The Small Business Administration announced last week that the U.S. Department of Treasury would be re-opening the Paycheck Protection Program this week. This would be for new borrowers and those with existing PPP loans.
On Monday, January 11 community financial institutions were able to make First Draw PPP loans. On Wednesday, the Second Draw PPP loans will also be made available. After that all loans will be open to lenders.
$285 billion were authorized toward job retention and other expenses through March of 2021 in the new round of PPP loans. Existing borrowers were also allowed to apply for a Second Draw PPP loan in the new time frame.
If someone would like to apply for a Second Draw PPP loan they must have previously received a First Draw PPP loan or will, and that full amount has been used. They may not have any more than 300 employees and can show that they’ve seen at least a 25% reduction in gross receipts from 2019 to 2020.
According to the SBA here are the most recent PPP updates:
- 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, direct 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.
In order to apply for a PPP loan you can do so through any existing SBA 7(a) lender or a federally insured depository, credit union and Farm Credit System that is participating in the loans.
Sarah Ulmer
