Overview
Application For The First Draw IFR Loan
The First Draw IFR includes changes to PPP due to the passage of the Economic Aid Act and also restates and consolidates several prior interim final rules.5 SBA consolidated these IFRs to provide a single IFR to consult on all aspects related to First Draw PPP Loans.6
Unlike PPP loans made prior to August 8, 2020, new first-time applicants, including farmers and ranchers, will have the ability to use either 2019 or 2020 when calculating their maximum loan amount.7 The maximum loan amount remains the lesser of 2.5x average monthly payroll or $10 million.
Covered eligible expenses are expanded and now include:
- Payroll costs
- Rent
- Mortgage interest
- Utilities
- Operations expenditures
- Property damage costs
- Supplier costs, and
- PPE (worker protection) expenditures.
Eligibility Requirements for First Draw PPP Loans
Eligible applications that did not receive a PPP loan prior to August 8, 2020 will have the ability to apply for a PPP First Draw Loan on or before March 31, 2021. Businesses will need to prove they were in operation on February 15, 2020, are not permanently closed, and are not excluded based on other ineligibility criteria.8
In addition to previous eligibility criteria, the Economic Aid Act included expanded eligibility for: • select 501(c)(6) organizations
- Housing cooperatives,
- Destination marketing organizations, and
- Select nonprofit news organizations with fewer than 500 employees that have a NAICS code beginning with 511110 or 5151.9
501(c)(6) organizations are eligible to receive a PPP Loan provided they do not derive more than 15% of their revenue from lobbying, lobbying activities make up less than 15% of the business’ total activity, lobbying activities did not exceed a cost of $1,000,000 during 2019, and the organization has fewer than 300 employees.10
For purposes of expanded eligibility, housing cooperatives are defined in section 216(b) of the Internal Revenue Code.11
Destination Marketing Organizations are eligible to receive a PPP Loan provided they do not derive more than 15% of their revenue from lobbying, lobbying activities make up less than 15% of the business’ total activities, lobbying activities did not exceed a cost of $1,000,000 during 2019, and the organization has fewer than 300 employees.12
Loan Increase Request for First Draw PPP Loans
Loan increases are allowed for partnerships if the original PPP loan did not include compensation for partners, for seasonal employers, and in other circumstances laid out below.13
Other PPP borrowers may be eligible to reapply or request an increase to their PPP loan amount if a borrower:
- Returned all of a PPP loan and is eligible under current PPP rules; • returned part of a PPP loan; or
- Did not accept the full amount of an approved PPP loan.14
If a borrower receives an increased PPP loan, a lender may make a one-time disbursement of the increased funds within 10 calendar days of the approval of the increase.
Please reference full guide and outline of here: PPP Loan eligibility and requirements.
Additionally, please find the full list of required here: PPP Application Documents.