Update: The Small Business Administration (SBA) is indicating that it expects funding for the Paycheck Protection Program (PPP) to run out shortly and before its May 31, 2021 deadline. Submitting an application for a PPP loan is not a guarantee that funds will be approved. All applications must be reviewed and approved by both Eastern Bank and the SBA in advance and while funds are still available. For updates, visit www.sba.gov.
Additional program changes have been announced.
- New federal guidelines are available for sole proprietors, independent contractors, and self-employed individuals which may impact how you calculate your maximum loan amount.
- If you have additional questions about the program and your eligibility, please reach out to your banker or email us at PPPupdate@easternbank.com.
- For more information on the SBA’s assistance to small businesses, visit sba.gov/ppp or treasury.gov/cares.
What is the SBA Paycheck Protection Program?
The Small Business Administration (SBA) Paycheck Protection Program (PPP) provides assistance to small businesses affected by the COVID-19 pandemic. The latest government stimulus package commits $284 billion to PPP loans for first-time and second-time PPP borrowers and simplified loan forgiveness.
SBA funds are limited. The deadline to apply is currently May 31, 2021. For your planning, we will continue to accept PPP loan application requests through either May 31, 2021 or if applicable, when the SBA announces its funds have run out.
What is a second draw loan?
The latest PPP program has two loan options available for eligible businesses: a first draw loan for those who haven’t received a PPP loan and a second draw loan for second-time borrowers who already received a PPP loan during the first PPP round. The maximum amount for a second draw loan is $2 million.
Who is eligible for a second draw loan and how does it differ from previous PPP loans?
Eastern is accepting second draw loan requests from both existing and new customers. A customer can be a customer of Eastern Bank of any type (Business, Consumer, Wealth Management, Eastern Insurance Group, etc.) This is an extension of Eastern's program in place during past rounds of PPP loan funding where PPP loan requests were accepted from existing customers as well as new customers meeting certain requirements (eg, located in our service area, etc.).
Second loan requests from Eastern customers who did not secure their original PPP loan with us will be accepted.
Second draw loan applicants must meet the following additional criteria and note that additional conditions may apply:
- Eastern existing or new customer meeting certain requirements (eg, located in our service area, etc.)
- Have fewer than 300 employees
- Have used your entire first-round PPP loan, or will have fully used it prior to distribution of the second draw loan
- Demonstrate a 25% loss in revenue over a certain period
- Business in operation as of February 15, 2020
The following businesses are no longer eligible for a PPP loan:
- Businesses not in operation as of February 15, 2020
- Businesses that receive grants under the new “live venue” program
- Publicly-traded companies
- The U.S. President, Vice President, heads of executive departments, Members of Congress, and their spouses
What documentation do I need to apply for a second draw loan?
Documentation includes:
- Demonstrate 25% or more reduction in gross receipts during a quarter in 2020 relative to the same quarter in 2019 or annually.
- Please provide quarterly financial statements, bank statements or tax returns showing the 25% revenue decline
- Revenue loss documents under $150,000 are not required until loan forgiveness
- Refer to the SBA's guidelines on how to calculate revenue reduction and the documents to provide here.
- Must have used or will use the full amount of their first PPP Loan
- Must have fewer than 300 employees
- Must have been in operation on February 15, 2020
- Business information including TIN and e-mail address
- Average monthly payroll costs; use either 2019 or 2020 payroll documentation
- Details of full-time employee equivalents & associated payroll costs
- Payroll tax filings such as 941, 940, 1099, or payroll processor records
- Details of all owners with greater than 20% ownership stakes
Keep in mind that your application will be submitted entirely online. Paper, hard copy documents will not be accepted; any documentation will be uploaded directly through our online system. * Please help expedite our review by uploading all required documents, even if you previously submitted them with your first PPP loan application.
*Tip: The SBA requires your signature on certain documentation. You will need to arrange signing the necessary documents and uploading them digitally:
1. All financial statements showing the revenue loss must have the first page signed and dated by you as well as subsequent pages initialed.
2. All draft copies of 2020 tax returns that have not been filed must be signed and dated.
In addition, all bank statements must have deposits annotated that they are constituted as gross receipts and which are not.
If I have a current PPP loan, can I apply for a second draw loan?
Small businesses that previously received a PPP loan may be eligible for a second draw loan. Generally, for small businesses to qualify for a second draw PPP loan, they must have been in operation on February 15, 2020, and:
- Have fewer than 300 employees
- Have used your entire first-round PPP loan, or will have fully used it prior to distribution of the second draw loan
- Demonstrate a 25% loss in revenue for a certain period
Additional conditions may apply, and various documentation is needed.
If I received a PPP loan through another lender, can I apply for a second draw loan with Eastern?
Yes. Even if you did not receive your first PPP loan with Eastern, you are eligible to apply for a second draw loan with Eastern. Second draw loan requests are available for existing and new Eastern Bank customers meeting certain requirements (eg, located in our service area, etc.)
When can I submit my application with Eastern for the next round of PPP funding?
Now! The SBA has resumed processing loans for a bank of Eastern’s size. If you are interested in applying for a second PPP loan through Eastern, we invite you to begin your loan request.
When can I expect to hear from you after submitting my loan request?
We expect strong demand for the loan program and are staffing our teams accordingly. We will aim to reply to your request within 5 business days; however, we appreciate your patience and understanding should the volume of requests delay our response time.
The information provided is intended for informational use only and is subject to change.
