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Apply for a Paycheck Protection Program (PPP) Loan with MoFi

FAQs about PPP Loans in 2021

Updated 1/15/21

What business types are eligible for PPP?

Businesses eligible for first- and second-time PPP loans include:
  • Sole proprietors
  • Independent contractors
  • Self-employed individuals
  • Private nonprofit organizations or 501(c)(19)s
  • Corporations
  • Veterans’ organizations
  • Tribal businesses
  • Direct marketing organizations
  • Certain nonprofits (the new bill has expanded eligible businesses to include certain 501(c)(6) nonprofit organizations)
  • Seasonal employers (those 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
  • Newspapers, radio stations, and television stations
Businesses must comply with size standards, eligibility criteria, and certain limitations.

Which businesses are eligible for a first PPP loan?

    • Entities with 500 or fewer employees (full-time, part-time, or seasonal)
    • Businesses that were in operation on February 15, 2020 and remain operational
    • Businesses that are not eligible for first- and second-time PPP loans include: Rental income/passive income businesses that file their taxes on a Schedule E.

Which businesses are eligible for a second PPP loan?

A borrower is generally eligible for a second PPP loan if the borrower:
  • Previously received a PPP loan and will use or has used the full amount only for authorized uses. (You do not have to have received forgiveness for the first PPP loan before applying for the second.)
  • Has no more than 300 employees (full-time, part-time, seasonal). (If you have multiple locations, you may not have more than 300 employees per location.)
  • Is able to demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
Businesses that are not eligible for first- and second-time PPP loans include: Rental income/passive income businesses that file their taxes on a Schedule E.

How much am I eligible to receive?

MoFi is providing PPP loans to eligible businesses up to $250,000. If you think you will qualify for greater than $250,000, we encourage you to work with a local bank or credit union. First- and Second-Time PPP Loans:
  • 2.5x average monthly 2019 or 2020 payroll costs
  • For borrowers in the Accommodation and Food Services sector (click here for NAICS 72 to confirm), the maximum loan amount is 3.5x average monthly 2019 or 2020 payroll costs.

What payroll costs are eligible?

  • Compensation (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 employees.

What materials do I need to apply?

Materials will vary based on whether you’re applying for a first or second PPP loan. Please see MoFi’s application forms (available here) for a complete list of materials needed to apply.

How long does the process take, and when will I receive funds?

MoFi will update you within 24 hours of receiving your application with any follow-up requests. Once we submit your application to the SBA, approvals are subject to their timeline, which is currently difficult to predict. We will keep you updated on the status of your loan and provide the estimated funding date as soon as we receive SBA approval. Once you complete your application, we encourage you to keep an eye on your phone and email, as we will be reaching out with questions and requests for any additional information we may need. Your responsiveness will help us move your application forward as quickly as possible. Thank you in advance!

What is the deadline to apply?

MoFi is providing PPP loans on a first-come, first-served basis. The earlier you apply, the better.

Will my PPP loan qualify for SBA forgiveness?

First Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:
  • Employee and compensation levels are maintained;
  • The loan proceeds are spent on payroll costs and other eligible expenses; and
  • At least 60 percent of the proceeds are spent on payroll costs.
Second Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:
  • Employee and compensation levels are maintained in the same manner as required for the First Draw PPP loan;
  • The loan proceeds are spent on payroll costs and other eligible expenses; and
  • At least 60 percent of the proceeds are spent on payroll costs.

To calculate my average monthly payroll number as a sole proprietor, should I use my Schedule C (which reflects net income), or can I use my gross earnings statement?

You should use either your 2019 Schedule C or a draft Schedule C for 2020. 'Draft' means a completed Schedule C form, which does not have to have been submitted to the IRS.

What are the rates and terms for Second Draw PPP Loans if I do not meet the 25% revenue reduction criterion?

  1. The interest rate will be 1%, calculated on a non-compounding, non-adjustable basis.
  2. The term is 5 years.
  3. No collateral will be required.
  4. No personal guarantees will be required.
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