New PPP SBA Loans Now Available From Community Banks | Coping with COVID-19
U.S. businesses can apply for new Paycheck Protection Program loans starting today as the Small Business Administration has opened a new round of funding through community financial institutions.
The loans are available to new and existing PPP borrowers, according to a press release.
Only community financial institutions will be able to grant “first draw” PPPs today January 11 and “second draw” PPP loans on Wednesday 13 January. The PPP will open to all participating lenders shortly thereafter.
The agency announced updated guidelines on January 6 outlining changes to the program, in line with the law on economic assistance to small businesses, nonprofits and hard-hit sites.
This PPP round authorizes up to $ 284 billion for job retention and certain other expenses until March 31, 2021, and allowing certain existing PPP borrowers to apply for a “second draw” PPP loan.
“Today’s advice builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to secure their path to recovery,” said Administrator Jovita Carranza said in the statement.
The PPP program has provided 5.2 million loans worth $ 525 billion to small businesses, supporting more than 51 million jobs, said Treasury Secretary Steven T. Mnuchin.
The main PPP updates include:
- Borrowers can set the period covered by their PPP loan to be between eight and 24 weeks.
- The loans will cover additional expenses, including operating expenses, property damage costs, supplier costs, and worker protection expenses.
- Program eligibility is broadened to include 501 (c) (6), housing co-ops, destination marketing organizations, and other types of organizations.
- Greater flexibility for seasonal employees.
- Some existing borrowers may request to change their “first draw” PPP loan amount.
- Some existing borrowers are now eligible to apply for a “second draw” PPP loan.
A borrower is generally eligible for a “second draw” PPP loan if it meets the following conditions:
- Previously received a “first draw” PPP loan and will have used or used the total amount only for authorized uses.
- Not to have more than 300 employees.
- Can demonstrate a reduction of at least 25% in gross revenue between comparable quarters in 2019 and 2020.
Additional guidance under the program is available on the SBA website.
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