The SBA has announced that the Paycheck Protection Program (PPP) reopens, Monday January 11.
The $284 billion allocated from the Covid Relief Bill gives those that weren’t approved or did not participate in the first iteration of PPP another chance to apply, and allows businesses that have exhausted previous PPP money, and have been significantly impacted by the pandemic, to apply for a second draw.
Businesses that have not previously received a PPP loan will be allowed to apply first (First Draw Loan). Businesses that have previously received a loan through PPP and have spent all the money from the initial loan (Second Draw Loan) can apply beginning January 13.
This PPP Loan program is substantially like the original PPP but with some modifications. Those applying for a Second Draw Loan must have:
- 300 or fewer employees, down from 500 in the first round.
- A decline in revenue of at least 25% in any quarter of 2020 compared with the same quarter the previous year
The second-round PPP program has also expanded the pool of businesses able to apply to include 501(c)(6)s, housing cooperatives, news organizations, and direct marketing organizations.
Initially, applications will only be accepted from lenders identified as “community financial institutions”. The goal being to reach underserved and minority-owned small businesses. Beginning January 15, about 5,000 more lenders can access the portal, including community banks, credit unions and farm credit institutions. Friday’s step is part of the SBA’s emphasis on reaching smaller lenders and businesses. The program will open to all participating lenders beginning January 19. For more information on SBA’s assistance to small businesses, visit http://sba.gov/ppp
The last day to apply for and receive a PPP Loan is March 31, 2021.