The second round of Paycheck Protection Program loans for small businesses is set to open soon.
These loans are meant to give a boost to the local and state economies which have been affected by COVID-19 and subsequent shutdowns.
Jarred Jones, executive vice president and chief lending officer at First National Bank and Trust Co. of Weatherford, said all businesses who were open January 15, 2020, are welcome to apply for the program but should do so as soon as possible.
“Get in early,” he said “It will not be very different from the first round.”
Businesses who applied for the first round of PPP loans need to show a 25-percent reduction in gross receipts for a quarter in 2020 compared to the same quarter in 2019. Those who did not apply for the first round will need to bring their 2019 tax return so the bank can calculate their average monthly payroll.
Those who qualify will receive 2.5 times their average monthly payroll, receiving up to $2 million. However, businesses in the food and accommodation industry will receive 3.5 times their average monthly payroll up to $2 million because of the impact COVID-19 has had on those industries.
Jones said hotels, motels and restaurants have been closed or operating at limited capacity for most of 2020. This is due to shut downs and limited travel. People are still traveling but are taking fewer overnight trips, which would result in fewer hotel stays. Local businesses are no exception.
“Motels and restaurants here really have been hurt because traffic off of Interstate 40 has lessened a great deal,” FNB President and CEO Herschel Brewster said. “This will be a big help to our local economy as well as our state. We need to do this.”
Additionally, those applying for the second time must prove they have used everything from the first round. Applicants also must use a financial institute to submit.
Contract labor cannot be included in average salary calculations, they must apply separately.
Those who purchased a business which existed before February 15, 2020, also can apply.
Jones said he believes the portal to submit applications may open as soon as Monday, although a day has not been announced, so it is important to fill them out soon. He said the applications have been simplified to two pages and attached financial statements.
Like the last round, these loans are eligible for forgiveness if 60 percent is used for payroll and the other 40 percent is used on other operating expenses such as rent and utilities. Jones said to date FNB has not had any issues getting loans forgiven.
“We encourage our clients and the people of Weatherford to really look at this because it could help, whether it’s a corporation or sole proprietor,” Brewster said.