As of Monday, small businesses can start applying for new Paycheck Protection Program loans. The latest COVID-19 relief package includes $284 billion for additional lending to eligible businesses.
This round is different in several ways. Businesses can now get a second PPP loan. Targeted funds are available for the most vulnerable businesses. There is greater flexibility in how the loan may be used and still be fully forgiven. And the forgiveness process is simpler.
“So today we just opened up the first draw of PPP,” Stacey Poynter, SBA Indiana district director, said. “So for those who didn't get a PPP last time, it is opened up today. However, it is not for every lender yet. So it is just for these community financial institutions, which is defined by four groups: a community financial development institution, a minority depository institution, a certified development corporation, or a micro-loan intermediary. It is a little different and the reason why is that those groups are targeting the underserved market, so we are trying to make sure that we hit those first so that the smallest of businesses have the opportunity, there is actually money set aside for those intermediaries in order to lend money.”
This coming Wednesday, the second draw of PPP loans will be open as well. But again, it is just for those using a CFI, a Community Financial institution, not for all lenders.
All lenders will be opened up later, the Small Business Administration has not announced the date yet. Poynter said that it will be coming soon for all lenders.
When that does open for all lenders, business owners will have to show that they employ under 300 employees, in 2020, it was under 500 employees. Small businesses will also have to show a 25% reduction in gross revenue from quarter over quarter from 2019 to 2020, which is an extra caveat that was not in there last time.