1st Draw PPP Loan

Congress passed and President Trump signed amendments to the March 2020 CARES and other laws to create a new round of Paycheck Protection Program Loans to first-time borrowers. Firms and organizations which were eligible in 2020 remain eligible, however eligibility has also been expanded to include other types of organizations. See the eligibility details below. AFNB is now taking PPP First Draw Loan applications.

USE	AMOUNT	RATE	TERMS	FORGIVENESS
	2.5X	1%	5yrs	100%
Payroll-related Rent Mortgage Interest Utilites Expenses Additional Expenses	2.5x average monthly payroll, capped at $2 million	1% fixed Annual Percentage Rate	5 year term total	eligible for 100% forgiveness with approval

AFNB is only processing applications in amounts of $350,000 or less. If you qualify for more, you will need to process your application through another participating PPP Lender.  

Eligibility

To be eligible for a PPP loan in this round, a prospective borrower (together with any affiliates): 

1) Must have been in operation on Feb. 15, 2020; 

2) Must have had employees for which they paid salaries or payroll taxes, have paid independent contractors, or be an eligible self-employed individual, independent contractor, or sole proprietorship with no employees; and

3) Must be one of the following types of organizations:

• A “small business concern” under the applicable SBA revenue-based size standard for the applicant’s industry or the SBA alternative size standard (in brief: together with its affiliates, the entity must have a maximum tangible net worth of not more than $15 million; and its average net income after federal income taxes (excluding any carry-over losses) for the two full fiscal years before the application date must be not more than $5 million)  
• An independent contractor, eligible self-employed individual, or sole proprietor
• One of the following entities with no more than 500 employees (or a relevant SBA employee-based size standard; refer to page 28 of the IFR for details)
  • A business concern
  • A 501(c)(3) tax-exempt nonprofit organization
  • A 501(c)(19) tax-exempt veterans organization
  • A tribal business concern as defined in the Small Business Act
• Housing cooperatives, certain 501(c)(6) organizations (excluding professional sports leagues and organizations with the purpose of promoting or participating in a political campaign or other activity), and eligible destination marketing organizations (the latter two groups subject to specified limitations on lobbying activity) with no more than 300 employees
• Certain news organizations: “A business concern, or any station which broadcasts pursuant to a license granted by the Federal Communications Commission under Title III of the Communications Act of 1934 (47 U.S.C. 301 et seq.), with more than one physical location that employs not more than 500 employees (or the size standard established by the Administrator for the NAICS code applicable to the business concern) per physical location, is eligible for a PPP loan if it: (1) is majority owned or controlled by a business concern that is assigned a NAICS code beginning with 511110 or 5151 or, with respect to a public broadcasting entity (as defined in section 397(11) of the Communications Act of 1934 (47 U.S.C. 397(11))), has a trade or business that falls under such a code.” This group must also make “a good-faith certification that proceeds of the loan will be used to support expenses at the component of the organization that produces or distributes locally focused or emergency information.” 

Allowable Expenses

Permissible expenses have been expanded – from the defined payroll costs and qualified rent, utilities, mortgage interest, and other interest payments – to also include:

• Certain employer-provided group insurance payments: Costs related to the continuation of group health care, life, disability, vision, or dental benefits during periods of paid sick, medical, or family leave, and group health care, life, disability, vision, or dental insurance premiums
• Refinancing of SBA EIDL loans made between Jan. 31 and April 3 of 2020
• Covered operations expenditures: Payments for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records and expenses
• Covered property damage costs: Costs related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance or other compensation
• Covered supplier costs: Payments made to suppliers of goods pursuant to contracts, orders, or purchase orders in effect before the covered period (or, for perishable goods, in effect before or during the covered period), for the supply of goods that "are essential to the operations of the borrower at the time at which the expenditure is made"
• Covered worker protection expenditures: Expenditures made to help the business comply with federal, state, or local requirements or guidelines related to worker and customer safety amid COVID-19, such as the purchase of PPE or facility modifications such as ventilation and filtration systems, physical barriers, and screening capabilities 

Note: At least 60% of the PPP loan proceeds shall e used for payroll costs.