The U.S. Small Business Administration (SBA), in consultation with the Treasury Department, announced today that the Paycheck Protection Program (PPP) will re-open the week of January 11 for new borrowers and certain existing PPP borrowers.
To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13. The PPP will open to all participating lenders shortly thereafter.
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.
How To Apply
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.
If you wish to begin preparing your application, you can download the following PPP borrower application forms to see the information that will be requested from you when you apply with a lender:
These documents are long, but fully explain the program. Please take the time to read them.
Other items of note:
· Expenses paid with PPP funds are now tax deductible
· SBA rescinded the condition requiring EIDL grant money to be deducted from PPP forgiveness. If you received EIDL Advance funds. You no longer need to take those into consideration when applying for PPP forgiveness.
· The EIDL Loan deadline has been extended until Dec. 31, 2021
· Lender and borrower fees for SBA 7(a) and 504 loan programs are waived.
· SBA has authorized grants to eligible live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theatre operators, or talent representatives who demonstrate a 25 percent reduction in revenues.
We will continue to notify you as additional information on these programs becomes available.