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SBA Paycheck Protection Program

Important updates on the Paycheck Protection Program

The Small Business Administration (SBA) has announced that Paycheck Protection Program loan applications are once again re-opened!

 

Important Information

Kinecta is pleased to announce we are once again participating in the Paycheck Protection Program (PPP). The U.S. Small Business Administration, in consultation with the US Department of Treasury, made funds available to Kinecta on Tuesday, January 19th.
 
We have launched a convenient application portal for our members on kinecta.org. In addition, if you are a current Kinecta PPP member, you will receive an email from us as soon as our portal is ready.
 
As part of the Economic Aid Act, Kinecta is able to offer our members access to the following Paycheck Protection Programs:

  1. First Draw Loans (Reopening)

  2. Second Draw Loans

1. PPP First Draw Loans

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.

Full Forgiveness Terms

First Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:

  • Employee and compensation levels are maintained; and

  • The loan proceeds are spent on payroll costs and other eligible expenses; and

  • At least 60 percent of the proceeds are spent on payroll costs.

Who can apply?

Eligible small entities, that together with their affiliates (if applicable), have 500 or fewer employees—including nonprofits, veteran organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors—can apply. Entities with more than 500 employees in certain industries that meet SBA’s alternative size standard or SBA’s size standards for those particular industries can also apply.

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 to apply

Kinecta’s portal is ready! Borrowers can apply for a First Draw PPP Loan. All new First Draw PPP Loans will have the same terms regardless of lender or borrower.

Apply Now

2. PPP Second Draw Loans

The Paycheck Protection Program (PPP) now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan terms as their First Draw PPP Loan.  Second 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.

Terms 

  • Rate 1%

  • 5-year maturity

  • 100% SBA guaranty

  • No collateral required

  • No personal guaranty required

  • Max loan amount $2,000,000

  • Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:

    • Employee and compensation levels are maintained; and

    • The loan proceeds are spent on payroll costs and other eligible expenses; and

    • At least 60 percent of the proceeds are spent on payroll costs.

  Purpose of loan

  • At least 60 percent of the proceeds are spent on payroll costs.

  • No more than 40 percent of the proceeds can be spent on the following non-payroll cost expenses

    • Rent/Mortgage Interest

    • Utilities

    • Covered Operations Expenditures

    • Covered Property Damage

    • Covered Supplier Costs

    • Covered Worker Protection

General eligibility requirements

  • The applicant has realized a reduction in gross receipts of at least 25% between comparable quarters in 2019 and 2020.

  • No more than 300 employees (Please note there are specific requirements depending on the business type).

  • Maximum loan amount of 2.5x of average monthly payroll costs (or 3.5x for NAICS 72 applicants in the Accommodations and Food Services sector) up to $2,000,000.

  • If the applicant previously received a First Draw Paycheck Protection Program Loan and will or has used the full amount only for authorized uses.

Kinecta Business Membership required

Borrowers must apply and be approved for a Kinecta Business Membership prior to loan funding.  However, approval for membership does not mean the PPP loan application is approved. The process for PPP loan approval will be the same and comply with the requirements of the SBA.  Click here to visit our Business Membership page for more information.

Frequently asked questions

For answers to the most commonly questions raised by this round of funding and forgiveness, click here.

This is a general overview. Visit www.sba.gov or www.treasury.gov or the links below for more information and details, including the comprehensive program rules.

Sources

SBA Paycheck Protection Program
SBA First Draw Overview
SBA First Draw Loans
SBA Second Draw Overview
SBA Second Draw Loans
SBA Loan Forgiveness

*Membership requirements apply. Loans are subject to approval based on program guidelines as well as terms and conditions which are subject to change.