021, the Small Business Administration issued an Interim Final Rule on Second Draw Loans.  A link to the Interim Final Rule is located here:

Second Draw PPP Loans are generally subject to the same terms, conditions and requirements as First Draw PPP Loans. These include, but are not limited to the following terms:

• The guarantee percentage is 100 percent

• No collateral will be required

• No personal guarantees will be required

• The interest rate will be 100 basis points or one percent, calculated on a non-compounding, non-adjustable basis

• The maturity is five years

• All loans will be processed by all lenders under delegated authority and lenders will be permitted to rely on certifications of the borrower to determine the borrower’s eligibility and use of loan proceeds

The key differences between First Draw PPP Loans and Second Draw PPP Loans are outlined in this Interim Final Rule and include details on the following:

• Second Draw PPP Loan Program

• Requirements to apply to Second Draw PPP Loans

• Who is eligible for a Second Draw PPP Loan

• How the SBA’s affiliation rules affect an applicant’s eligibility for a Second Draw PPP Loan

• Who is ineligible for a Second Draw PPP Loan

• The maximum loan amount for a Second Draw PPP Loan

• How to submit an application for a Second Draw PPP Loan and what documentation must be provided to demonstrate eligibility

• What lenders need to know and do

• Will an applicant’s Second Draw PPP Loan application be affected if there are unresolved issues regarding the applicant’s First Draw PPP Loan

• If Second Draw PPP Loans are eligible for loan forgiveness

The Attorneys at Levene Gouldin & Thompson, LLP are available to provide advice and counsel concerning these new statutory obligations and other matters related to COVID-19.

Connect With Us