EULESS, Texas (CBSDFW.COM) – The United States Small Business Administration, in consultation with the Treasury Department, announced on Friday, January 8, 2021 that the Paycheck Protection Program (PPP) will reopen the week of January 11 for new borrowers and certain PPP borrowers. existing.
To support access to capital, initially, only community financial institutions will be able to provide first draw PPP loans on Monday January 11 and second draw PPP loans on Wednesday January 13. The PPP will be open to all participating lenders shortly thereafter. Updated PPP guidelines outlining changes to the program to improve its effectiveness and accessibility were released on January 6, in accordance with the Economic Assistance to Small Businesses, Nonprofits and Places Act. hard hit.
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“The historic successful Paycheck Protection Program has served as an economic lifeline for millions of small businesses and their employees when they needed it most,” the administrator said. Jovita Carranza. “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 secure their path to recovery.”
This PPP round continues to prioritize millions of Americans employed by small businesses by authorizing up to $284 billion for job retention and certain other expenses through March 31, 2021, and allowing certain existing PPP borrowers to apply for a second PPP loan.
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“The Paycheck Protection Program has successfully provided 5.2 million loans worth $525 billion to American small businesses, supporting more than 51 million jobs,” said Treasury Secretary Steven T. Mnuchin. “These updated guidelines enhance PPP’s targeted assistance to small businesses most affected by COVID-19. We are committed to quickly implementing this P3 round to continue supporting America’s small businesses and their workers.
Major PPP updates include:
- PPP borrowers can set the period covered by their PPP loan from 8 to 24 weeks to best suit their business needs;
- PPP loans will cover additional expenses, including operating expenses, property damage costs, supplier costs, and worker protection expenses;
- Program eligibility is expanded to include 501(c)(6), housing co-operatives, direct marketing organizations, among other types of organizations;
- The PPP offers greater flexibility to seasonal employees; some existing PPP borrowers may request to change their PPP First Draw loan amount; and some existing PPP borrowers are now eligible to apply for a PPP Second Draw loan.
- A borrower is generally eligible for a second draw PPP loan if the borrower: has already received a first draw PPP loan and will use or has used the full amount only for permitted uses; has no more than 300 employees; and can demonstrate a reduction of at least 25% in gross revenue between comparable quarters in 2019 and 2020.
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New guidelines released include: