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New PPP Loan Information

Updated 05/05/2021

Please note that the SBA has informed us that they have stopped accepting applications for loans from most lenders, including Selfreliance FCU. At this time, we are no longer able to accept new applications. Should the SBA resume accepting new applications then we will as well.

Updated March 30th, 2021

As of March 30, 2021, the deadline to apply for a PPP loan has been extended to May 31, 2021.

On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the Economic Aid Act) was signed into law. The Economic Aid Act revived the Paycheck Protection Program, and revised certain earlier PPP rules and guidance. On February 22, 2021 additional changes were made to open the PPP to more underserved small businesses.

Selfreliance FCU is participating in the U.S. Small Business Administration Paycheck Protection Program to help and demonstrate continued support for our business members and non-for-profit organizations.

In this round of funding, there are two main categories of loans, as defined by the SBA:

First time borrowers. Eligible businesses that did not receive a PPP loan in 2020 may apply for First Draw Loans.

  • Borrowers can have no more than 500 employees and their business must have been in operation as of February 15, 2020.
  • The loan can be up to 2.5 times the business’ average monthly payroll costs, up to a $10 million loan maximum.

Second-time borrowers. Eligible businesses that previously received a PPP loan may apply for a Second Draw Loan.

  • Businesses can apply for a second PPP loan if they’ve spent or expect to spend the full amount of their first PPP loan before they receive funding for the second loan.
  • Borrowers can have no more than 300 employees.
  • The second loan can be up to 2.5 times the business’ average monthly payroll costs, up to a $2 million loan maximum. Accommodations and Food Services companies with NAICS code 72 can borrow up to 3.5 times the business’ average monthly payroll costs, up to a $2 million loan maximum.
  • All businesses applying for a second PPP loan must show that their business experienced a revenue reduction of 25% or more in one or more calendar quarters of 2020 compared to 2019.
  • Businesses can apply for a second loan whether or not they have requested Forgiveness.
  • In some instances, borrowers may be able to increase the amount of their First Draw Loans instead of applying for Second Draw Loans.

Schedule C Filers. One of the changes from February 22, 2021 is that borrowers that file their taxes using IRS Form 1040, Schedule C can calculate their maximum loan amount using either their net or gross income. This change applies to both First and Second Draw PPP loans.

Please note that for First Draw PPP Loans, if using gross income and reported more than $150,000 in gross income on the Schedule C the SBA may review Borrower’s certification concerning the necessity of the loan and whether the borrower complied with PPP eligibility criteria. If a loan is picked for review, the review will follow the same processes that apply to all other PPP loan reviews.

These revisions are not retroactive.

Paycheck Protection Program Provisions. To incentivize employers to maintain payroll during the crisis, the SBA is providing 100 percent federally backed loans for certain payroll expenses for small businesses, certain nonprofits and self-employed individuals.

  • The interest rate for Paycheck Protection Program loans is set by the SBA and is 1.00%.
  • Loans have a maturity of 5 years.
  • Loan payments will be deferred for borrowers who apply for loan forgiveness until SBA remits the borrower's loan forgiveness amount to the lender. If a borrower does not apply for loan forgiveness, payments are deferred 10 months after the end of the covered period for the borrower’s loan forgiveness (either 8 weeks or 24 weeks).
  • At least 60% of proceeds must be used for payroll costs. Up to 40% may be used for eligible expenses. The list of eligible expenses has been expanded and now includes covered operations expenditures, property damage costs, supplier costs, worker protection expenditure.
  • No collateral or personal guarantees are required.
  • Neither the government nor lenders will charge small businesses any fees.

Full Forgiveness Terms. PPP Loans made to eligible borrowers qualify for full loan forgiveness, including loan interest, if during the 8- to 24-week covered period following loan disbursement:

  • Employee and compensation levels are maintained;
  • 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

How to Apply?

As of 05/05/2021 we have stopped accepting new PPP loan applications. We may resume accepting new applications at the SBA’s directive.

Have Questions? Our team is available to assist with questions about the program.

You can call 773-328-7500 ext. 824 or email us at sbaloans@selfreliance.com

Additional resources available at the Small Business Administration page: www.sba.gov/ppp

Our goal is to fund the loan to your Selfreliance FCU account as soon as possible, though we ask for your patience and understanding as we and the SBA deal with a very large volume of applications.

This information is based on currently available information and is subject to change. We are committed to keeping you informed as we receive additional guidance.

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