Paycheck Protection Program

The SBA has announced that banks with less than $1 billion in assets, which includes Bank3, will be able to submit Paycheck Protection Program (PPP) loan applications starting Friday, January 15, 2021. For anyone seeing this message via our website, feel free to follow the link below in order to apply for the PPP loan. If you have questions or need assistance, please email or call 901-302-1253.

Below are details about the new round of PPP loans.


  • Revenue reduction test. To qualify, the business must have evidence of a revenue reduction of 25% or more in any quarter of 2020 when compared to the same quarter in 2019.
    • For example, a borrower with gross receipts of $50,000 in the second quarter of 2019 and gross receipts of $30,000 in the second quarter of 2020 has experienced a revenue reduction of 40 percent between the quarters, and is therefore eligible for a Second Draw PPP loan (assuming all other eligibility criteria are met).
  • Employee size. To qualify the business must have 300 or fewer employees whose principal place of residence is in the United States.


  • Similarly, to the first round of PPP funds, the costs eligible for loan forgiveness in this new round include payroll, rent, covered mortgage interest, and utilities. This new round also makes the following potentially forgivable:
    • Covered worker protection and facility modification expenditures, including personal protective equipment, to comply with COVID-19 federal health and safety guidelines.
    • Expenditures to suppliers that are essential at the time of purchase to the recipient’s current operations.
    • Covered operating costs such as software and cloud computing services and accounting needs.
  • Also similar to the first round of PPP funds, the borrower will have to spend no less than 60% of the funds on payroll over their chosen covered period of 8 or 24 weeks.
  • Borrowers may receive a maximum loan amount of up to 2.5 times their average monthly payroll costs in the year prior to the loan or the calendar year with a maximum total of $2 million. New to this round is the fact that borrowers with NAICS codes starting with 72 (hotels and restaurants) can get up to 3.5 times their average monthly payroll costs, again subject to a $2 million maximum.
  • The guarantee percentage is 100 percent. No collateral will be required. No personal guarantees will be required. The interest rate will be 100 basis points or one percent, calculated on a non-compounding, non-adjustable basis. The maturity is five years.

Payroll Cost Calculation:

  • In general, section 307 of the Economic Aid Act provides that the maximum loan amount for a Second Draw PPP Loan is equal to the lesser of two and half months of the borrower’s average monthly payroll costs or $2 million. For borrowers assigned a NAICS code beginning with 72 (hotels & restaurants) at the time of disbursement, the Economic Aid Act provides that the maximum loan amount is equal to three-and-a-half (3.5) months of payroll costs rather than two-and-a-half (2.5) months.
  • Unlike First Draw PPP Loans, the Economic Aid Act provides that the relevant time period for calculating a borrower’s payroll costs for a Second Draw PPP Loan is either the twelve-month period prior to when the loan is made or calendar year 2019.

 Expanded Streamline Forgiveness:

  • The Form 3508S, a two-page forgiveness application that up until now has allowed qualifying businesses with loans of $50,000 or less to streamline their forgiveness with a simple form, is now eligible for loans up to $150,000.

 Tax Deductibility for PPP Expenses:

  • The bill also specifies that business expenses paid with forgiven PPP loans are tax-deductible. This supersedes original IRS guidance that these expenses could not be deducted.
Below are the links to the Online Portal Application for the 2nd Round of PPP Loans and the related Tutorial.
Bank3 PPP 2nd Round Application Portal:
Bank3 PPP 2nd Round Application Tutorial:

If you have additional questions or concerns, please contact your Bank3 Officer or contact us at 1-833-623-BANK or

*Banking Products and Services are provided by Bank3. Member FDIC. Equal Housing Lender. The above information is accurate as of 1/15/2021 and is subject to change as additional guidance is received from the SBA and regulatory agencies.