We are very pleased to let you know that we can start accepting applications for new First Draw and Second Draw PPP Loans, beginning Tuesday, January 19, 2021. We encourage all eligible MVSB business customers to apply. SBA and Treasury officials have offered assurances that there are sufficient funds to meet expected demand, so please take the time to fully complete and document your application before submitting.
Will your business or organization be eligible to apply?
You may be eligible regardless of whether or not you received a PPP loan in 2020. Please note there are differences between the two types of PPP loans:
- Eligibility requirements which apply to both First Draw PPP Loans and Second Draw PPP Loans (“Second Draw” meaning you previously received PPP funding):
- You plan to maintain employee and compensation levels.
- Loan proceeds are to be spent on payroll costs (at least 60%) and other eligible expenses over an 8-24 week period.
- Any business, independent contractor, eligible self-employed individual, sole proprietor or eligible non-profit organization that is an MVSB customer may apply for a PPP Loan.
- Borrowers must be in good standing with the Secretary of State.
- You must certify that “Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant”.
- Unique requirements for First Draw PPP Loans:
- Loans are for those borrowers who have not received a PPP loan before August 8, 2020.
- Your business must have 500 or fewer employees.
- Your business must have been in operation on February 15, 2020 and must not have closed permanently.
- Unique requirements for Second Draw PPP Loans:
- Your business must have 300 or fewer employees.
- Your business previously received a First Draw PPP Loan and have used the full amount for authorized uses prior to taking the Second Draw.
- Your business must have experienced a reduction in Gross Receipts of at least 25% in one quarter of 2020 as compared to the same quarter in 2019.
Preparing for your PPP application
If you believe you will be eligible for this new round of PPP funding, now is the time to pull together required documents and supporting information.
You will need to provide payroll documentation to support your application, for either 2019 or 2020, depending on which year you choose for your payroll calculation:
- IRS Form 941 quarterly tax returns for all 4 quarters and State quarterly wage unemployment insurance tax reporting forms; or equivalent payroll processor records, along with evidence of any retirement and employee group health, life, disability, vision and dental insurance contributions included in the payroll calculation.
- A payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish the applicant was in operation as of February 15, 2020.
- Include evidence of any individual payroll earnings in excess of $100,000 per employee.
If you are self-employed and want to include owner profit or draw as part of your payroll cost calculation, you will need to provide 2019 or 2020 business income tax schedules, depending on which tax year you select for the payroll calculation. Submit one of the following based on your business type:
- Schedule C for sole proprietors or single member LLCs.
- Form 1065 for partnerships, with accompanying K-1 statements.
- Form 1120-S for Subchapter S corporations, with accompanying K-1 statements.
If you are applying for a Second Draw PPP Loan, you will also need to provide documentation to verify your business experienced a 25% or more decline in gross revenues in 2020 relative to 2019. You will need to provide one of the following:
- A 2019 quarterly profit and loss statement and a 2020 quarterly profit and loss statement for the same quarter, which demonstrates a 25% or more decline in gross revenues.
- If your business does not prepare quarterly revenue information, you can provide a 2019 business tax return and a 2020 business tax return (a draft return will be acceptable for 2020), which demonstrates a 25% or more decline in gross revenues for the full year.
- If the financial statements submitted to support your revenue reduction are not Audited, please sign and date the first page of the financial statement and initial all other pages, attesting to their accuracy.
Now that you are ready…it’s time to apply!
- If you are a current MVSB PPP borrower, an application link will be emailed to you directly. If you do not receive the application link from us, or you are a MVSB commercial customer applying for a First Draw PPP loan, you can access the application link on the webpage, on or after January 19, 2021.
- Carefully read all of the instructions in the MVSB electronic application. The bank cannot process your application until it is complete. The application will not be considered complete until the signed and certified application form is submitted and all required documentation is uploaded. It is important that you provide all of the application materials to the bank so that processing does not get delayed.
- We expect to receive a large volume of applications so it may take a few days until we can get back to you to confirm processing of your application. Someone will review it prior to reaching out to you to ensure that it is complete. Again, it is very important that we have a completed application with all of the backup information to prevent unnecessary delays.
- Please note, all PPP applications must be submitted through MVSB’s electronic portal. Paper applications will not be accepted.
SBA Interim Final Rule – dated January 6, 2021
Thank you for your continued business. We look forward to helping you obtain your PPP Loan.