WASHINGTON, D.C. (WWTI) — The Small Business Administration has announced that the Paycheck Protection Program will reopen next week.
The United States Small Business Administration announced on Friday, following consultation with the United States Treasury Department, that the Paycheck Protection Program will re-open the week of January 11 for both new and certain existing borrowers.
The SBA stated that the upcoming round of the Program will designate $284 billion towards job retention and other expenses through March 31, 2021.
According to the SBA, initially only community financial institutions will be able to make First Draw PPP loans on January 11 and Second Draw PPP loans on January 13, 2021. It will be open to all participating lenders shortly following these dates.
Generally, to be eligible for the Program borrowers can either have previously received a First Draw PPP Loan and will or has used the fill amount, has 300 employees or less and can demonstrate at minimum 25% reduction in gross receipts between 2019 and 2020.
Additionally, updated PPP guidance was released on January 6 in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits and Venues Act.
Small Business Administrator Jovita Carranza commented on the upcoming round of the Program.
“The historically successful Paycheck Protection Program served as an economic lifeline to millions of small businesses and their employees when they needed it most,” said 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.”
The SBA shared key updates of the Paycheck Protection Program. These include the following.
- PPP loan coverage period can extend from eight to 24; set by PPP borrowers
- Loans will cover additional expenses including operations expenditures, property damage costs, supplier costs and worker protection expenditures
- Eligibility for the program expanded to include 501(c)(6)s, housing cooperatives, direct marketing 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
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