Paycheck Protection Program (PPP) Loans: What You (Still) Need to Know and How OCS Can Help

Oakmont Capital Services can help customers apply for first and second-round Paycheck Protection Program (PPP) loans through our partner Quaint Oak Bank. You might be thinking, “But didn’t big businesses get these loans last year? How will my small business qualify?” We hear you and are here to clarify.

According to the Small Business Administration (SBA), 75 percent of PPP recipients had nine or fewer employees, and 87 percent of all loans (9 out of 10) amounted to $150,000 or less. PPP has supported 51 million American jobs and accounts for 80 percent of small business payroll nationwide.

As of August 2020, the PPP provided 221,000 loans totaling $16.4 billion. However, $130 billion in available funds were unclaimed. So, there’s still money left in the pot to help small businesses!

Was the application process perfect in the beginning? No (we’re sure you heard horror stories). But now, we understand more than we did nearly one year ago and have a 5-step streamlined process in place to help you easily apply for the PPP. Before you contact us to get started, let’s answer some questions you may have regarding the process.

What Is A PPP Loan?

A PPP loan is an SBA-backed loan designed to help small businesses keep their workers on payroll due to the effects of the COVID-19 crisis.

Highlights:

• This program is for any small business with 300-500 employees (including sole proprietorships, independent contractors, and self-employed persons), 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) affected by coronavirus/COVID-19.
• The PPP offers loans up to $10 million and terms up to 10 years.
• This loan has an interest rate of 1%.
• Loans issued prior to June 5, 2020, have a maturity of two years. Loans issued after June 5, 2020, have a maturity of five years.
• If a borrower applies for loan forgiveness, no loan payments will be due until the SBA issues the eligible forgiveness amount back to the lender to satisfy or decrease the amount due by the borrower.  If a borrower does not apply for loan forgiveness, payments will be due 10 months after the end of the loan forgiveness period (either 8 weeks or 24 weeks).
• SBA will forgive loans if all employees are kept on the payroll for eight weeks, and the money is used for payroll, rent, mortgage interest, or utilities.
• PPP has a stripped-down application process for faster funding.
• You can apply through any existing SBA 7(a) lender or any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating, including Oakmont Capital Services.
  • All new First Draw PPP Loans will have the same terms regardless of lender or borrower.
  • No fees will be charged by either the government or lenders.
  • No collateral or personal guarantees are required. 
• There are currently two rounds of PPP loans available: First Draw and Second Draw.

About The First Draw

The first round (or draw) of PPP loans began in April 2020 and closed in August 2020. The SBA re-opened the First Draw process on January 11, 2021, with $130 billion left in the fund, and is scheduled to close it on March 31, 2021. The First Draw option is for businesses that have not yet received a PPP loan.

According to the SBA’s website, “First Draw PPP Loans can be used to help fund payroll costs, including benefits, and may also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.”

The following eligibility parameters are in place for the First Draw, including:

• The business must have been operating as of 02/15/2020.
• The business has no more than 500 employees.
• For any applicants that are sole proprietors, the net income (Line #31 of Schedule C) must be a positive number.

About The Second Draw

The SBA began accepting applications for the second round of PPP loans for those that previously received a First Draw PPP Loan on January 13, 2021,  and is scheduled to close it on March 31, 2021. The Second Draw includes $25 billion for eligible borrowers. The Second Draw PPP loans can’t exceed $250,000 and aim at low-or moderate-income neighborhoods.

The purpose of the Second Draw is the same as the first, utilized for “mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.”

The following eligibility parameters are in place for the Second Draw, including:

• Businesses that previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses.
• The business must have been operating as of 02/15/2020.
• The business must have no more than 300 employees.
• Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
• For any applicants that are sole proprietors, the net income (Line #31 of Schedule C) must be a positive number.

How To Apply

Feel free to reach out to our PPP team, including Sean Eidle and Tracy Schneider, with any questions, concerns or to confirm eligibility.

Below is Oakmont Capital Services’ streamlined 5-step application process:

1. Fill out the online application
2. An OCS PPP Loan Team Member verifies the information
3. Supporting documentation is uploaded into the secure portal
4. SBA processes the application
5. Funds are disbursed

Oakmont Capital Services is here to help our customers, especially small businesses, fuel growth. Please contact us today with any questions or to get started with a PPP loan application. We Make It Possible!

“We’re committed to assisting small businesses apply for PPP loans. We’re responsive because we know how important it is for customers to obtain capital to run their businesses. We’ve heard from some applicants that the ‘big banks’ didn’t respond to them, but we’re happy to help!” – Sean Eidle, CLFP, Sales Coordinator and OCS PPP Loan Team Member