PPP ROUND 2

Dear Republic Bank Fan,

Effective January 19, 2021 the new round of Paycheck Protection Program (PPP) loans goes live. America’s #1 Bank for Service welcomes new and existing customers.

You may apply for a paycheck protection program loan whether or not you participated in
PPP Round 1.

 HOW TO APPLY:  

  • You can apply now HERE.
  • Call your banker directly, for more information.
  • Email the PPP Team at PPPLoanApplication@MyRepublicBank.com.
  • Contact us at 888.875.2265 to learn more about all of our banking products. 

Below is a full description of the new Paycheck Protection Program (PPP). Our success depends on your success.

Yours sincerely,

Vernon W. Hill, II

Chairman, Republic First Bancorp, Inc.


 

1. Am I ELIGIBLE

You are eligible if you are:

  • A small business with not more than 500 employees
  • A small business that otherwise meets the SBA’s size standard
  • A 501(c)(3) with not more than 500 employees
  • An individual who operates as a sole proprietor
  • An individual who operates as an independent contractor
  • An individual who is self-employed who regularly carries on any trade or business
  • A Tribal business concern that meets the SBA size standard
  • A 501(c)(19) Veterans Organization that meets the SBA size standard

 PPP ROUND 2 ENHANCEMENTS 

  • 501(c)(6) organizations, housing cooperatives and destination marketing organizations with 300 or fewer employees.

  • Eligible news organizations with 500 or fewer employees per physical location.

Second Draw Loan Eligibility

  • Previously received a First Draw PPP loan and has or will use all loan proceeds prior to disbursement of the Second Draw PPP loan;

  • The business has no more than 300 employees (per location for NAICS code 72 businesses); and

  • The business demonstrates at least a 25% reduction in 2020 gross receipts when compared with the same prior year quarter.

2. What will lenders be looking for?

Borrowers will need to complete the Paycheck Protection Loan Application (which is available HERE.) and submit payroll documentation

Lenders will also ask you for a good faith certification that:

  1. The uncertainty of current economic conditions makes the loan request necessary to support ongoing operations
  2. The borrower will use the loan proceeds to retain workers and maintain payroll or make mortgage, lease, utility payments and other eligible expenses
  3. Borrower does not have an application pending for a loan duplicative of the purpose and amounts applied for here

 
4. The Applicant was in operation on February 15, 2020, has not permanently closed, and was either an eligible self-employed individual, independent contractor, or sole proprietorship with no employees, or had employees for whom it paid salaries and payroll taxes or paid independent contractors, as reported on Form(s) 1099-MISC.

 5. The Applicant has not and will not receive another loan under the Paycheck Protection Program, section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)) (this does not include Paycheck Protection Program Second Draw Loans, section 7(a)(37) of the Small Business Act (15 U.S.C. 636(a)(37)).

 

  • That the borrower sought and was unable to obtain credit elsewhere. 
  • A personal guarantee is not required for the loan.
  • No collateral is required for the loan.

3. How much can i borrow?

First draw loans can be up to 2.5 x the borrower’s average monthly payroll costs, not to exceed $10 million.

Second draw loans may not exceed $2 million.

NAICS code 72 businesses may use a multiplier of 3.5x.

 

 INCLUDED  Payroll Cost:

1.    For Employers: The sum of payments of any compensation with respect to employees that is a:
•    salary, wage, commission, or similar compensation;
•    payment of cash tip or equivalent;
•    payment for vacation, parental, family, medical, or sick leave
•    allowance for dismissal or separation
•    payment required for the provisions of group health care benefits, including insurance premiums
•    payment of any retirement benefit
•    payment of state or local tax assessed on the compensation of the employee

2. For Sole Proprietors, Independent Contractors, and Self-Employed Individuals: Use the amount on Line 31 of your IRS 1040 Schedule C; if this amount is greater than $100,000 reduce it to $100,000 and divide by 12; multiply the result by 2.5 or 3.5 if you are a NAICS code 72 business.

 EXCLUDED  Payroll Cost:

  1. Compensation of an individual employee in excess of an annual salary of $100,000, as prorated for the period

  2. Payroll taxes, railroad retirement taxes, and income taxes

  3. Any compensation of an employee whose principal place of residence is outside of the United States

  4. Qualified sick leave wages for which a credit is allowed under section 7001 of the  Families First Coronavirus Response Act (Public Law 116–5 127); or qualified family leave  wages for which a credit is allowed under section 7003 of the Families First Coronavirus Response Act

3. NON SEASONAL EMPLOYERS:

Maximum loan =
2.5 x Average total monthly payroll costs incurred during 2019, 2020 or 12 months prior to the loan date 
For businesses not  operational in 2019:
2.5 x Average total monthly payroll costs incurred for January and February 2020

SEASONAL EMPLOYERS:

Maximum loan =

  • 2.5 x Average total monthly payments for payroll costs for any consecutive 12-week period between February 15, 2019 and February 15, 2020.

LOAN TERMS:

  • Payments deferred for up to 10 months from expiration of your chosen covered period.

  • Loan is due in 5 years.

  • 1% Interest Rate.

  • Eligibility
    • Small businesses/organizations including affiliates, with no more than 500 employees or the business meets the applicable revenue based size standard (13 CFR 121.201) for your industry or the SBA alternative size standard.
    • An independent contractor, eligible self-employed individual or sole proprietor.
    • 501(c)3 organizations, veterans organizations under 501(c)(19), a Tribal business under the Small Business Act section 31(b)(2)(C); and employ no more than 500 employees or the size standard in number of employees in 13 CFR 121.201.
    • 501(c)(6) organizations, housing cooperatives and destination marketing organizations with 300 or fewer employees.
    • Eligible news organizations with 500 or fewer employees per physical location.
    • You were in operation on February 15, 2020 and had employees you paid salaries and payroll taxes or paid independent contractors.
  • Ineligible Borrowers
    • Businesses/organizations not in operation on February 15, 2020.
    • Businesses/organizations who receive a grant under the “Shuttered Venue Operator Grants” program (new).
    • Publicly Traded Companies with securities listed on an exchange registered as a national securities exchange (section 6 of SEC Act).
    • Permanently closed business.
    • Household employers.
    • 20% or more owner who is incarcerated or has been convicted of a felony, subject to indictment, criminal information, arraignment or other formal criminal charges; convicted, plead guilty or nolo contender to, or commenced any form of parole or probation for a felony involving fraud, bribery, embezzlement or false statement in a loan application or an application for federal assistance, within the last five years or any other felony within the last year.
    • Businesses or individuals engaged in illegal activity under Federal, state or local law.
    • Owner or business controlled by borrower or other owners has obtained a direct or guaranteed loan from the SBA or any other Federal agency, that is currently delinquent or has defaulted in the last 7 years and caused a loss to the government.
    • Businesses subject to Chinese ownership.
    • Federal Legislative Branch restriction subject to a controlling interest in the borrower.
    • Businesses in Bankruptcy.
    • Hedge funds and private equity firms primarily engaged in investment or speculation.
    • The business is generally ineligible based on 7(a) eligibility requirements under 13 CFR 120.11
  • First Draw Loans
    • The maximum loan amount is the lesser of $10,000,000 capped at $20,000,000 in the aggregate for affiliated corporate entities, or
    • 2.5x the average monthly payroll (NAICS code 72 multiplier is 3.5x).
  • Second Draw Loans
    • A second PPP loan up to $2,000,000 (capped at $4,000,000 in the aggregate for affiliated corporate entities).
    • Available to all eligible businesses with less than 300 employees.
    • Must demonstrate a 25% reduction in gross receipts based on comparable 2019 and 2020 quarters.
    • Enhanced loan amount calculation (3.5x average monthly payroll) for the Hospitality Industry (NAICS 72).
    • Applicant must spend previous PPP loan prior to disbursement of Second Draw Loan.
  • Flexible Covered Period
    • Customize the Covered Period to reflect business needs; select any period between 8 and 24 weeks.
    • Covered Period extended to March 31, 2021.
  • Business Expenses are Eligible for Forgiveness
    • Payroll costs, rent, mortgage interest, utilities
    • PPE including workplace enhancements to meet health and safety guidelines.
    • Software, Cloud computing, human resources and accounting.
    • Property damage due to public disturbances in 2020.
    • Business supplies expensed under normal business operations.
  • Payroll Costs
    • Payroll costs include:
      • Employee compensation (US residence) in the form of
        • Salary, wages, commissions or similar compensation
        • Cash tips or the equivalent based on employer records of past tips or a reasonable, good faith employer estimate.
      • Payment for vacation, parental, family, medical or sick leave
      • Allowance for separation or dismissal
      • Payment for employee benefits
        • Group health care
        • Group life, disability, vision or dental insurance
        • Retirement provision
      • State and local taxes assessed on employee compensation
  • Excluded Payroll Costs
    • Employee compensation whose principal place of residence is outside of the United States.
    • Employee compensation in excess of $100,000 on an annualized basis prorated for the period.
    • Federal employment taxes for the period and the employee’s and employer’s share of FICA.
    • Railroad Retirement Act taxes
    • Employee Income tax withholdings
    • Qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act.
  • Seasonal Employers
    • Defined as a business who operated for no more than 7 months in a calendar year or earned no more than 1/3 of its receipts in any six months of the prior calendar year.
    • Seasonal employers may use any 12-week period between February 15, 2019 and February 15, 2020 to calculate the loan amount.
  • Clarification of Tax Treatment of PPP Loans
    • Gross income does not include PPP loan proceeds forgiven by the SBA.
    • Deductions are allowed for otherwise deductible expenses paid with PPP proceeds that were forgiven.
    • Tax basis of the borrower’s assets will not be reduced as a result of loan forgiveness.
    • Changes apply for tax year 2020 after 27 December 2020.
  • Simplified Loan Forgiveness Application
    • Applicable to loans not more than $150,000.
    • One page in length.
    • Borrower must certify:
      1. Number of employees retained due to the PPP loan
      2. Estimate of the total amount spent on payroll
      3. Original certifications are true
    • Reduces record retention to 4 years for employment records and 3 years for other records.
  • EIDL Advances
    • EIDL Advances will no longer be netted from loan forgiveness amounts.
      1. Borrowers/Banks will be reimbursed for previous reduction including interest.