Thank you for your interest in the Paycheck Protection Program. Please read the below for the latest information on the Program and what to expect.
PPP: Paycheck Protection Program
First Draw Loan: These are first-time PPP loans. If you did not receive a PPP loan in 2020, and would like to apply for your first PPP loan now, you would be applying for a First Draw loan.
Second Draw Loan: If you have already received a PPP loan from a previous round but are requesting a second loan or a re-advance on the first loan.
PPP Deadline: PPP Loan applications may be approved by the SBA through March 31, 2021. The SBA has up to 5 days to approve applications.
Covered Period: The Covered Period is the timeframe where a Borrower must spend the funds received from the PPP Loan. The Borrower may select a Covered Period of 8-weeks up to 24-weeks. The Covered Period begins the date of loan disbursement and concludes 8-weeks up to 24-weeks (the length is up to the Borrower).
Who is eligible to apply for the next round of PPP loans?
PPP loans will be available to first-time qualified Borrowers and to businesses that previously received a PPP loan, if certain requirements are met.
Your business is not eligible if:
Are Borrowers eligible to receive both a new PPP loan and a Second Draw loan under the new legislation?
A: The program is broken out so that you can apply for a:
Some qualified Borrowers may be able to draw eligible unused funds on their first PPP Loan, and then also obtain a Second Draw Loan.
How do I calculate my requested loan amount?
You can receive a loan amount of up to 2.5 times your average monthly payroll costs in the year prior to the loan or the calendar year. This is the same as the previous PPP round.
For First Draw loans, the maximum loan amount allowed is $10 million.
For Second Draw loans, the maximum loan amount allowed is now $2 million. In addition, PPP Borrowers with NAICS codes starting with 72 (lodging and food service) can receive up to 3.5 times their average monthly payroll costs up to $2 million.
For all PPP Loans, seasonal employers may calculate their maximum loan amount based on a 12-week period beginning February 15, 2019 through February 15, 2020.
Seasonal businesses are categorized as businesses that operate for no more than 7 months or 75% of revenue occurs in 6 months or less.
Please note: Individual contractors do not count as employees for purposes of PPP loans as they have the ability to apply for a PPP loan of their own.
What qualifies as a seasonal business?
A: Seasonal businesses, for purposes of PPP Loan application, are those that do not operate for more than 7 months in any calendar year, or those businesses with gross receipts for any 6 months in the prior year less than or equal to 33.33% of the gross receipts for the other 6 months of that year.
How do I prove that I have used the full amount of my first loan?
A: No documentation is required, however, the borrower must certify that the first loan has been used or will have been used. The SBA may request support of this certification in the case of a PPP loan audit.
501(c)(6) organizations, such as chambers of commerce, are also eligible, provided the business does not have more than 300 employees and do not receive more than 15% of the business’ receipts from lobbying activities.
Can I use the same 2019 payroll data for the Second Draw Loan or do I need to use 2020 payroll data?
A: Applicants can use the 2019 or the 2020 payroll data to calculate the loan amount.
For a Second Draw Loan how do I calculate gross receipts or the 25% revenue reduction requirement?
A: Gross receipts includes all revenue in whatever form received or accrued (in accordance with the entity’s accounting method) from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances
What documentation would I need to calculate the 25% reduction in revenue for the periods referenced in the application?
If I received a PPP Loan in 2020, do I include those funds when calculating Gross Receipts if I apply for a Second Draw?
A: 2020 PPP Loan funds should not be included in Gross Receipts, regardless of whether your 2020 PPP Loan was Forgiven or not.
If my gross receipts decreased more than 25% in Q2 of 2020 but were restored by Q4 of 2020, am I eligible for a Second Draw PPP loan?
A: Yes, the legislation signed by Congress states that to be eligible for a Second Draw or new PPP Loan, the Borrower must have experienced a decrease in gross receipts in either quarter 1, quarter 2, quarter 3 or quarter 4 of 2020 relative to the same quarter of 2019. If you compare any quarter of 2020 against the same quarter of 2019 and have a 25% decrease or more, you are eligible.
If I sold assets and have a capital gain, can I exclude this gain from the 25% revenue reduction calculation?
A: Yes. The instructions on the form indicated capital gains are excluded from Gross Receipts.
What are the requirements for potential Forgiveness of this next round of PPP funds?
To be eligible for full loan Forgiveness, PPP Borrowers will have to spend no less than 60% of the funds on eligible payroll costs during the Covered Period. The Borrower may select a Covered Period of 8-weeks up to 24-weeks.
The new legislation includes new cost categories eligible for Forgiveness. The following categories are eligible for Forgiveness:
Keep in mind that the Borrower still must spend at least 60% of the funds on payroll.
If I used a subcontractor due to an outbreak at my office, can I use what I paid out as a payroll expense?
A: Payments to contactors are not considered part of eligible payroll costs. Only payments to employees.
When does the Covered Period begin?
A: The Borrower may select a Covered Period of 8-weeks up to 24-weeks. The Covered Period begins the date of loan disbursement and concludes 8-weeks up to 24-weeks (the length between that timeframe is up to the Borrower).
What do I need to know if I received an EIDL Advance?
A: The new legislation repeals section 1110 (e)(6) of the CARES Act, which requires PPP Borrowers to deduct the amount of their EIDL Advance from their PPP Forgiveness amount. Rules will be issued to ensure Borrowers are made whole if they already received Forgiveness and their EIDL was deducted from their Forgiveness amount. There will no longer be a residual PPP Loan balance for the EIDL Advance
When will Borrowers be able to request Forgiveness for loan under $150,000 using the new streamlined process?
A: On January 19, 2021, the SBA released their new Forgiveness application form for loans of $150,000 or less, called the 3508S. We are currently working with our portal team to implement this into our system.
Will Borrowers who received two PPP Loans (First and Second Draw) under $150,000, but together the loans are greater than $150,000, be eligible to use the new streamlined Forgiveness process?
A: Our interpretation of the new legislation is that the First and Second Draw Loans are separate Loans so the Forgiveness will be issued separately as well.
So, if a Borrower received First and Second Draw Loans under $150,000, they would be eligible for the new streamlined Forgiveness process for both Loans once the SBA releases that application. However, the SBA has yet to release their guidance regarding this new form.
Has PPP Forgiveness been impacted?
The new legislation creates a simplified Forgiveness application for loans of $150,000 or less. Any Borrower with a loan of $150,000 or less is eligible to use this form once released, even if they received a loan in 2020, as long as Forgiveness has not already been issued by the SBA.
Borrowers applying for Forgiveness using the new streamlined application will be required to sign and submit a one-page certification to Rockland Trust, which includes:
The Borrower must also attest that they accurately provided the required certification and complied with program requirements.
Borrowers are required to retain relevant records related to employment for four years and other records for three years, as the SBA may review and audit these loans after Forgiveness has been issued.
Has the taxability of the PPP loan changed?
Yes, the new COVID-19 relief law specifies that expenses covered by the PPP loan will be tax deductible.
Below is the review timeline of the PPP Loan process. It’s important to keep in mind that:
Please stay tuned for more information regarding the latest Paycheck Protection Program round. We encourage you to visit our PPP webpage often. If you have further questions, please reach out to your relationship manager or call our Customer Information Center at 508.732.3826.
Thank you for working with Rockland Trust. Your relationship is truly important to us.
As a Borrower under the Paycheck Protection Program, it is your sole legal responsibility to comply with all laws and regulations applicable to Borrowers under the Small Business Administration Paycheck Protection Program (SBA PPP).
Rockland Trust urges SBA PPP Borrowers to closely review the latest SBA PPP law, regulations and guidelines (Guidelines). The Guidelines can be found on the Small Business Administration and the Department of Treasury websites: www.SBA.gov and www.Treasury.gov. Rockland Trust cautions you that the Guidelines are evolving. The Small Business Administration periodically updates the Guidelines. Some updates modify prior Guidelines, other updates provide further clarification.
Rockland Trust does not provide legal, tax, or accounting advice. Individual facts and circumstances vary from Borrower to Borrower which will impact any answers regarding any interpretation of questions. You should consult with your legal, tax, and accounting advisors to obtain advice regarding your specific situation. Our education materials and communications should be considered in connection with, and are not intended to replace or serve as a substitute for, your close review of the Guidelines, and legal, tax or accounting advice you are urged to obtain from your tax, accounting and legal advisors
Our communications are summaries or excerpts of the Guidelines, and may contain our opinions or interpretations of the Guidelines. There may be interpretations that are valid that differ from our interpretations and opinions. You are cautioned against placing undue reliance on our views and our educational materials.