SBA Expands Reopening Of Paycheck Protection Program
On January 15, the U.S. Small Business Administration reopened its Paycheck Protection Program (PPP) portal for PPP-eligible lenders with $1 billion or less in assets. It will open the portal for all lenders on January 19. This news comes after SBA finalized two interim final rules pertaining to the next round of the PPP.
As a reminder, key details for this round of loans include specifications that:
- PPP borrowers can set their PPP loan’s covered period to be any length between eight and 24 weeks in order to best meet their business needs;
- PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
- Provide greater flexibility for seasonal employees;
- Allow certain existing PPP borrowers to request modification of their first loan amount; and
- Allow certain existing PPP borrowers to apply for a second loan.
Over the weekend, the SBA released a fact sheet offering advice to first-time borrowers about how to calculate the loan needed and what documentation will need to be provided to the lender for approval.
To be eligible for a second loan, a borrower must have:
- Plans to use or proof that they already have used the full amount of their first loan only for authorized uses;
- More than 300 employees; and
- Be able to demonstrate at least a 25 percent reduction in gross receipts between comparable quarters in 2019 and 2020.
As Connecting the Dots reported last week, borrowers should expect a time lapse between the time banks submit loan application and the time they are provided a loan number since the agency will be doing some pre-screening analysis that will make the forgiveness process easier.
As a reminder, at the end of 2020, U.S. lawmakers also expanded the number of employers eligible for the Employee Retention Tax Credit (ERTC), which is designed to incentivize businesses to keep employees on their payroll during the COVID-19 pandemic. That expansion includes allowing business that take PPP loans to also take advantage of the ERTC. Click here for more information from the U.S. Chamber of Commerce about this tax credit.
This website also offers businesses advice about how to take advantage of COVID-19 relief loan and tax programs.