The paycheck protection program reopened, effective Monday.
The US Small Business Administration has said the program will be open to new borrowers and to some existing borrowers. First draw borrowers can apply from Monday. Borrowers of the second draw can apply from Wednesday.
The program authorizes up to $ 284 billion nationwide for job retention and certain other professional expenses until March 31.
Key provisions include:
- PPP borrowers can set their loan coverage period from eight to 24 weeks.
- PPP loans will cover additional expenses, including operating expenses, property damage costs, supplier costs, and worker protection expenses.
- Program eligibility is broadened to include 501 (c) (6), housing co-ops and direct marketing organizations, among other types of organizations.
- The PPP offers greater flexibility for seasonal employees.
- Some existing PPP borrowers may request to change their first-draw PPP loan amount.
- Some existing PPP borrowers are now eligible to apply for a second loan.
A borrower is generally eligible for a second loan if he:
- Previously received a PPP loan and will use or have used the full amount only for authorized uses.
- Has no more than 300 employees.
- Can demonstrate a reduction of at least 25% in gross revenue between comparable quarters in 2019 and 2020.
PPP loans continue to be issued at an interest rate of 1% and are repayable if loan conditions are met. The maturity of the new loans will be five years instead of two years for the initial loans.
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