The Treasury Department just announced that just that the Small Business Administration will begin accepting PPP loan applications next week, though it will happen in several stages.
- On Monday (January 11), SBA will begin accepting applications for first draw PPP loans from community development financial institutions (CDFI’s) only.
- On Wednesday (January 13), SBA will begin accepting applications for second draw PPP loans from CDFI’s only.
- The following Wednesday, the program will be opened to all participating lenders.
In preparation for the reactivation of the program next week, SBA has updated its guidance on PPP including:
Business Loan Program Temporary Changes; Paycheck Protection Program as Amended
by Economic Aid Act
Business Loan Program Temporary Changes; Paycheck Protection Program Second DrawLoans
Guidance on Accessing Capital for Minority, Underserved, Veteran and Women-Owned Business Concerns
Links to those documents and summaries follow:
- 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.
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; and
- Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
