PPP Loan Applications Begin
WASHINGTON, DC — The Small Business Administration and U.S. Treasury Dept. have reopened the forgivable Paycheck Protection Program (PPP) loan program and will allow qualified existing borrowers to apply for a second loan beginning January 13, 2021.
The government agencies last week released new regulations regarding the PPP, as amended through the nearly $900-billion coronavirus relief package enacted at the end of 2020.
According to government officials, only community financial institutions, which include banks and credit unions that lend in low-income communities, will be able to initiate new PPP loan applications. The PPP will be open to all participating lenders shortly thereafter, according to the Treasury Dept., which manages the program in conjunction with the SBA.
The Paycheck Protection Program, originally established as part of the 2020 CARES Act, provides small businesses with the resources needed to maintain their payroll, hire back employees who may have been laid off, and cover applicable overhead. Funds can also be used to pay interest on mortgages, rent, and utilities. The program, implemented by the SBA with support from the Treasury Dept.
The second coronavirus rescue package, signed into law in December, provides economic relief for qualified small businesses from burdensome loan forgiveness requirements; creates a “second draw” that allows small businesses to receive a second PPP loan of up to $2 million; and expands eligibility to receive a PPP loan to 501(c)(6) organizations, including state and local HBAs.
Information is available by accessing https://home.treasury.gov/policy-issues/cares.