Second Round Open of Paycheck Protection Program
The U.S. Small Business Administration (SBA), in consultation with the Treasury Department, has re-opened the Paycheck Protection Program (PPP) for new borrowers and certain existing PPP borrowers. To promote access to capital in underserved communities, only community financial institutions could initially make PPP Loans starting on January 11. The PPP is now open to all participating lenders.
This round of the PPP continues to prioritize millions of Americans employed by small businesses by authorizing up to $284 billion toward job retention and certain other expenses through March 31, 2021, and by allowing certain existing PPP borrowers to apply for a Second Draw PPP Loan.
“The PPP was an incredible shot in the arm for small businesses last year, and this second wave of financial support will especially be a boost to businesses in rural and underserved communities,” said Dan Nordberg, SBA’s National Director of Rural Affairs and Region VIII Administrator. “With a targeted opening, SBA is prioritizing and extending relief to impacted business owners who need it the most. If you own or operate a small business, I strongly encourage you to look into this opportunity for assistance. As always, our SBA team is eager to answer questions, offer help through the process, and connect business owners and entrepreneurs with tools for long-term health and success.”
Key PPP updates include:
* PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;
* PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
* The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, destination marketing organizations, among other types of organizations;
* The PPP provides greater flexibility for seasonal employees;
* Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
* Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.
A borrower is generally eligible for a Second Draw PPP Loan if the borrower:
* Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
* Has no more than 300 employees; and
* Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.