Paycheck Protection Program

Additional funding for Paycheck Protection Program (PPP) forgivable loans was made available by the Small Business Administration (SBA) in January, 2021 to help qualifying businesses weather the financial hardships of COVID-19.
 
On March 30, the President authorized extending the application deadline for PPP loans to May 31, 2021.

While second-draw PPP loans will be issued in a manner similar to the first round of loans, some parts of the application and loan forgiveness processes have been simplified. 

Please review this Q&A on PPP loans for more information on your business’ eligibility and the application process, or contact one of our Business Advisors at 1-800-288-3425. (For information on applying for forgiveness of your first-round PPP loan, click here.)

Q: Can Think help my business get a PPP loan?
A: Yes. Think will facilitate loans for qualifying Minnesota-based businesses that:
• Received a first-round PPP loan with Think and would like to apply for a second-draw loan.
• Have not received and/or applied for a first-draw PPP loan, but would like to apply now.
• Worked with another bank on their first-round PPP loan and would like to work with Think on their second-draw loan.

Q: Is my business eligible for a PPP loan now?
A: Whether or not your business took part in the first round of funding, your business may now be eligible for a PPP loan. Loans will be available to the following types of businesses:
Businesses, sole proprietors, independent contractors, self-employed individuals, certain non-profits, faith-based organizations, and housing cooperatives.

To be eligible for a first-draw PPP loan:
• Your business has less than 500 full-time, part-time, or seasonal employees.
• Your business was operational before February 15, 2020 and remains operational.

To be eligible for a second-draw PPP loan:
• Your business has less than 300 full-time, part-time, or seasonal employees; if you have multiple locations, you may not have more than 300 employees per location.
• You are able to demonstrate a revenue reduction of at least 25% in any quarter of 2020 (when compared with the same quarter in 2019).
• You have used or will use the full amount of the first-draw PPP.
• Your business was operational before February 15, 2020 and remains operational.

Q: Are there any different criteria for qualifying for a second-draw PPP loan compared to a first-round loan?
A: The criteria are very similar to the first round, with a few exceptions.
• The business must show at least a 25% drop in gross receipts for one quarter in 2020 when compared to that same quarter in 2019.
• The business must have already used or will use the full amount of money granted to them in their initial round of PPP on or before the expected date of disbursement of the second- draw PPP loan.
• A company must have 300 or fewer employees to be eligible, down from the 500-employee cap in the first round.

Q: How much money could my business expect from a second-draw PPP loans?
A: Here's what to know:
• The loan limit is $2 million.
• The amount a business will qualify for is determined by taking their average monthly payroll in 2019 and multiplying it by 2.5.
• Business operating in industries with NAICS codes beginning with 72 (restaurants, bars, hotels, etc.) are eligible for a 3.5 times multiplier instead of 2.5 times.

Q: How do I apply for a second-draw loan if my business received a first-round loan?
A:  If your business received a first round PPP loan and is applying for a second-draw loan, you will use this PPP Loan Second-Draw Application or this PPP Loan Second-Draw Schedule C Application.
 
Please note that the SBA recently updated the application rules on Schedule C borrowers for calculating their maximum loan amount. Borrowers may now calculate their maximum loan amount using gross income. This ruling change will only apply to loans approved after March 3, 2021. Borrowers that have already had their loans approved can not increase their PPP amount under the new maximum loan formula.

• If your business is applying for a loan of $150,000 or more, you will need to provide your internal profit/loss statements to show a 25% drop in gross receipts for one or more quarters in 2020 when compared to those same quarters in 2019 at the time of application.
• If your business is applying for a loan of less than $150,000, you will need to provide documentation showing your revenue loss to be eligible for loan forgiveness. Even if your loan is less than $150,000, we encourage you to provide this documentation at the time of you application if it is available. If you cannot document a loss of 25% or more in 2020 compared to the same quarter in 2019 then you will need to repay the PPP loan.

Q: How do I apply for a PPP loan if I didn’t do so in the first round?
A: If your business did not apply during the first round but would now like to secure a PPP loan, the re-opened program means you can now apply for the first time, but are subject to the terms of the initial program. You will need to complete this PPP Loan First-Draw Application  or this PPP Loan First-Draw Schedule C  Application and to provide payroll and tax documentation. If you qualify and receive a loan, you will then need to complete a follow-up application to have your loan forgiven. Our Business Advisors are ready and willing to assist you. Please call 1-800-288-3425.

Q: What should I do if I received my first PPP loan through a different bank, but I want to work with Think on my second-draw loan?
A: You will need to complete this PPP Loan Second-Draw Application or this PPP Loan Second-Draw Schedule C Application and provide Think the same payroll and tax documentation you provided to the first bank that assisted you. Our Business Advisors are ready and willing to assist you. Please call 1-800-288-3425.

Q: If I need to provide payroll and tax documentation because I am applying for a PPP loan for the first time or I used a different bank for my previous PPP loan, what kind of documents can I provide?
A: Please provide the items below that are applicable to your business:
• 2019 and/or 2020 tax returns for Schedule C filers
• 2019 and/or 2020 941’s
• 2019 and/or 2020 W2’s
• 2019 and/or 2020 detailed payroll report
• Internal Profit/loss statements that show a 25% drop in gross receipts for one or more quarters in 2020 when compared to those same quarters in 2019 (if your second-draw PPP loan is $150,000 or more)