Update as of May 4, 2021: Due to limited funding remaining, the SBA stopped accepting loan applications from many banks, including Farm Credit associations, for the Paycheck Protection Program. The SBA has indicated there is some funding to process as many loans as possible that were submitted but not yet approved on their platform, but details are unknown for this process. We do know new applications will not be accepted at this time. Please reach out to your Financial Services Officer if you have questions regarding the status of your 2021 PPP loan application. Once again, we thank you for your continued patience with this program as details change!
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Original Details as of January 16, 2021:
SBA’s portal for the second round of PPP (PPP2) loan applications is available to GreenStone members Tuesday, January 19th through March 31st, or whenever funds are exhausted. While SBA continues to work out the details of the loan process, we do anticipate significant interest in these loans, which could result in funds being exhausted quickly. Details of PPP2 can be found at SBA's Paycheck Protection Program website.
As a GreenStone member, if you have not received a PPP loan or meet the gross receipts decrease test and would like to submit a PPP2 loan application through us, please contact your Financial Services Officer. To expedite your application submission into SBA, we will send you a link to apply directly online once eligibility is established.
As you prepare to apply, the following information provides the requirements based on the information we have today for the PPP2 loan options.
To be eligible for a PPP2 First Draw Loan (Open 1/19):
- PPP2 First Draw Loans are for borrowers who did not receive a PPP loan in 2020. The eligibility and maximum loan limitations are largely the same as the PPP 2020 loan process, except self-employed individuals may now use their Gross Farm Income (based on a Schedule F) up to $100,000 versus self-employment income when computing their PPP2 First Draw Loan. For additional detail, please reach out to your Financial Services Officer for documentation requirements and a link to complete the application.
To be eligible for a PPP1 Supplemental Draw Loan (Open 1/25):
- PPP1 Supplemental Draw Loans allow borrowers who received a PPP1 loan, that has not been forgiven, to maximize their loan using their Gross Farm Income up to $100,000. It is important to understand that if you make the decision to apply for a PPP1 Supplemental Draw Loan, you are not eligible to apply for a PPP2 Second Draw Loan until proceeds from the PPP1 Supplemental Draw Loan are fully used. Please contact your financial advisor or CPA to determine if a PPP1 Supplemental Draw Loan is appropriate for your farm.
To be eligible for a PPP2 Second Draw Loan (Open 1/19):
- PPP2 Second Draw loans are for borrowers who received a PPP1 loan. You must have experienced a gross receipts reduction of 25% or greater in 2020 relative to 2019. This can be calculated by quarter or on an annual basis as long as the business has been in operation for all of 2019. Proceeds from PPP1 loans should not be included when evaluating the gross receipts decline. At this time, SBA advises interested borrowers to evaluate their reduction in gross receipts based on the accounting method used to complete their taxes, i.e., on a cash or accrual basis. Based on that, our understanding is the following is necessary to support a gross receipts reduction of 25%:
- Quarterly Support: Third party accounting software or CPA prepared quarterly financial statements for 2020 and 2019 consistent with tax filing accounting methodologies (cash or accrual).
- Annual Support: Internal or CPA prepared annual financial statements for 2020 and 2019 consistent with tax filing accounting methodologies (cash or accrual).
- You must have used, or will use, the full balance of your PPP1 loan prior to receiving proceeds from PPP2. Please note, if your PPP1 loan is currently under SBA review, you are still eligible to apply for a PPP2 loan; however, proceeds will be withheld until your PPP1 loan audit is complete.
Additional PPP2 First and Second Draw Loan Documentation Necessary for customers as defined below (if not already provided as part of PPP1):
- Applicant that is not self-employed:
- Form 941 or Form 943 (or other tax forms containing similar information).
- State quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever was used to calculate payroll), as applicable, or equivalent payroll processor records.
- Evidence of any retirement and employee group health, life, disability, vision and dental insurance contributions.
- A partnership must also include its IRS Form 1065 K-1s.
- A payroll statement or similar documentation from the pay period that covered February 15, 2020. This report must cover the 2/15/2020 pay period only.
- Applicant that is self-employed and has employees:
- 2019 or 2020 (whichever was used to calculate loan amount) IRS Form 1040 Schedule C.
- Form 941 or Form 943 (or other tax forms or equivalent payroll processor records containing similar information).
- State quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever was used to calculate loan amount), as applicable, or equivalent payroll processor records.
- Evidence of any retirement and employee group health, life, disability, vision and dental insurance contributions, if applicable.
- A payroll statement or similar documentation from the pay period that covered February 15, 2020. This report must cover the 2/15/2020 pay period only.
- Applicant that is self-employed and does not have employees:
- 2019 or 2020 (whichever was used to calculate loan amount) Form 1040 Schedule C.
- 2019 or 2020 (whichever was used to calculate loan amount) IRS Form 1099-MISC detailing nonemployee compensation received (box 7), invoice, bank statement, or book of record that establishes that the applicant is self-employed.
- A 2020 invoice, bank statement, or book of record to establish that the applicant was in operation on or around February 15, 2020. This report must cover the 2/15/2020 pay period only.
- PPP2 Second Draw additional information to provide (proof of 25% reduction):
- Quarterly Support: Third party accounting software or CPA prepared quarterly financial statements for 2020 and 2019 consistent with tax filing accounting methodologies (cash or accrual).
- Annual Support: Internal or CPA prepared annual financial statements for 2020 and 2019 consistent with tax filing accounting methodologies (cash or accrual).
Resources and Next Step:
When you are ready, your GreenStone Financial Services Officer will work with you to help evaluate your supporting documents and will provide you a link to complete your PPP2 application online through our partner, Abrigo, to be submitted seamlessly to the SBA.
GreenStone is committed to serving your needs and is working to provide you the answers necessary. However, details of the PPP continue to change. We encourage you to consult your tax accounting professional and visit SBA's website for the most recent information.
