PAYCHECK PROTECTION PROGRAM FIRST DRAW LOANS

SBA is reopening the Paycheck Protection Program (PPP) for First Draw Loans the week of

January 11, 2021. First Draw PPP Loans can be used to help fund payroll costs, including 

benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection 

costs related to COVID-19, uninsured property damage costs caused by looting or vandalism 

during 2020, and certain supplier costs and expenses for operations.

Full Forgiveness Terms

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.

Who Can Apply

Eligible small entities, that together with their affiliates (if applicable), have 500 or fewer 

employees—including nonprofits, veterans organizations, tribal concerns, self-employed 

individuals, sole proprietorships, and independent contractors—can apply. Entities with more 

than 500 employees in certain industries that meet SBA’s alternative size standard or SBA’s 

size standards for those particular industries can also apply.

1

Reapplying and Loan Increases

Existing PPP borrowers that did not receive loan forgiveness by December 27, 2020 may: (1) 

reapply for a First Draw PPP Loan if they previously returned some or all of their First Draw 

PPP Loan funds, or (2) under certain circumstances, request to modify their First Draw PPP 

Loan amount if they previously did not accept the full amount for which they are eligible.

How and When to Apply

Borrowers can apply for a First Draw PPP Loan until March 31, 2021, through any existing 

SBA 7(a) lender or through any federally insured depository institution, federally insured credit 

union, eligible non-bank lender, or Farm Credit System institution that is participating in PPP. 

All new First Draw PPP Loans will have the same terms regardless of lender or borrower. A 

list of participating lenders as well as additional information and full terms can be found HERE.

Ensuring Access for All

SBA continues to call upon its lending partners, including Community Development Financial 

Institutions (CDFIs) and Minority Depository Institutions (MDIs), to redouble their efforts to 

assist eligible borrowers in underserved and disadvantaged communities. At least $15 billion is 

being set aside for First Draw PPP loans to eligible borrowers with a maximum of 10 

employees or for loans of $250,000 or less to eligible borrowers in low- or moderate-income 

neighborhoods. To promote access for smaller lenders and their customers, SBA will initially 

only accept loan applications from community financial institutions starting on January 11,

2021. The PPP will open to all participating lenders shortly thereafter.

Visit www.sba.gov or www.treasury.gov for more information and details, including the 

comprehensive program rules.

1 Also eligible to apply for First Draw PPP Loans are businesses with a NAICS Code that begins with 72 (Accommodation and Food 

Services sector) or eligible news organizations with no more than 500 employees per physical location, as well as housing 

cooperatives, 501(c)(6) organizations, or destination marketing organizations with no more than 300 employees.