The Paycheque Protection Program is back on track
The US Small Business Administration (SBA), in consultation with the Treasury Department, has announced that the Paycheck Protection Program (PPP) is once again open to new borrowers and some existing PPP borrowers.
To promote access to capital, initially, only community financial institutions will be able to grant first-draw PPP loans on Monday, January 11, and second-draw PPP loans on Wednesday, January 13. The PPP will open to all participating lenders shortly thereafter.
An update to the PPP guidelines outlining changes to the program to improve its effectiveness and accessibility was released on January 6 in accordance with the Law on Economic Aid to Small Businesses, Nonprofits and Hard-Fitting Sites. affected.
This P3 cycle continues to prioritize millions of Americans employed by small businesses by authorizing up to $ 284 billion for job retention and certain other spending through March 31, 2021, and allowing some existing PPP borrowers to apply for a second PPP loan.
The main PPP updates include:
- PPP borrowers can set the period covered by their PPP loan to be between 8 and 24 weeks to best meet their business needs;
- PPP loans will cover additional expenses, including operating expenses, property damage costs, supplier costs, and worker protection expenses;
- Program eligibility is broadened to include 501 (c) (6), housing co-ops, destination marketing organizations, among other types of organizations;
- The PPP offers greater flexibility for seasonal employees;
- Some existing PPP borrowers may request to change the amount of their first-draw PPP loan; and
- Some 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 they:
- Previously received a first draw PPP loan and will use or have used the full amount only for authorized uses;
- Has no more than 300 employees; and
- Can demonstrate a reduction of at least 25% in gross revenue between comparable quarters in 2019 and 2020.
New published guidelines include: