What You Need To Know And How To Prepare To Apply For a Second Draw PPP Loan

What You Need To Know And How To Prepare To Apply For a Second Draw PPP Loan

The information below will help you prepare for your Second Draw PPP Loan Application. 

Key Points

• If you received your first PPP loan from Firstrust in 2020, and choose to use the 2019 average monthly payroll to calculate your loan amount, we DO NOT need any additional information from you except the new application.

If you received a PPP loan from Firstrust in 2020, and choose to use the 2020 average monthly payroll to calculate your loan amount, we will need proof of the 2020 payroll figure (payroll journals, 941, tax return, etc).

• For Second Draw PPP Loans greater than $150,000, Borrowers must also submit documentation adequate to establish that the business experienced a revenue reduction of 25% or greater. Based on when your business was in operation, you can use the following to determine what calendar year you will use:

  • If your business was in operation the full year of 2019, then any calendar quarter 2020 compared to the corresponding quarter in 2019.
  • If your business was in operation for a portion of the 2019 calendar year, then any calendar quarter 2020 compared to any quarter in 2019 (2019 second, third, or fourth as applicable).
  • If your business was not in operation in 2019 and was started between 1/1/2020 and 2/15/2020, then second, third or fourth calendar quarter or 2020 compared to the first quarter of 2020.

    ◦ Documentation to support may include relevant tax forms (including sales tax forms), including annual tax forms, or, if relevant tax forms are not available, quarterly financial statements or bank statements.

    ◦ SBA defines revenues as gross receipts: All revenue in whatever form received or accrued from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances.

    ◦ SBA clarified that any forgiveness amount received on a First Draw PPP loan is not included in the calculation of borrower’s gross receipts.

• For Second Draw PPP Loans $150,000 or less, documentation supporting reduced revenue is not required until time of forgiveness. Please use above for reference on how to determine a 25% or more revenue reduction. It is a best practice to go ahead and have this information ready to ensure your qualification to apply for forgiveness before receiving the loan.

• If you are a new Firstrust Second Draw Customer: If you’re a new PPP customer to Firstrust Bank, we will need some additional information from you in addition to the proof of payroll:

  • 1st PPP SBA Loan number assigned 
  • Sole Proprietor/Schedule C/Independent Contractor: Personal Tax Return (last filed) and copy of driver’s license.
  • Business: Corporate Tax Return (last filed), copies of driver’s license for all owners/members (front and bank), company formation documents, operating agreement (if applicable), EIN/TIN letter.
  • Completed Beneficial Ownership Form click here to access the Beneficial Ownership Form and click here for instructions on completing the form, if needed.
  • Documentation that demonstrates a 25% or more reduce in revenue (see above).

• If you would like to view the application in advance of applying, you may click here. Please note, Firstrust will not be taking paper applications. All applications will be done online, through the Loan Application Portal.

Please keep in mind this information is changing rapidly and is based on our current understanding of the programs. It can and likely will change. Although we will be monitoring and updating this as new information becomes available, please do not rely solely on this for your financial decisions. We encourage you to consult with your lawyers, CPAs and Financial Advisors.