The Paycheck Protection Program will reopen the week of Jan. 11 for new borrowers and certain existing PPP borrowers.
This time, community financial institutions will be first in line to make First Draw PPP loans on Jan. 11, and Second Draw PPP loans on Jan. 13. The PPP will open to all participating lenders shortly thereafter.
This followed criticism that too much PPP capital has previously gone to banking and lending giants.
The updated guidance on accessibility was released Jan. 6 in line with the Economic Aid to Hard-Hit Small Businesses, Non-Profits and Venues Act.
This round of the PPP aims 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.
To qualify for a Second Draw loan, borrowers need to show their revenue is down 25 percent from last year as well as:
show they have no more than 300 employees; and
show they previously received a First Draw PPP Loan, using the full amount only for authorized uses.
Other 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, 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.
The new guidance released includes:
More information is at www.sba.gov/ppp.