Paycheck Protection Program Updates

Triumph Updates

January 19, 2021

The federal government has recently executed legislation, the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act, providing additional Paycheck Protection Program (PPP) funding up to $284 million and altering forgiveness rules for currently outstanding PPP loans.  For complete information regarding the requirements and details, please refer to US Department of the Treasury website at https://home.treasury.gov/news/press-releases/sm1230 .

In 2020, TBK Bank was proud to have been able to help over 2,000 local small businesses to receive a total of $227 million in funding in the communities we serve during the first round of PPP loans.  On Wednesday, January 20th, we will start accepting applications for First and Second Draw PPP loans from Triumph Bancorp clients.

PPP Loan Rates and Terms

  • All PPP loans have a fixed interest rate of 1%. The new bill has clarified that the interest rate is non-compounding and non-adjustable for first- and second-draw loans.
  • The maturity of a PPP loan is five years.
  • The deferral period lasts until the loan forgiveness amount is determined.
  • First Draw Loans-$10,000,000 maximum
  • Second Draw Loans – Borrowers may still receive loans up to 2.5 times the amount of average monthly payroll costs up to $2,000,000.  Entities in industries assigned to NAICS code 72 (Accommodations and Food Services) may receive loans up to 3.5 times the amount of average monthly payroll costs up to $2,000,000.
  • Please refer to the US Department of the Treasury website for additional details.

Second Draw PPP Loan Eligibility

If you are applying for a second PPP loan, you must be a business with 300 or fewer employees and meet the following or are otherwise eligible under the PPP guidelines.

  • You must have used the full amount of your first PPP loan on eligible expenses before any Second Draw PPP loan can be advanced.
  • You demonstrate at least a 25% reduction in gross receipts in any quarter of 2020 relative to the same 2019 quarter gross receipts during the first, second, third, or, fourth quarter.
  • Businesses that were in operation on February 15, 2020 will be eligible for an initial PPP loan or a second draw loan.
  • Sole proprietors
  • Independent contractors
  • Self-employed individuals
  • Certain non-profits (the new bill has expanded eligible businesses to include certain 501(c)(6) non-profit organizations)
  • Seasonal employers: the new bill has clarified the definition of these to be businesses that operate no more than seven months within a year or earn no more than a third of gross receipts
    within a six-month period
  • Faith-based organizations that have less than 150 employees
  • Housing cooperatives that employ less than 300 people. 

PPP Loan Forgiveness

The loan forgiveness process is simplified for borrowers with PPP loans of $150,000 or less.  If you have a PPP loan of $150,000 or less, or if you are concerned about qualifying for full forgiveness, you may want to consider waiting to apply for forgiveness. The simplified forgiveness application for loans $150,000 or less should be released by SBA by January 20th.  Any information will be updated on our website upon release of the SBA.   While expenses eligible for forgiveness still require a 60/40 split of payroll costs/other eligible expenses, certain group health insurance benefits paid by employers are now included in payroll costs (for example, life insurance and disability benefits, vision and dental insurance).     In order for the loan to be eligible for forgiveness, the funds must be used within the covered period.  If the borrower has already received a PPP loan from the first round, nothing has changed. The Covered Period remains the same.   To achieve full forgiveness, 60% of the PPP loan must still be used for eligible payroll expense.  Eligible expenses for forgiveness have been expanded for PPP loans that have not yet been forgiven and for “second draw” second PPP loans.

If you have any questions or are looking for additional assistance options, please contact your TBK Bank Relationship Manager. Please also feel free to email us at sbataskforce@tbkbank.com if you have questions or need to know who your assigned Relationship Manager.  We will continue to post additional information to the web site when available.  Thank you.