The new round of PPP loans will start on 11 January

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The Federal Small Business Administration (SBA), in agreement with the Treasury Department, announced today that the Payroll Protection Program (PPP) will reopen the week of Jan. 11 to new borrowers and certain existing borrowers. To facilitate access to capital, only community financial institutions will initially be able to issue First Draw PPP loans on Monday, January 11 and Second Draw PPP loans on Wednesday, January 13. The program will be open to all participating lenders shortly thereafter.

On January 6, an updated PPP guide was published describing the changes the program underwent to improve effectiveness and accessibility, in accordance with the Economic Aid Act for Small Businesses, Nonprofits and Corporate Headquarters.

This round of PPP continues to prioritize millions of Americans employed by small businesses by allowing up to $ 284 billion for job retention and certain other expenses through March 31, 2021, and by allowing certain existing PPP borrowers to apply for a second loan under the PPP.

“The historically successful Payroll Protection Program served as an economic lifeline for millions of small businesses and their employees when they needed it most,” said SBA administrator Jovita Carranza in a press release. “Today’s guidelines build on the success of the program and adapt to the evolving needs of small business owners by providing targeted assistance and an easier forgiveness process to secure your path to recovery.”

“The Payroll Protection Program has successfully provided $ 5.2 million in loans to US small businesses, supporting more than 51 million jobs,” Treasury Secretary Steven T. Mnuchin said. “These updated guidelines improve the targeted PPP lighting for small businesses hardest hit by COVID-19. We are committed to speeding up this round of PPPs to continue supporting American small businesses and their employees. “

The main updates to the PPP are:

• Borrowers can set their loan coverage period to 8-24 weeks to better meet their business needs;

• PPP loans cover additional costs, including operating costs, property damage costs, supplier costs and employee protection costs;

• Program eligibility will be extended to 501 (c) (6) entities, housing associations and direct marketing organizations, among other types of organizations;

• PPP offers more flexibility for seasonal employees;

• Certain existing borrowers may request to change the amount of their PPP First Draw loan; and

• Some existing borrowers are now eligible to apply for a Second Draw PPP loan.

A borrower is typically eligible for a second PPP loan if the borrower:

• You have previously received and used a PPP loan or used the full amount for authorized use only;

• Does not have more than 300 employees; and

• You can demonstrate at least 25% reduction in gross income between comparable quarters in 2019 and 2020.

The newly published guide includes:

• Guidelines for PPP by SBA administrator Carranza on access to capital for minority, disadvantaged, veteran and women’s businesses;

• Provisional final rule on the PPP amended by the new Financial Aid Act; and

• Provisional Final Rule on PPS Second Draw Loans.

To learn more about SBA assistance to small businesses, visit sba.gov/ppp or treasury.gov/cares.

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