Paycheck Protection Program “Second Draw” Loans
Preliminary Criteria and Considerations
(Resource synthesized by David Galla, Vice President of People’s Bank)
This section of the legislation reboots the Paycheck Protection Program, called a “PPP second draw” loan, targeted at smaller and harder-hit businesses, with a maximum loan amount of $2 million. This program has been extended through March 31, 2021.
Congress has appropriated approximately $284 billion for this new PPP wave, which contains set-asides (specific dollar amounts) targeted to specific borrower populations, lender types, and administrative operations.
In order to receive a Paycheck Protection Program loan under this section, eligible entities must:
- Employ not more than 300 employees;
- Have used or will use the full amount of their first PPP loan (at this time we understand that customers that have an existing PPP loan do not need to have applied for forgiveness or have their PPP loan forgiven before applying for the second draw); and
- Demonstrate at least a 25 percent reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter. Provides applicable timelines for businesses that were not in operation in Q1, Q2, Q3, and Q4 of 2019. Applications submitted on or after January 1, 2021, are eligible to utilize the gross receipts from the fourth quarter of 2020.
- Eligible entities must be businesses, certain non-profit organizations, housing cooperatives, veterans’ organizations, tribal businesses, self-employed individuals, sole proprietors, independent contractors, and small agricultural co-operatives.
- Ineligible entities include: entities listed in 13 C.F.R. 120.110 and subsequent regulations except for entities from that regulation which have otherwise been made eligible by statute or guidance, and except for nonprofits and religious organizations; entities involved in political and lobbying activities including engaging in advocacy in areas such as public policy or political strategy or otherwise describes itself as a think tank in any public document, entities affiliated with entities in the People’s Republic of China; registrants under the Foreign Agents Registration Act; and entities that receive a grant under the Shuttered Venue Operator Grant program.
In general, borrowers may receive a loan amount of up to 2.5X the average monthly payroll costs in the one year prior to the loan or the calendar year. No loan can be greater than $2 million.
- Seasonal employers may calculate their maximum loan amount based on a 12-week period beginning February 15, 2019 through February 15, 2020.
- New entities may receive loans of up to 2.5X the sum of their average monthly payroll costs.
- Entities in industries assigned to NAICS code 72 (Accommodations and Food Services) may receive loans of up to 3.5X average monthly payroll costs.
- Businesses with multiple locations that are eligible entities under the initial PPP requirements may employ not more than 300 employees per physical location.
- Waiver of affiliation rules that applied during initial PPP loans apply to a second loan.
- An eligible entity may only receive one PPP second draw loan.
- The legislation will include guidance to prioritize underserved communities. The law will direct the SBA Administrator to issue guidance addressing barriers to access to capital for underserved communities no later than 10 days after enactment.
Increased Ability for Paycheck Protection Program Borrowers to Request and Increase in Loan Amount Due to Updated Regulations
- This portion of the legislation requires the SBA to release guidance to lenders within 17 days of enactment that allows borrowers who returned all or part of their PPP loan to reapply for the maximum amount applicable so long that they have not received forgiveness. Additionally, this rule allows borrowers whose loan calculations have increased due to changes in interim final rules to work with lenders to modify their loan value regardless of whether the loan has been fully disbursed, or if Form 1502 has already been submitted.
Extension of the Debt Relief Program
- Resumes the subsidy payment of principal and interest (P&I) on small business loans approved prior to 3/27/2020 and guaranteed by the SBA under the 7(a), 504 and Microloan programs, established under the CARES Act.
- All borrowers with qualifying loans approved by the SBA prior to the CARES Act will receive an additional three month subsidy of P&I, starting February 1, 2021. Going forward, those subsidies will be capped at $9,000 per borrower per month.
- Borrowers classified in “hard hit” industries will also receive another 5 months of Debt Relief payments, so borrowers under certain NICS codes will receive a total of 8 additional months of payments.
- More information on the Debt Relief program and the administration of relief payments will be forthcoming.
The legislation is extensive (text of the legislation is available here ; a good summary of the bill from the Washington Post is available here ).
2020 Top 25 Women In Power Impacting Diversity
It is always such a pleasure each year to introduce DiversityPlus Magazine’s Top 25 Women in Power Impacting Diversity. They are exceptional women in the diversity arena who are recognized for their ongoing efforts and successes in supplier diversity. One of the important aspects of their work is that they focus on diverse suppliers, but in doing so, are also having a positive influence on diversity and inclusion in the workplace and communities. In 2020, the Top 25 Women once again elevated supplier diversity by working to make it the responsibility of everyone in their entire organization and not just sourcing and procurement or category managers. They strive to make everyone aware and knowledgeable of the importance of diverse suppliers to organizational innovation and long-term strategic success.
It took years of relentless communication, but one thing that has become very obvious is the champions of supplier diversity have been successful in garnering the support of senior leaders. The support of the CEO and executive leaders is the backbone of their success. With that support, the Women in Power gained the ability to reach out across their respective organizations to work with decision-makers at all levels in advancing supplier diversity. They work across geographies and across functions, making their approach ideal for a time when organizations are flattening and people network instead of working in siloes.
Each professional named as one of the 25 Women in Power Impacting Diversity completed a questionnaire that asked three questions about their biggest accomplishments, the plan they followed to drive supplier diversity program success, and the strategy for getting senior leadership support. From those three questions flowed a wealth of information that made it clear the Women in Power have developed unique approaches that perfectly fit her organization’s needs. One woman chose a strategic focus on category specific outreach events. Another has strived to align the supplier diversity strategy with the business strategies. Many of them developed methods for holding decision-makers accountable and to increase program visibility within the organization and among community members.
New Studies Prove Minority Business is Ready to Fuel Growth of the US Economy
WASHINGTON, July 15, 2020 /PRNewswire/ — As part of a groundbreaking initiative to raise billions of dollars of growth equity capital focused on ethnically diverse and women-owned business enterprises (DWBEs), the National Association of Investment Companies (NAIC) today announced it has published two related reports that quantify the robust demand for capital by these companies and the significant investment potential within this traditionally overlooked group.
Access to Capital: Accelerating the Growth of Diverse- and Women-Owned Businesses, The Trillion Dollar Opportunity documents the volume of viable DWBEs that are well-positioned to receive growth equity and examines potential solutions to enable the scaling of these businesses. Further, the report quantifies the tremendous impact equal access to growth opportunities for these companies would have on the U.S. economy.
The State of Growth Equity for Minority Business: A River of Capital Flowing Past our Communities analyzes the sweet spot in growth investing, diverse-owned middle-market businesses in the $10 million-$1 billion revenue range. While often thought of as a small niche, there are approximately 20,000 DWBEs in this growing segment that is a predominantly untapped source of investment opportunities.
75 Black-Owned Businesses To Support
The U.S. is home to roughly 2.5 million black-owned businesses, according to the Census Bureau. Although the vast majority are sole proprietorships or small-scale affairs, an increasing number have regional reach and national ambitions. Below, we resurface 10 black entrepreneurs who have recently been featured in Forbes and provide a directory of an additional 65 black-owned businesses to support. It is by no means an exhaustive list: We aren’t including numerous high-profile celebrity entrepreneurs like Oprah Winfrey or Rihanna or the many successful black business owners who sell services to other corporations, like World Wide Technology’s David Steward. These entrepreneurs and owners sell cosmetics, clothing, books, cars and financial products that you can buy. Fewer offer healthcare or consumer tech products, in part, because they lack access to venture funding. If you are interested in learning more about other black-owned businesses, there are a number of apps and directories online, including
Medina Jett Wins 2020 Women in Business Award!
ICSGroup is proud to announce that its Founder and CEO Medina Jett has been recognized as a Woman in Business by the Hartford Business Journal.
The HBJ Women in Business Award recognizes outstanding women in business for their notable contributions within their organizations and communities. The honorees are selected based on their business savvy, confidence, and a strong track record of professional success.
The lack of diversity in the asset management industry is a huge problem in this country. Medina formed ICSGroup to help women- and minority-owned firms, often referred to as Emerging Managers, build institutional quality compliance and operations infrastructures that earn the trust of institutional investors and pave the way for increased capital. In describing the challenges of being a minority and female entrepreneur in the asset management industry, Medina acknowledges the support of her mentor JoAnn Price at Fairview Capital, Robert Greene at the National Association of Investment Companies as well as all ICSGroup’s clients.
2020 CVS Health & RWU Executive Learning Series
We are excited to announce that we are now accepting applications for the 6th Annual Executive Learning Series for Diverse Suppliers. This year’s program will begin on June 11th, 2020, and as in previous years, will consist of a combination of in-person classes, executive coaching, and online learning.
We have worked diligently with our colleagues at the Center for Workforce & Professional Development at the Roger Williams University College to enhance this year’s program, based on feedback from participants in previous years. Included are:
- Refinements to the curriculum and class schedule
- Additional coaching from CVS Health Procurement
- Early access and a walk-through of the mock RFP
We are confident that this program will significantly expand opportunities for all participants – whether with CVS Health or other companies similarly committed to enhancing supplier diversity.
Here is what a previous graduate had to say:
“The learnings from the CVS Executive Learning Series was incredibly powerful and will make a big difference as we continue to move forward in either pivoting into new industries and/or pursuing key clients…I enjoyed not only the material covered but the relationship and friendship that I now share with my fellow cohorts. It’s amazing the way CVS selected because there are synergies based on our collective capabilities and I am pursuing discussions with some, where I think we can go after significant business to deliver on the supplier diversity mission – economic impact in our communicates.” – Betty Manetta, President & CEO of Argent Associates, Inc.
In this spirit, we respectfully request that you distribute the attached letter to your certified diverse supplier members and encourage them to apply. Also, the following documents are attached to serve as additional resources: