UPDATED JANUARY 14, 2021
On January 8, 2021, the U.S. Small Business Administration (SBA), in consultation with the Treasury Department, announced that the Paycheck Protection Program (PPP) will re-open the week of January 11 for new borrowers and certain existing PPP borrowers. Additional opening dates were added by the SBA in a press release issued on January 13, 2021.
To improve and promote access to capital for underserved and minority-owned small businesses, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13. Lenders eligible for this phase include Community Development Financial Institutions, minority depository institutions, certified development companies and microloan intermediaries.
Continuing its efforts to reach smaller businesses and lenders, the SBA will re-open the loan portal on Friday, January 15, 2021, to PPP-eligible lenders with $1 billion or less in assets for First and Second Draw applications. These lenders include include community banks, credit unions and farm credit institutions.
Finally, on Tuesday, January 19, 2021, the portal will fully open to all participating PPP lenders to submit First and Second Draw loan applications to SBA.
Links to PPP loan applications below:
This round of the PPP continues to prioritize millions of Americans employed by small businesses by authorizing up to $284 billion toward job retention and certain other expenses through March 31, 2021, and by allowing certain existing PPP borrowers to apply for a Second Draw PPP Loan. Updated PPP guidance outlining Program changes to enhance its effectiveness and accessibility was released on January 6, 2021 (see related post).
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 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.
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.