The second $284 billion Paycheck Protection Program, which will offer more forgivable loans designed to soften job losses from the pandemic, began accepting applications from businesses Monday.
The online PPP loan portal reopened at 8 a.m. Monday. Businesses can apply through their lenders.
Initially, only community financial institutions were able to apply to make first draw PPP loans. Those CFIs include Community Development Financial Institutions, Minority Depository Institutions, Certified Development Companies and Microloan Intermediaries, according to the U.S. Small Business Administration and Treasury Department. They made up approximately 10% of all PPP participating lenders in 2020.
Opening the portal first to microloan intermediaries was part of an ongoing effort to reach underserved and minority-owned small businesses, the agencies said.
PPP-eligible lenders with $1 billion or less in assets will be able to start applying to make first and second draw loans at 8 a.m. Friday. The SBA said this move continues its emphasis on reaching smaller lenders and businesses, and this group is approximately 5,000 community banks, credit unions and farm credit institutions.
The portal will open on Tuesday to all lenders that want to make first and second draw loans, and the loans will cover job retention and certain other expenses through March 31, the agencies said. The SBA also plans to have dedicated service hours for smaller lenders after the portal opens to all lenders.
Certain existing PPP borrowers can apply for a second draw PPP loan. To qualify, businesses must have previously received a first draw PPP loan; will or have used the full amount only for authorized uses; have no more than 300 employees; and demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
PPP updates include that:
Borrowers can set their PPP loan’s covered period to be any length between eight and 24 weeks;
Additional expenses, including operations expenditures, property damage costs, supplier costs and worker protection expenditures will be covered;
Eligibility has expanded to include 501(c)(6)s, housing cooperatives, direct marketing organizations, among other types of organizations;
The new program provides greater flexibility for seasonal employees; and
Certain existing PPP borrowers can request to modify their first draw PPP loan amount.
More: Updated guidance to this program was released last week in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act:
- Accessing Capital for Minority, Underserved, Veteran and Women-owned Business Concerns
- Interim Final Rule on Paycheck Protection Program as Amended by Economic Aid Act
- Interim Final Rule on Second Draw PPP Loans
"This additional funding through the Paycheck Protection Program will be a tremendous help to Arkansas small businesses that continue to be affected by COVID-19," SBA Arkansas District Director Edward Haddock said in a news release. "This new rollout of PPP will prioritize underserved, minority, veteran, rural, and women-owned businesses that were unable to take advantage of the first round of PPP funding.
"SBA will also employ community financial institutions to ensure that every small business in our state will have access to the resources they need to face the challenges caused by the pandemic and thrive in 2021. As SBA works to continue building and supporting this approved relief legislation, please sign up for our emails for the most up-to-date information on PPP and other COVID-19 funding options at sba.gov/updates."
SBA Administrator Jovita Carranza said the PPP "served as an economic lifeline to millions of small businesses and their employees when they needed it most."
"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," he said.