Mars Bancorp : Update Regarding Paycheck Protection Program – SBA Interim Rules for PPP Relaunch

The Small Business Administration (SBA) released interim final rules regarding the pending relaunch of the Paycheck Protection Program (PPP). However, the SBA did not announce the date on which it will reopen its portal for applications for this $284 billion round of funding. Links to the information released on the SBA website are below.

The SBA is including rules that provide specific provisions for small businesses and community banks such as Mars Bank. The SBA will:

• accept PPP loan applications only from community financial institutions for at least the first two days when the PPP loan portal re-opens,
• provide $15 billion across first and second draw PPP loans for lending by community financial institutions,
• provide $35 billion for new first draw PPP borrowers, and
• provide $15 billion and $25 billion for first draw and second draw PPP loans, respectively, for borrowers with a maximum of 10 employees or for loans less than $250,000 to borrowers in low-or moderate-income neighborhoods. The SBA has determined that at least 25 percent of each of those set-asides will go to each one of the groups: loans to borrowers with a maximum of 10 employees and loans less than $250,000 to borrowers in low-or moderate-income neighborhoods.

The program will run through March 31, 2021 or until the new funding is exhausted.

‌Information for Second Draw Borrowers

The eligibility requirements for a 'second draw' PPP loan (PPP2) based on current SBA guidance are as follows. The borrower must:

• spend the full amount of the first PPP loan before receiving the PPP2 loan,
• employ no more than 300 employees per physical location,
• demonstrate a 25% or more reduction in gross receipts in any quarter during calendar year 2020 as compared to the same 2019 quarter.

At this time the application and final rules for PPP2 are not yet available on the SBA website. Borrowers considering a PPP2 loan are encouraged to review the program requirements and borrower information fuly before applying for a 'second draw' loan. We will be providing links to the application, instructions and FAQ's when they are available.

Read the guidance on PPP loan access released on January 6, 2021 on the SBA website.

Mars Bank is currently reviewing the legislation and will update our website once the new guidance is finalized. Please visit this page or our business assistance page to stay up-to-date. Please contact your Commercial Banking Relationship Manager or call us at 724-625-1555 x250 with any questions regarding the program.