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SBA and Treasury Announce PPP Reopening, New Guidance Issued
Arcadia Weekly Jan 08, 2021
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Originally posted Jan. 8 at 8:15 a.m. / Updated Jan. 8 at 9:20 a.m.
The U.S. Small Business Administration(SBA), in consultation with the Treasury Department, announced todaythat the Paycheck Protection Program (PPP) will re-open the week of Jan. 11 fornew borrowers and certain existing PPP borrowers. To promote access to capital,initially only community financial institutions will be able to make First DrawPPP Loans on Monday and Second Draw PPP Loans on Wednesday. The PPP will opento all participating lenders shortly thereafter. Updated PPP guidance outliningprogram changes was released on Jan. 6 in accordance with the Economic Aid toHard-Hit Small Businesses, Non-Profits, and Venues Act.
This round of the PPP prioritizes millions of Americansemployed by small businesses by authorizing up to $284 billion toward jobretention and certain other expenses through March 31, 2021, and by allowingcertain existing PPP borrowers to apply for a Second Draw PPP Loan.
Key PPP updates include:
- PPPborrowers can set their PPP loan’s covered period to be any length between eightand 24 weeks to best meet their business needs.
- PPPloans will cover additional expenses, including operations expenditures,property damage costs, supplier costs, and worker protection expenditures.
- TheProgram’s eligibility is expanded to include 501(c)(6)s, housing cooperatives,destination marketing organizations, among other types of organizations.
- ThePPP provides greater flexibility for seasonal employees.
- Certainexisting PPP borrowers can request to modify their First Draw PPP Loan amount.
- Certainexisting PPP borrowers are now eligible to apply for a Second Draw PPPLoan.
Aborrower is generally eligible for a Second Draw PPP Loan if the borrower:
- Previouslyreceived a First Draw PPP Loan and will or has used the full amount only forauthorized uses.
- Hasno more than 300 employees.
- Candemonstrate at least a 25% reduction in gross receipts between comparablequarters in 2019 and 2020.
Thenew guidance released includes:
- PPP Guidancefrom SBA Administrator Carranza on Accessing Capital for Minority, Underserved,Veteran, and Women-owned Business Concerns;
- InterimFinal Rule on Paycheck Protection Program as Amended by Economic Aid Act.
- InterimFinal Rule on Second Draw PPP Loans.
Formore information on SBA’s assistance to small businesses, visit sba.gov/ppp or treasury.gov/cares.
