Paycheck Protection Program re-opened today

The second round of the Paycheck Protection Program (PPP) re-opened today. It concerns new borrowers and certain existing PPP borrowers.

The program re-opened today for Community Financial Institutions looking to secure First Draw PPP Loans. In hopes of promoting access to capital, Second Draw PPP Loans that become available this Wednesday will also be limited to Community Financial Institutions. “Community Financial Institutions” are defined as private financial institutions that are 100% dedicated to delivering responsible, affordable lending to help low-income, low-wealth, and other disadvantaged people and communities join the economic mainstream. Shortly thereafter, the program will open to all participating lenders.

The second round of PPP authorizes up to $284 billion toward job retention and certain other expenses through March 31, 2021. Notably, certain existing PPP borrowers may be eligible 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.

Please note the following information regarding the second round of PPP:

• 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, 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; and
• Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan. 

To learn more about the program and to review the latest guidance, please visit the following sites:

• PPP Guidance from SBA Administrator Carranza on Accessing Capital for Minority, Underserved, Veteran, and Women-owned Business Concerns;
• Interim Final Rule on Paycheck Protection Program as Amended by Economic Aid Act; and
• Interim Final Rule on Second Draw PPP Loans.

For more information on the Small Business Administration’s available assistance to small businesses, visit sba.gov/ppp or treasury.gov/cares.