The new round of PPP loans will begin on January 11th

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The Federal Small Business Administration (SBA), in agreement with the Treasury Department, has announced that the Payroll Protection Program (PPP) will reopen this week. January 11 by new borrowers and certain existing borrowers. To promote access to capital, in the beginning only community financial institutions will be able to grant PPP First Draw Loans on Monday, January 11th and PPP Second Draw Loans on Wednesday, January 13th. The program will open to all participating providers shortly thereafter.

On January 6, an updated guide to the PPP was published that describes the changes that the program underwent to improve its effectiveness and accessibility, in accordance with the Law on Economic Aid for Small Businesses, Non-profit Organizations and Seus.

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

“The historically successful Payroll Protection Program served as an economic lifesaver for millions of small businesses and their employees when they needed it most,” SBA Administrator Jovita Carranza said in a press release. “Today’s guides build on the success of the program and adapt to the changing needs of small business owners by providing specific relief and a simpler forgiveness process to secure their path to recovery “.

“The Payroll Protection Program has successfully granted $ 5.2 billion in loans worth $ 525 billion to small businesses in the United States, supporting more than 51 million jobs,” the secretary of the Treasurer, Steven T. Mnuchin. “This updated guide enhances PPP-specific relief for small businesses most affected by COVID-19. We are committed to implementing this round of APP quickly to continue to support American small businesses and their workers. “.

Key PPP updates include:

• Borrowers can set their loan coverage period to be between 8 and 24 weeks to better 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 expanded to include 501 (c) (6) entities, housing cooperatives, and direct marketing organizations, among other types of organizations;

• PPP provides greater flexibility to seasonal employees;

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

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

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

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

• Has no more than 300 employees; i

• It can demonstrate at least a 25% reduction in gross revenue between comparable quarters in 2019 and 2020.

The newly published guide includes:

• PPP guidance from SBA administrator Carranza on access to capital for minority, neglected, veteran and women-owned businesses;

• Provisional final rule on the PPP amended by the new financial aid law; i

• Provisional final rule on PPP Second Draw loans.

For more information on SBA assistance to small businesses, visit sba.gov/ppp or treasury.gov/cares.

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