Paycheck Protection Program reopens today

The Paycheck Protection Program will reopen today for any borrowers that missed the last round of funding and certain existing borrowers.

Only community financial institutions can make First Draw PPP Loans today and Second Draw PPP Loans on Wednesday to allow for greater access to capital for their lending partners, according to a news release. All participating lenders will be able to access the program shortly after.

With this round of PPP, the U.S. Small Business Administration is prioritizing support for employees of small businesses through $284 billion in funding allocated toward job retention, property damage costs, operations expenditures, supplier costs and worker protection through March 31, 2021.

Borrowers may be eligible for a Second Draw PPP Loan if the company has received a First Draw PPP Loan and has allocated all funding toward eligible uses, has fewer than 300 employees and can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020, according to the release.

“The historically successful Paycheck Protection Program served as an economic lifeline to millions of small businesses and their employees when they needed it most,” SBA Administrator Jovita Carranza said in the release.  “Today’s guidance builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to ensure their path to recovery.”

Borrowers can set the loan’s covered period to any length between eight to 24 weeks, and 501(c)(6) organizations, housing cooperatives and direct marketing organizations, among other new additions are now eligible for the program.

Other updates include new provisions for seasonal employees and the ability to modify a First Draw PPP loan amount.

“The Paycheck Protection Program has successfully provided 5.2 million loans worth $525 billion to America’s small businesses, supporting more than 51 million jobs,” Treasury Secretary Steve Mnuchin said in the release.  “This updated guidance enhances the PPP’s targeted relief to small businesses most impacted by COVID-19.  We are committed to implementing this round of PPP quickly to continue supporting American small businesses and their workers.”