PPP program to reopen Jan. 11
January 8, 2021
•Land Line Staff
The U.S. Small Business Administration has announced that its Paycheck Protection Program will reopen next week.
“To promote access to capital, initially only community financial institutions will be able to make first draw PPP loans on Monday, Jan. 11, and second draw PPP loans on Wednesday, Jan. 13,” the news release from the SBA said. “The PPP will open to all participating lenders shortly thereafter.”
The program plans 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. Certain existing PPP borrowers also will be able to apply for a second draw loan through the program.
“The historically successful Paycheck Protection Program served as an economic lifeline to millions of small businesses and their employers when they needed it most,” SBA Administrator Jovita Carranza said in the news release. “Today’s guidance 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 ensure their path to recovery.”
Some of the key updates to the program include:
- Borrowers can set their PPP loans’ covered period to be any length between eight and 24 weeks to best meet their business needs.
- 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 nonprofit business associations, 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.
- Certain existing PPP borrowers are now eligible to apply for a second draw PPP loan.
A borrower is 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.
- Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
More information about the changes can be found here. LL