This webinar is offered by CalNonprofits. Visit their website for full details and to register.

The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Economic Aid Act), passed in late December, includes more than $284 billion for another round of the Paycheck Protection Program (PPP) loans.

PPP 2.0 Overview

The PPP 2.0 loan application process runs January 11 through March 31, 2021. Similar to the PPP in 2020, PPP 2.0 will require borrowers to work through a lending partner (bank or financial institution) approved by the Small Business Administration, and loans are forgivable if borrowers meet the loan forgiveness requirements. But, there are also a number of new provisions and requirements in PPP 2.0.

The PPP 2.0 includes two avenues for accessing funds: First Draw Loans and Second Draw Loans:

First Draw Loans

• Open to organizations that did not receive a PPP loan in 2020, or that did not receive forgiveness by 12/27/20 for a 2020 PPP loan, and either returned or did not accept a portion of that loan
• Application process opened on Monday 1/11/21 for SBA-approved financial institutions
• Other lenders will be able to process these loans soon (date TBD)
• Small businesses and nonprofits with 500 or fewer employees are eligible
• Also: tribes, self-employed individuals, and independent contractors

Second Draw Loans

• For organizations that received a PPP loan in 2020 and have used or will use the full loan amount for authorized expenses
• have 300 or fewer employees
• can show a 25% or more decrease in gross revenue between comparable quarters in 2019 and 2020
• Application process opened on Wednesday 1/13/21 for SBA-approved community financial institutions
• Other lenders will be able to process these loans soon (date TBD)
• For most borrowers, the maximum Second Draw loan amount is 2.5 times the average monthly payroll costs for either 2019 or 2020.

THIS WEBINAR WILL BE RECORDED. Please register and the recording and slides will be emailed to you the next day.

PPP 2.0 – more details

Both types of loans are forgivable if, within the 8- to 24-week period after the loan is received, the organization:

• maintains employee and compensation levels
• spends the funds on payroll (at least 60% of total) and other eligible expenses

Funds from both loan types can be spent on:

• payroll costs, including benefits
• mortgage interest, rent, utilities
• worker protection costs related to COVID-19
• certain other operations expenses

The new PPP 2.0 includes special set-aside funds (First Draw more than $15 billion, Second Draw more than $25 billion) for borrowers with 10 or fewer employees or for loans $250,000 or less for borrowers in low- or moderate-income neighborhoods.

Note to arts nonprofits:
Nonprofits that received a PPP in 2020 can apply for the new federal Shuttered Venue Operators Grant Program (aka Save Our Stages), if they are eligible, but cannot receive both a Second Draw PPP loan and a Shuttered Venue Operators grant.

The SBA is encouraging all its lending partners for PPP 2.0 loans to “redouble their efforts to assist eligible borrowers in under-served and disadvantaged communities.