Funding Highlights
STATUS UPDATE AS OF JANUARY 20, 2021

On Tuesday, January 19, First Horizon Bank will begin accepting applications for PPP loans. To get started, contact your banker. Your banker will explain the process and provide a link to an online application portal.

If you do not have a banker, contact one of our conveniently located banking centers.

Thank you for your business, patience and trust during this important time in the life of your business.

On December 27, 2020, President Trump approved new COVID-19 economic relief provisions as part of the Consolidated Appropriations Act, 2021. The effects of this Act include:

  • a new round of funding for certain qualifying, existing Paycheck Protection Program (PPP) borrowers
  • opening the PPP to some previously ineligible borrowers
  • authorizing additional business expenditures that qualify for forgiveness
  • other changes to the PPP process

If you have an existing loan – or applied for a PPP loan in the past that was returned – here are some of the notable changes:

  • Expenses that qualify for forgiveness will be broader and will now include:
    • business software costs
    • cloud computing costs
    • payroll services and payroll tracking costs
    • property damage costs relating to civil unrest during 2020
    • payments to suppliers for essential materials
    • operating expenditures
    • work protection costs
    • group life insurance premiums
    • dental, vision and disability insurance premiums
  • The covered period for expenditure of PPP loans for forgiveness purposes is now a variable period of between eight and 24 weeks (selected by the borrower) beginning the day of disbursal of loan proceeds.
    • If a borrower returned some or all of its PPP loan, or did not close a PPP loan due to eligibility concerns, that borrower can re-apply if it determines it is now eligible for a PPP loan or eligible for the entire amount of the PPP loan originally authorized.
    • There will be a simplified forgiveness process for loans of $150k and less:
      • Application will be limited to a single page
      • Borrower will not have to certify more than:
        • number of employees retained
        • estimated amount spent on payroll during the covered period
        • total loan amount
        • PPP requirement compliance records will be maintained for four years if involving employee requirements and three years for all other requirements

Those who have already received a PPP loan may be eligible for another loan which is being referred to as a “second draw loan”. However, these second draw loans have fairly strict requirements.

  • The borrower must exhaust their first PPP loan on or before the date of disbursement of the second draw loan.
  • The borrower may not have more than 300 employees
    • or, if it has a "72" NAICS code, it cannot have more than 300 employees at any single location.
  • The borrower must have had at least a 25 percent reduction in gross receipts in at least one calendar quarter of 2020 as compared to the same calendar quarter in 2019.
  • Entities not in business for all of 2019 may meet other requirements.
  • The maximum amount of the second draw is the lesser of (i) the 2.5 times average monthly payroll for 2019, 2020 or the 12 months ending on the date the loan is made (selectable by the borrower), and (ii) $2,000,000
    • Or, if it has a “72” NAICS code, the multiplier is 3.5 times instead of 2.5 times average monthly payroll.
  • Members of a "corporate group" are limited to an aggregate maximum of $4,000,000 in second draw loans (members of a corporate group were eligible for an aggregate maximum of $20,000,000 in loans under the original PPP).
  • For second draw loans exceeding $150,000, the borrower must provide evidence of the revenue decrease in the form of tax returns, financial statements or other documentation; for loans up to $150,000, the borrower may self-certify revenue decreases in its application but must submit evidence of the decrease prior to forgiveness.

Types of businesses or organizations previously ineligible to apply for a loan but now able to apply include:

  • Nonprofit organizations
    • With less than 300 employees
    • With less than 15% of its receipts from lobbying activities
    • With less than 15% of total activities coming from lobbying
    • With the cost of lobbying activities not exceeding $1mm
  • Housing cooperatives
  • Destination marketing organizations
    • With less than 300 employees
    • With less than 15% of its receipts from lobbying activities
    • With less than 15% of total activities coming from lobbying
    • With the cost of lobbying activities not exceeding $1mm
  • News organizations
    • With less than 500 employees or less than 500 employees at each location
  • A debtor in possession or trustee in bankruptcy upon approval of bankruptcy court

Businesses that are now ineligible to participate in PPP (including both first and second draw loans) going forward include businesses whose stock or other ownership interests are publicly traded and businesses in which a member of Congress or head of any federal executive agency (or his or her spouse) owns a controlling interest.


Although there are many changes as a result of the newly passed Act, some things remain the same for PPP loans

  • No borrower guarantee fees
  • No collateral or borrower guarantee requirements
  • 60% of loan proceeds must be used for payroll

*As of 1/13/21, details are subject to change based on additional guidance from the SBA.