Following the approval of an additional $284 billion in funds for the Paycheck Protection Program in December, the U.S. Small Business Administration, in consultation with the U.S. Department of the Treasury, has reopened the PPP for new borrowers and certain existing PPP borrowers.
According to an SBA news release, 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. Shortly thereafter, the PPP will open up to all other participating lenders.
Key updates to the PPP include the following:
- PPP borrowers can set their PPP loan’s covered period to be any length between eight 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 and 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 generally 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
SBA and Treasury also released the following guidance to assist small business with the latest round of PPP funds, which will be made available through March 31, 2021:
Those that qualify can access the First Draw borrower application and Second Draw borrower application on the SBA website. More information on the PPP can be found on the SBA and Treasury Department websites.
ABC has followed the implementation and additional revisions to the PPP and submitted comments on previous rulemakings related to the program and will continue to provide updates on the PPP through Newsline.