SBA Lending in a Pandemic

SBA Lending in a Pandemic

PPP Overview

Update: April 8, 2021

The PPP lending deadline has been extended to May 31, and Pinnacle's online application is scheduled to close April 30.

However, the PPP program is close to running out of money. It's likely that the money will run out mid- to late-April. When this happens, we will not be able to submit any more applications to the SBA. This means that if your application is not yet submitted when the money runs out, or if it is still in the error correction process when the money runs out, it will not be funded. Please keep this in mind when applying, and be prepared to talk with your financial advisor about other options if PPP does not work out. 

Thank you for your understanding, and please reach out if you have any questions.


A new round of PPP lending is here. There’s a lot of information to digest, so here are the high points. More details are available on the other tabs of this page.

  • PPP loans are designed for both first-time and second-time PPP borrowers, but not everyone is eligible.
  • The rules are slightly different for first-time borrowers and second-time borrowers.
  • For second-time borrowers, the eligibility requirements are stricter and more targeted to the hardest hit businesses.
    • For example, second-time borrowers are required to show at least a 25 percent revenue reduction.
  • It’s still mostly intended for payroll with a 60/40 split, but the eligible expenses have been expanded so you can spend up to 40 percent of the money on more needs.
  • Most of the other rules, processes and forgiveness requirements are the same, with a few changes.
  • Some of the changes to PPP lending apply retroactively to loans from the spring and summer, as long as they have not already been forgiven.

When can I apply?
The PPP application window opened on Tuesday, Jan. 19, and will remain open until May 31, 2021, or when the money runs out. Pinnacle will stop taking PPP lending applications on April 30. 

How do I apply?
We use an online application, the same system we used for the first round of PPP lending and for PPP forgiveness.

If you worked with Pinnacle for your first PPP loan, your information will be preloaded into the system. When you log in, much of the application will be pre-filled for you. 

If this is your first time applying for a PPP loan, your first time applying for PPP at Pinnacle or your first time working with Pinnacle at all, you can reach out to one of our financial advisors to get started. They will take some basic information and get you pre-loaded into our system so you can more easily apply. If you’re not sure who to reach out to for help, you can search for nearby Pinnacle offices and associates on our Contact Us page.

At the end of the application, you will need to upload any required documents.

Click through the tabs above to see how the process works for different people. 

Will there be a rush for the money?
We expect robust demand for PPP loans. When the application opens, you may need to act quickly. So read through all the tabs on this page to see if you qualify and what you need to do to apply. Review the rules and documentation requirements. Review the sample application so you know what to expect when the time comes.

Remember that the details on this webpage are not comprehensive and are subject to change. As we saw in the spring and summer, guidance from the SBA can change as the program opens and new challenges need to be addressed. We will update this information as we are able.

Thank you for your patience, your understanding and your trust in Pinnacle during this difficult time. We are here for you and will help you through it.  

If you have questions or want to talk through your options, your financial advisor is just a phone call away. If you’re not sure how to reach out to them, you can search for Pinnacle offices and associates on our Contact Us page.


Legal Disclaimer: These materials were created to provide an overview of certain aspects of PPP lending. The information provided herein does not, and is not intended to, constitute legal advice; instead, all information is for general informational purposes only. The information is subject to change and may not constitute the most up-to-date information. It is recommended that you contact your attorney to obtain advice with respect to any particular legal matter, and you should not act or refrain from acting on the basis of information contained herein without first seeking advice from your attorney and/or accountant. Only your individual attorney can provide assurances that the information contained herein—and your interpretation of it—is applicable or appropriate to your particular situation. All liability with respect to actions taken or not taken based on the contents hereof are hereby expressly disclaimed. The content herein is provided “as is”; no representations are made that the content is error-free.

Second-time PPP Borrowers

Click here to download a sample of the PPP Second Draw Loan application.
Remember: Our application will be all online. Please do not fill out a paper application.

Click here to download the calculator tool to determine your loan amount.
Remember: You will only use this if you payroll calculations are changing from the first round or if you are new to Pinnacle.

Note: If you are taking a second PPP loan, you can use the same payroll data that you used for your first PPP loan—regardless of what’s happened to your payroll levels since then.


How will it work for me?

Here’s a brief rundown of possible scenarios and what you will need to do.

I received a PPP loan from Pinnacle in the spring or summer and will use the same payroll calculations for my second loan. 

  • You will follow the PPP Second Draw Application rules. 
  • Your process will be easy. Log into the online application, and most of your information will be pre-filled. You should have to update very little.  
  • If your second loan is for $150,000 or less, you don’t have to upload any documents right now. But please be prepared to show documented proof of the revenue reduction and more requirements when it’s time for forgiveness. 

I received a PPP loan from Pinnacle in the spring or summer, but my payroll calculations will change. 

  • You will follow the PPP Second Draw Application rules. 
  • Complete the calculator tool to determine your loan amount. 
  • Log into the online application. Most of your information will be pre-filled. You will have the opportunity to edit the amounts to reflect your new calculations. 
  • You’ll need to upload documentation to verify your calculations.  
  • If your second loan is for $150,000 or less, you don’t have to upload any documents related to the revenue reduction right now. But please be prepared to show it when it’s time for forgiveness. 

I received a PPP loan from another bank in the spring or summer. 

  • You will follow the PPP Second Draw Application rules. 
  • Contact your financial advisor. They will help you get ready to use the online application.  
  • While you wait, complete the calculator tool to determine your loan amount. 
  • Once your financial advisor gives you the go ahead, log into and complete the online application.
  • You’ll need to upload documentation to verify your calculations.  
  • If your second loan is for $150,000 or less, you don’t have to upload any documents related to the revenue reduction right now. But please be prepared to show it when it’s time for forgiveness. 

PPP Second Draw Rules

Eligibility
Most businesses and nonprofits that were eligible for the first round are also eligible now, including:

  • Veterans’ organizations, tribal businesses, self-employed, sole proprietors, independent contractors, small agricultural co-ops and some nonprofits including religious institutions
  • Housing cooperatives, 501(c)(6)s, direct marketing groups and some other organizations are now eligible for a first-time or second-time PPP loan.
  • For a full list of eligible entities, see page 20 of the SBA’s latest guidance.

Who is ineligible?

  • All entities that were ineligible in the first round of PPP
  • All publicly owned companies
  • Entities involved in political or lobbying activity
  • Entities organized under the laws of the Peoples Republic of China or with ties to the Peoples Republic of China
  • Those registered under the Foreign Agents Registration Act
  • Entities that receive a grant under the Shuttered Venue Operator Grant Program
  • Any entity not in operation on or before Feb. 15, 2020
  • An entity that is permanently closed
  • Any entity in which the President, the Vice President, the head of any executive department or a member of Congress, or the spouse of any of these individuals owns more the 20%

More Eligibility Requirements

  • You must have no more than 300 employees.
  • For restaurants, hotels and other businesses that fall under NAICS code 72, there is no total employee cap, though you cannot have more than 300 employees per physical location.
  • You must demonstrate a 25 percent revenue reduction. You have a choice of which periods to use for the comparison:
    • You can compare any single quarter of 2020 to the same quarter in 2019, showing a 25 percent revenue reduction, or
    • You can compare all of 2020 to all of 2019, showing a 25 percent revenue reduction.
    • We do not yet know what documentation the SBA will require to show this reduction, just that they want to see a reduction in “gross receipts.”
    • For loans of more than $150,000, the SBA will require documented proof of this revenue reduction at the time you apply for the loan.
    • For loans of $150,000 or less, the SBA does not require this documentation at the time of loan application. They will, however, require it for forgiveness.
    • View the SBA's full guidance on the revenue reduction requirement.
  • You must have already spent or will spend the full amount of your first PPP loan before the date that the proceeds of your second PPP loan is disbursed to you.
  • Your first loan must not be under review at the SBA. You cannot receive a second loan until the review of the first is resolved.

Loan Amounts

  • Loan amounts can be up to 2.5x average monthly payroll costs during the year prior to the loan or the previous calendar year but not to exceed $2 million.
  • Entities in industries assigned to NAICS code 72 (which includes hotels and restaurants) may receive up to 3.5x average monthly payroll costs but not to exceed $2 million.
  • Seasonal employers calculate their maximum loan amount based on a 12-week period of their choosing between Feb. 15, 2019 and Feb. 15, 2020.
  • Loans can be no more than $4 million for business that are a part of a single corporate group.

Loan Terms

  • 1 percent interest rate
  • Five-year maturity
  • 6 months of deferred payments, though interest will accrue over this period
  • No prepayment penalties or fees
  • No collateral or personal guarantees required

Eligible Expenses
This applies to PPP loans made in the first wave and going forward. It does not apply to loans that are already forgiven. To be eligible for full forgiveness:

  • At least 60 percent must be spent on payroll expenses.
    • Payroll costs now specifically include employer-provided group insurance benefits, including life, disability, vision or dental.
  • Up to 40 percent can be spent on other allowed expenses.
    • Mortgage interest and lease payments
    • Utility costs
    • Interest payments on any other debt obligations incurred prior to Feb. 15, 2020
    • Refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020
    • Operations expenses including software, cloud computing, human resources and accounting needs
    • Property damage due to public disturbances during 2020 not covered by insurance
    • Supplier costs pursuant to a contract, purchase order or order for goods that was in effect prior to taking the loan and was essential to operations at the time
      • Supplier costs for perishable goods can be made before or during the life of the loan.
    • Worker protection expenses like PPE and other adaptive costs to help comply with federal health and safety guidelines or equivalent state and local guidance related to COVID-19

Covered Period
This applies to PPP loans made in the first wave and going forward. It does not apply to loans that are already forgiven.

  • All borrowers can choose either an 8-week or 24-week covered period.
  • In order to be eligible for full forgiveness, you must maintain full employee and compensation levels during this covered period.
  • We will assume you choose the 24-week period for that loan unless you inform your financial advisor in writing that you want to take the 8-week period.
  • The choice or whether you take the 8- or 24-week covered period will be made at the time you ask for forgiveness.

If you have questions or want to talk through your options, your financial advisor is just a phone call away. If you’re not sure how to reach out to them, you can search for Pinnacle offices and associates on our Contact Us page.


Legal Disclaimer: These materials were created to provide an overview of certain aspects of PPP lending. The information provided herein does not, and is not intended to, constitute legal advice; instead, all information is for general informational purposes only. The information is subject to change and may not constitute the most up-to-date information. It is recommended that you contact your attorney to obtain advice with respect to any particular legal matter, and you should not act or refrain from acting on the basis of information contained herein without first seeking advice from your attorney and/or accountant. Only your individual attorney can provide assurances that the information contained herein—and your interpretation of it—is applicable or appropriate to your particular situation. All liability with respect to actions taken or not taken based on the contents hereof are hereby expressly disclaimed. The content herein is provided “as is”; no representations are made that the content is error-free.

First-time PPP Borrowers

Click here to download a sample of the PPP First Draw Loan application.
Remember: Our application will be all online. Please do not fill out a paper application.

Click here to download the calculator tool to determine your loan amount.
You must complete this calculator tool if this is your first PPP loan.


How will it work for me?

Here’s a brief rundown of possible scenarios and what you will need to do.

I did not receive a PPP loan in the spring or summer. 

  • You will follow the PPP First Draw Application rules. 
  • Contact your financial advisor. They will help you get ready to use the online application.  
  • While you wait, complete the calculator tool to determine your loan amount. 
  • Once your financial advisor gives you the go ahead, log into and complete the online application.
  • You’ll need to upload documentation to verify your calculations.

 

PPP First Draw Rules

Eligibility

  • All businesses–including nonprofits, veterans organizations, Tribal business concerns, sole proprietorships, self-employed individuals and independent contractors–with 500 or fewer employees can apply.
    • This includes housing cooperatives, 501(c)(6)s, direct marketing groups and some other organizations.
  • Businesses in certain industries can have more than 500 employees if they meet applicable SBA employee-based size standards for those industries. View those size standards on the SBA website.
  • For this program, the SBA’s affiliation standards are waived for entities:
    • in industries assigned to NAICS code 72
    • that receive financial assistance from small business investment companies licensed by the SBA
  • You must have been in operation on Feb. 15, 2020.

Who is ineligible?

  • All publicly owned companies
  • Any entity not in operation on or before Feb. 15, 2020
  • An entity that is permanently closed
  • Entities that receive a grant under the Shuttered Venue Operator Grant Program
  • Any entity in which the President, the Vice President, the head of any executive department or a member of Congress, or the spouse of any of these individuals owns more the 20%

Loan Amounts

  • Up to 2.5x your average monthly payroll costs from the last year
  • All loans capped at $10 million
  • Payroll costs will be capped at $100,000 annualized for each employee
  • Seasonable and new businesses will use different time periods for this calculation

Loan Terms

  • 1 percent interest rate
  • Five-year maturity
  • 6 months of deferred payments, though interest will accrue over this period
  • No prepayment penalties or fees
  • No collateral or personal guarantees required

Eligible Expenses
To be eligible for full forgiveness:

  • At least 60 percent must be spent on payroll expenses.
    • Payroll costs now specifically include employer-provided group insurance benefits, including life, disability, vision or dental.
  • Up to 40 percent can be spent on other allowed expenses.
    • Mortgage interest and lease payments
    • Utility costs
    • Interest payments on any other debt obligations incurred prior to Feb. 15, 2020
    • Refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020
    • Operations expenses including software, cloud computing, human resources and accounting needs
    • Property damage due to public disturbances during 2020 not covered by insurance
    • Supplier costs pursuant to a contract, purchase order or order for goods that was in effect prior to taking the loan and was essential to operations at the time
      • Supplier costs for perishable goods can be made before or during the life of the loan.
    • Worker protection expenses like PPE and other adaptive costs to help comply with federal health and safety guidelines or equivalent state and local guidance related to COVID-19

Covered Period

  • All borrowers can choose either an 8-week or 24-week covered period, which begins on the day you receive your funds.
  • In order to be eligible for full forgiveness, you must maintain full employee and compensation levels during this covered period.
  • We will assume you choose the 24-week period for that loan unless you inform your financial advisor in writing that you want to take the 8-week period.
  • The choice or whether you take the 8- or 24-week covered period will be made at the time you ask for forgiveness.

If you have questions or want to talk through your options, your financial advisor is just a phone call away. If you’re not sure how to reach out to them, you can search for Pinnacle offices and associates on our Contact Us page.


Legal Disclaimer: These materials were created to provide an overview of certain aspects of PPP lending. The information provided herein does not, and is not intended to, constitute legal advice; instead, all information is for general informational purposes only. The information is subject to change and may not constitute the most up-to-date information. It is recommended that you contact your attorney to obtain advice with respect to any particular legal matter, and you should not act or refrain from acting on the basis of information contained herein without first seeking advice from your attorney and/or accountant. Only your individual attorney can provide assurances that the information contained herein—and your interpretation of it—is applicable or appropriate to your particular situation. All liability with respect to actions taken or not taken based on the contents hereof are hereby expressly disclaimed. The content herein is provided “as is”; no representations are made that the content is error-free.

Application and Document Requirements

Application

The SBA has separate applications for first-time and second-time borrowers.

If you intend to apply for PPP through Pinnacle, please do not fill out a paper copy of the application. When the window opens and we are allowed to take applications, we will use an online system that is easier, more streamlined and will allow for faster processing.

See a sample of the PPP lending application for first-time borrowers.

See a sample of the PPP lending application for second-time borrowers.

See the calculator tool you will use to find your loan amount.

 

Documentation

There are distinct application requirements depending on a number of factors. Take a look at the details listed below and find the information that best describes your scenario. In addition to what’s listed below, we may request additional documentation if further review is needed for loan calculation.

If you are:

  • applying for a PPP loan for the first time;
  • applying for a PPP loan from Pinnacle for the first time; or
  • applying for a PPP loan using a different monthly payroll amount than you used in your first PPP loan

You are required to provide documentation to support the loan amount you’re requesting. That may include, but is not limited to, the following:

  • a completed application, including required certifications;
  • proof of being in operation and evidence of employees on or around February 15, 2020;
  • information supporting payroll expenses, which could include Form 941s, Unemployment Tax Returns, Payroll registers; and
  • evidence of expenses incurred for approved medical and insurance expenses.

In the case of self-employed individuals, you will need to provide income statements, Schedule C’s, and/or 1099-MISC or K-1s that were issued to the borrower.

To help us review of your application and verify the information, please also include your calculations, which you can get by using the calculator tool. Additional document information will also be found in the calculator.

If this is your second PPP loan with Pinnacle:
No additional payroll documentation is needed if you:

  • used calendar year 2019 figures to determine your first PPP loan amount and
  • used calendar year 2019 figures to determine your second draw PPP loan amount (instead of calendar year 2020)

All Second-time Borrowers:
You must be able to demonstrate a 25 percent revenue reduction to be eligible for a second PPP loan. You have a choice of which periods to use for the comparison:

  • You can compare any single quarter of 2020 to the same quarter in 2019, showing a 25 percent revenue reduction, or
  • You can compare all of 2020 to all of 2019, showing a 25 percent revenue reduction.
  • What counts as “gross receipts”?

Forgiveness of your first PPP loan is not counted as part of your revenue for this requirement.

If your loan request is $150,000 or less, you are not required to show documentation of this reduction when you apply. You will, however, be required to show it when you apply for forgiveness.

If your loan request is more than $150,000, you will be required to provide documented proof of the revenue reduction at the time of loan application.

Certifications

All PPP borrowers must certify that:

  • you were in operation on Feb. 15, 2020, you have not permanently closed and you are eligible under the rules of the program
  • current economic uncertainty makes the loan necessary to support ongoing operations
  • the money will be used to maintain payroll and pay other eligible expenses
  • you understand forgiveness depends on spending the money on eligible expenses and documentation may be required to prove it
  • you have not and will not receive another PPP loan (first-time borrowers only)
  • you did not receive a Shuttered Venue Operator Grant from the SBA
  • you meet the ownership requirements related to certain members of government
  • you are not a publicly-owned company

If this is your second PPP loan, you must also certify that you:

  • you had a reduction in gross receipts in excess of 25%
  • have not or will not receive another second draw loan
  • have or will use the entire funds before second draw funds are disbursed on eligible expenses.
  • are not affiliated with China
  • are not required to submit a registration statement under section 2 of the Foreign Agents Registration Act of 1938
  • are not involved in political or lobbying activities

These are summaries of the certification requirements. To see the full certifications, click the sample application links at the top of this page.

If you have questions or want to talk through your options, your financial advisor is just a phone call away. If you’re not sure how to reach out to them, you can search for Pinnacle offices and associates on our Contact Us page.


Legal Disclaimer: These materials were created to provide an overview of certain aspects of PPP lending. The information provided herein does not, and is not intended to, constitute legal advice; instead, all information is for general informational purposes only. The information is subject to change and may not constitute the most up-to-date information. It is recommended that you contact your attorney to obtain advice with respect to any particular legal matter, and you should not act or refrain from acting on the basis of information contained herein without first seeking advice from your attorney and/or accountant. Only your individual attorney can provide assurances that the information contained herein—and your interpretation of it—is applicable or appropriate to your particular situation. All liability with respect to actions taken or not taken based on the contents hereof are hereby expressly disclaimed. The content herein is provided “as is”; no representations are made that the content is error-free.

Go to the Application

Update: April 8, 2021

The PPP lending deadline has been extended to May 31, and Pinnacle's online application is scheduled to close April 30.

However, the PPP program is close to running out of money. It's likely that the money will run out mid- to late-April. When this happens, we will not be able to submit any more applications to the SBA. This means that if your application is not yet submitted when the money runs out, or if it is still in the error correction process when the money runs out, it will not be funded. Please keep this in mind when applying, and be prepared to talk with your financial advisor about other options if PPP does not work out. 

Thank you for your understanding, and please reach out if you have any questions.


Click here to go to the application.

When can I apply?
The PPP application window opened on Tuesday, Jan. 19, and will remain open until May 31, 2021, or when the money runs out. Pinnacle will stop taking PPP lending applications on April 30. 

How do I apply?
We use an online application, the same system we used for the first round of PPP lending and for PPP forgiveness.

If you worked with Pinnacle for your first PPP loan, your information will be preloaded into the system. When you log in, much of the application will be pre-filled for you. 

If this is your first time applying for a PPP loan, your first time applying for PPP at Pinnacle or your first time working with Pinnacle at all, you can reach out to one of our financial advisors to get started. They will take some basic information and get you pre-loaded into our system so you can more easily apply. If you’re not sure who to reach out to for help, you can search for nearby Pinnacle offices and associates on our Contact Us page.

At the end of the application, you will need to upload any required documents.

Click through the tabs above to see how the process works for different people. 

If you have questions or want to talk through your options, your financial advisor is just a phone call away. If you’re not sure how to reach out to them, you can search for Pinnacle offices and associates on our Contact Us page.


Legal Disclaimer: These materials were created to provide an overview of certain aspects of PPP lending. The information provided herein does not, and is not intended to, constitute legal advice; instead, all information is for general informational purposes only. The information is subject to change and may not constitute the most up-to-date information. It is recommended that you contact your attorney to obtain advice with respect to any particular legal matter, and you should not act or refrain from acting on the basis of information contained herein without first seeking advice from your attorney and/or accountant. Only your individual attorney can provide assurances that the information contained herein—and your interpretation of it—is applicable or appropriate to your particular situation. All liability with respect to actions taken or not taken based on the contents hereof are hereby expressly disclaimed. The content herein is provided “as is”; no representations are made that the content is error-free.

PPP Webinar

We recently hosted webinars to go through the details of PPP lending and take questions. A recording is available above, and we will post details for any future webinars on this page.

For webinars on PPP Forgiveness, click here.

If you have questions or want to talk through your options, your financial advisor is just a phone call away. If you’re not sure how to reach out to them, you can search for Pinnacle offices and associates on our Contact Us page.


Legal Disclaimer: These materials were created to provide an overview of certain aspects of PPP lending. The information provided herein does not, and is not intended to, constitute legal advice; instead, all information is for general informational purposes only. The information is subject to change and may not constitute the most up-to-date information. It is recommended that you contact your attorney to obtain advice with respect to any particular legal matter, and you should not act or refrain from acting on the basis of information contained herein without first seeking advice from your attorney and/or accountant. Only your individual attorney can provide assurances that the information contained herein—and your interpretation of it—is applicable or appropriate to your particular situation. All liability with respect to actions taken or not taken based on the contents hereof are hereby expressly disclaimed. The content herein is provided “as is”; no representations are made that the content is error-free.