Paycheck Protection Program (PPP)
The U.S. Small Business Administration (SBA), in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act, reopened the Paycheck Protection Program (PPP) on January 11, 2021. First Draw PPP Loans are available starting Monday, January 11 and Second Draw PPP Loans starting Wednesday, January 13.
- Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan (e.g. small businesses, with decreased gross receipts, who used their First Draw PPP fully and appropriately);
- Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount;
- PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks;
- PPP loans may cover additional expenses: operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
- All eligible PPP applications are welcome; however, borrowers must first join the Credit Union before their loan can be processed;
- PPP loans are now available to 501(c)(6)s, housing cooperatives, direct marketing organizations, among other types of organizations; and
- PPP loans now provides increased flexibility for seasonal employees.
The new guidance released includes:
- PPP Guidance from SBA Administrator Carranza on Accessing Capital for Minority, Underserved, Veteran, and Women-owned Business Concerns
- Interim Final Rule on Paycheck Protection Program as Amended by Economic Aid Act
- Interim Final Rule on Second Draw PPP Loans
How to Apply
To take advantage of this program, Freedom First business members have two options:
1. Log into your online business banking platform, where you will be provided with an application link.
2. Call our Contact Center at (540) 389-0244 (local) or (866)389-0244 (toll free) to request a link to our application site.
SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.
Lenders may begin processing loan applications as soon as April 3, 2020. The Paycheck Protection Program will be available through June 30, 2020.
Who Can Apply
Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.
Small businesses in the hospitality and food industry with more than one location could also be eligible if their individual locations employ less than 500 workers.
Loan Details & Forgiveness
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
This loan has a maturity of 2 years and an interest rate of 1%.