Paycheck Protection Program Begins Staggered Rollout This Week
Dear WANADA Members,
The Small Business Administration has announced that certain small businesses will be able to apply for Paycheck Protection Program funding this week, with the program re-opening more widely in the near future.
As of today, SBA-approved "community financial institutions" are able to provide loans to small businesses who did not participate in the program previously. Those who received PPP loans in 2020 from community financial institutions will be able to apply for a second round of funding on Wednesday, Jan. 13.
You can review the parameters of these rules, which are designed to prioritize businesses and lenders in traditionally underserved communities, at this link.
The program, which was replenished with an additional $284 billion in funding in the COVID-19 relief bill passed in late December, will accept applications from more lenders and participants "shortly thereafter," according to the language of the SBA news release.
Please review the SBA's guidance for prior participants, who would be in line to receive what are called "second draw loans," at this link. You may also view the SBA's final rule that addresses the modifications to this round of PPP funding by clicking here.
As the SBA notes, the one major change this year from the program in 2020 is that, while participants with NAICS franchisor codes could previously have over 500 employees, so long as there were no more than 500 at any individual location, that number has been lowered to 300 employees. The 300 employee cap applies to businesses without an NAICS code, as well.
Eligible businesses must show at least a 25 percent decline in gross receipts between 2019 and 2020, or in a comparable quarter of 2020 compared to the prior year, according to the SBA's release regarding the re-opening of the program.
We will follow up with more information in the coming days, once the SBA provides more information on specifically when the program will open to a broader group of participants.
In the meantime, please be sure to review the SBA's documents with your financial advisor to determine if the replenished PPP program, or the Economic Injury Disaster Loan program, are right for your business. Please also feel free to contact me or Joe Koch (jk@wanada.org) if you have any questions.
Sincerely,
John O'Donnell
WANADA President and CEO
