Small Business Administration Paycheck Protection Program (PPP)

 

 The U.S. Small Business Administration, in consultation with the U.S. Treasury Department, has re-opened the Paycheck Protection Program (PPP) for new borrowers and certain existing PPP borrowers. This round of the PPP will continue to be processed through participating financial institutions and will be available through March 31, 2021. This round will authorize up to $284 billion. This round is open to both First Draw PPP Loans and a Second Draw PPP Loan. In general, a First Draw PPP loan is for eligible borrowers who did not receive a PPP loan before the program closed in August 2020. A Second Draw PPP loan is for certain eligible borrowers that previously received a PPP loan and used the full amount of their First Draw PPP loan on authorized expenses, generally have 300 employees or less, and have suffered a 25% reduction in gross receipts. 

Key PPP updates include: 

• • 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 qualifying 501(c)(6)s, housing cooperatives, destination marketing organizations, among other types of organizations; 
• • The PPP provides greater flexibility for seasonal employees; 
• • The maximum amount for a First Draw loan is $10 million and for a Second Draw loan is $2 million; 
• • Certain existing PPP borrowers can request to modify their First Draw PPP loan amount; 
• • Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP loan; and 
• • In order to be eligible for the Shuttered Venue Operators Grant (SVOG), which is not yet open for applications, applicants must not have received a PPP loan on or after December 27, 2020. 

 

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. 

 

The PPP portal reopened on January 11, 2021. To promote access to capital for minority-, underserved-, veteran- and women-owned small business concerns, initially only community financial institutions were able to make First Draw PPP Loans on Monday, January 11, 2021, and Second Draw PPP Loans on Wednesday, January 13, 20201. SBA reopened the PPP loan portal to PPP-eligible lenders with $1 billion or less in assets for First and Second Draw applications on Friday, January 15th, 2021 at 9am ET. The portal fully opened on Tuesday, January 19th, 2021 to all participating PPP lenders to submit First and Second Draw loan applications to SBA.