According to the Top-line Overview of First Draw PPP loans available at: https://www.sba.gov/document/support-top-line-overview-first-draw-ppp
PAYCHECK PROTECTION PROGRAM FIRST DRAW LOANS
SBA is reopening the Paycheck Protection Program (PPP) for First Draw Loans the week of January 11, 2021. First Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.
Reapplying and Loan Increases
Existing PPP borrowers that did not receive loan forgiveness by December 27, 2020 may: (1) reapply for a First Draw PPP Loan if they previously returned some or all of their First Draw PPP Loan funds, or (2) under certain circumstances, request to modify their First Draw PPP Loan amount if they previously did not accept the full amount for which they are eligible.
How and When to Apply
Borrowers can apply for a First Draw PPP Loan until March 31, 2021, through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, eligible non-bank lender, or Farm Credit System institution that is participating in PPP. All new First Draw PPP Loans will have the same terms regardless of lender or borrower.
Why might you be eligible for additional PPP1 funds? If you remember back in April, small business owners were worried that the program was underfunded. Plus, the rules were not very well defined at first. This combination resulted in some practice owners inadvertently not submitting for the maximum allowable PPP amount.
For example, retirement plan contributions made on behalf of a practice owner might have been omitted from your PPP calculation. When the PPP rules were first issued, the consensus was that S-Corp owners needed to include their retirement plan contributions as part of their compensation capped at $100k. Later iterations of the rules reversed that position, so now retirement plan contributions are ADDED to the $100k salary max for S-Corp owners for the PPP Loan calculation.
Other mistakes might have been made as well. If you feel you didn’t receive the full amount of the PPP1 loan that you were eligible to receive, please reach out to your PPP lender to find out the steps to take to request a modification of your First Draw PPP Loan amount.
The deadline to file for a First Draw PPP modification and/or a Second Draw PPP loan is March 31, 2021.
So I got a ppp1 loan back on april 20th of last year. We have not applied for forgiveness yet.
My brother and I own a partnership LLC and only our w2 employees were calculated in the ppp loan amount. Our partnership compensation was not accounted for.
My brother and I qualify for the maximum eligible amount which I believe is based off of $100k compensation.
We have our loan with TD Bank and they have yet to have any guidance as to how to submit the loan modification. As well, they have stopped accepting forgiveness applications until march while working out the new guidance from the SBA.
I am really getting nervous that ppp1 funds will dwindle and I will miss out on the roughly $42,000 additional funds we are eligible for but TD has no idea how to proceed as of yet.
Any help with this would be appreciated!
Hi Jaryd, You can reapply for PPP1. We’ve reached out to our contact at TD Bank and sent them your post. We’ll update here with their response as soon as we hear from them.
Hi Jaryd, We heard back from our contact at TDBank. As it relates to requesting an increase to or reapplying for a First Draw Loan amount, he said:
“The Economic Aid Act now allows for increases to and reapplications for First Draw Loans from 2020 in certain limited circumstances, which the SBA has outlined in this document:
https://www.sba.gov/sites/default/files/2021-01/5000-20076-508.pdf. Customers should read the guidelines and consult with their attorney, CPA or financial advisor to ensure their loan qualifies before submitting a request to TD Bank.”