Beginning today, January 11, 2021, PPP loans are again made widely available to fishing and shoreside small businesses and other eligible entities in the shrimp industry. SBA will begin by processing ‘first draw’ applications (see below).
PPP loans provide an important source of financial relief from the impacts of the pandemic on the shrimp industry. They are relatively easy to apply for and are 100% forgivable if the relatively simple terms are met as set forth in SBA’s Guidance documents. https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program#section-header-5
Very generally, the amount of a PPP loan is based on the average total monthly payroll costs (up to $100,000 annual compensation per employee) multiplied by 2.5. The loan proceeds can be used to make such payroll (including for 1099 crew), as well as to pay a business’s mortgage interest, rent, utilities and certain other expenses. There are a number of specific details regarding loan amounts that apply to different types of small businesses and other qualifying entities which are explained by SBA here: https://www.sba.gov/sites/default/files/2020-12/How-to-Calculate-Loan-Amounts-508_6-26-20.pdf
Again, the loan amount is 100% forgivable if certain simple terms are met. See here: https://www.sba.gov/document/support-frequently-asked-questions-ppp-loan-forgiveness
As part of the recently enacted coronavirus response and relief legislation, small businesses that previously received a PPP loan can secure a ‘second draw’ loan. Please see this link for a description of the new rules that apply to such ‘second draw’ loans which include, for example, a requirement for the entity to have sustained a 25% loss in gross receipts between comparable quarters in 2019 and 2020. https://www.sba.gov/document/support-top-line-overview-second-draw-ppp
And, here is the new ‘second draw’ application form.
The new coronavirus legislation also provides for a simplified ‘first draw’ loan process for qualifying businesses and entities that did not previously receive a PPP loan. Notably, the 25% loss in gross receipts requirement does not apply to ‘first draw’ applications. Here are links to a summary of the requirements for ‘first draw’ applicants and the application form.
Finally, the new coronavirus legislation for the first time expanded PPP eligibility to include 501(c)(6) non-profits, subject to certain restrictions. SSA along with commercial fishery associations nationwide organized an advocacy initiative to secure such eligibility from Congress.
All applicants should consult and work with any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Further, for assistance, applicants can locate and contact an SBA local office here: https://www.sba.gov/local-assistance/find