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Beginning Jan. 11, the Paycheck Protection Program (PPP) will again be open to businesses adversely affected by COVID-19, the Small Business Administration (SBA) has confirmed. The program will be available to new borrowers and certain existing PPP borrowers.
The SBA states this round of PPP prioritizes millions of Americans employed by small businesses by allocating roughly $284 billion for job retention and certain other qualified expenses through March 31 and by allowing previous borrowers to apply for a Second Draw PPP loan.
“The historically successful Paycheck Protection Program served as an economic lifeline to millions of small businesses and their employees when they needed it most,” says administrator 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 ensure their path to recovery.”
To date, PPP has provided more than 5 million loans totaling $525 billion and supported more than 51 million jobs, program administrators say.
According to the SBA, 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.
The new guidance released includes:
