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Dear Metairie Bank Customer and Paycheck Protection Borrower:

Paycheck Protection Program (PPP) loans have been a welcome relief for small businesses across our great country, and Metairie Bank was proud to do everything we could to support our customers and communities locally.  We will work to keep you up to date with any changes and announce the date we can start accepting applications for eligible existing Metairie Bank customers.

As we await final guidance from the SBA on the new programs, we can share the following general information with you at this time. Please understand that this information is intended as a summary; it is not comprehensive and is subject to change.

On Sunday December 27, 2020, the Economic Aid Act became effective, providing additional funding for the Paycheck Protection Program (PPP).  Metairie Bank will continue our participation in this program under the new legislation but only for existing Metairie Bank customers initially.

On Wednesday January 6, the SBA released the initial guidance from the Small Business Administration. The guidance was issued in two Interim Final Rules:

Interim Final Rule on Paycheck Protection Program as Amended by Economic Aid Act

Interim Final Rule on Second Draw Loans

On Friday, January 8, 2021, the SBA announced the reopening of the Paycheck Protection Program (PPP) Monday, January 11, 2021 to accept new applications made only through a small-specified group of community development financial institutions (CDFI).  Metairie Bank is not  a CDFI.

Also released were the new applications for both First and Second Draw Loans.

Updated First Draw Applications
Form 2483 – First Draw Borrower Application 

Updated Second Draw Applications
Form 2483-SD – Second Draw Borrower Application

The amended Paycheck Protection Program (PPP) applies to:

  • Those who did not participate in the initial Paycheck Protection Program (PPP).
  • Those businesses who did have PPP loans in the initial program and wish to adjust the loan amount based on the revised rules under the new, amended PPP and,
  • Those borrowers who did have PPP loans and wish to take a “Second Draw” on those loans.

The SBA intends to open its portal to a broader selection of community banks, including Metairie Bank, no earlier than the week of January 18th.

 

Paycheck Protection Program Summary as amended by the Economic Aid Act of 2021

Who May Apply

Once the application period opens, PPP loans are available to the following:

  1. First Draw qualified borrowers, including
    • Businesses with 500 or fewer employees that are eligible for other SBA 7(a) loans.
    • Businesses in operation on February 15, 2020 and currently in operation.
    • Sole proprietorships, independent contractors, eligible self-employed individuals, Housing Cooperatives, FCC license holders and newspapers, 501(c)6 organizations and Destination Marketing Organizations.
    • Nonprofits (including places of worship).

2. Second Draw qualified borrowers, including

    • Businesses with 300 or fewer employees.
    • Businesses that have used or will use the full amount of their first PPP loan in accordance with program requirements.
    • Businesses that are able to show a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019.
    • Businesses that are not public companies.
    • Businesses currently in operation.

 

Eligible Expenses

PPP loan funds must be spent on at least 60% of a borrower’s payroll expenses, with the remaining 40% eligible for expenses like rent, covered mortgage interest, and utilities. The following expenses may also potentially be forgivable:

  • Operating costs: like software, cloud computing, human resources, or accounting needs.
  • Property damage costs: Due to public disturbances, occurring in 2020 and that are not covered by the borrower’s insurance.
  • Supplier costs: any purchase order or order of goods made prior to receiving a PPP loan that is essential to a borrower’s operations.
  • Worker protection expenditures: any personal protection equipment (PPE; e.g., masks, latex gloves) or property improvements made from March 1, 2020 onward that allowed the borrower’s operation to be considered compliant with regards to health officials’ orders due to the COVID-19 pandemic.

 

Required Loan Documentation and Calculation

First Draw PPP Required Documentation

  • 2019 Annual Payroll documentation; or
  • 2020 Annual Payroll documentation; or
  • Prior 12-months payroll

Most PPP loan borrowers may receive a loan amount of up to 2.5 times their average monthly payroll costs. Loans are still available up to the $10 million maximum from 2020. Some businesses may be eligible to request increases to a PPP loan received in 2020. Additional eligibility rules and guidance from the SBA is expected.

Second Draw PPP Required Documentation

  • 2019 Annual Payroll documentation; or
  • 2020 Annual Payroll documentation; or
  • Prior 12-months payroll
  • Payroll documentation not required if previously used 2019 annual payroll for First Draw PPP loan and you are applying through same lender
  • Revenue reduction documentation can be tax documents, quarterly financial statements, or bank statements
  • Loans under $150,000 do not need to provide documentation during the application. The documentation MUST be provided on or before applying for forgiveness

 

Borrowers classified as a hotel or restaurant (NAICS Code 72) may receive up to 3.5 times their average monthly payroll costs on second draw loans.  Regardless of the type of borrower, the maximum amount of a second draw PPP loan is $2 million.

 The Independent Bankers Association of Texas has provided an easy to read matrix as a resource for any additional questions. matrix of the law’s PPP updates

In the meantime, should you have any questions, please email us at sba@metairiebank.com and we will gladly assist in any way we can. Thanks again for giving us the opportunity to be of service in these trying times.

Sincerely,
Ron E Samford, Jr.