Bank of Jackson Hole is no longer accepting applications for the Paycheck Protection Program.
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Second Draw Loan Eligibility
In order to qualify for a second draw loan, PPP recipients must meet the following criteria:
- Have 300 or fewer employees;
- Experienced a revenue reduction of 25% or greater in 2020 relative to 2019; and,
- Have used or will use the full amount of their first PPP loan on eligible expenses.
Revenue Reduction Requirement
In order to meet the revenue reduction requirement, the borrower must compare the quarterly gross receipts for one quarter in 2020 with the gross receipts for the corresponding quarter in 2019. Alternately, a borrower who has experienced a revenue reduction of 25% or greater in 2020 compared to 2019 may compare annual gross receipts to substantiate its revenue reduction.
The SBA defines gross receipts as, “revenue in whatever form received or accrued (in accordance with the entity’s accounting method) from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances. Generally, receipts are considered “total income” (or in the case of a sole proprietorship, independent contractor, or self-employed individual “gross income”) plus “cost of goods sold,” and excludes net capital gains or losses as these terms are defined and reported on IRS tax return forms. Gross receipts do not include the following: taxes collected for and remitted to a taxing authority if included in gross or total income (such as sales or other taxes collected from customers and excluding taxes levied on the concern or its employees); proceeds from transactions between a concern and its domestic or foreign affiliates; and amounts collected for another by a travel agent, real estate agent, advertising agent, conference management service provider, freight forwarder or customs broker.”
Borrowers should ensure forgiveness amounts received from the First Draw PPP is excluded from gross receipts.
Payroll Cost Calculation
The Second Draw Loan amount equals the lesser of 2.5 months of average monthly payroll or $2 million. Average monthly payroll can be calculated using the following timeframes:
- 2019 calendar year;
- 2020 calendar year; or
- 1 year period before the date on which the loan is made (borrowers who are self-employed including sole proprietors and independent contractors are excluded from this option).
Borrowers assigned a NAICS code beginning with 72 may calculate the maximum loan amount using 3.5 months of average monthly payroll. The maximum loan amount is $2 million.
- No additional payroll documentation is required If the 2019 calendar year figures were used for the First Draw Loan and the Second Draw Loan, and both loans are originated by the same lender. Upon review, the bank may request additional documentation.
- If using any other payroll timeframe, the following documentation is requested, as applicable:
- Form 941s and state quarterly wage unemployment insurance tax reporting forms for each quarter in payroll calculation timeframe; or,
- Equivalent payroll processor records; and
- Evidence of any retirement and health insurance contributions.
- A payroll statement or similar documentation from the pay period that covered February 15, 2020 to show you were in operation on February 15, 2020.
- The following business types should submit the following:
- Self-employed, sole-proprietors and independent contractors – 2019 or 2020 IRS Form 1040 Schedule C
- Partnerships – 2019 or 2020 IRS Form 1065 (including K-1s)
- Farmers and Ranchers – 2019 or 2020 IRS Form 1040 Schedule F
For Revenue Reduction:
- For loans with a principal amount greater than $150,000, documentation to substantiate the revenue reduction may include:
- Relevant tax forms, including annual tax forms; or
- Quarterly financial statements; or
- Bank statements
- For loans with a principal amount less than $150,000, the documentation list above may be submitted at the time of application or when the borrower applies for loan forgiveness.