The first round of the program was criticized for lending money to large businesses that had access to capital and, thus, did not really need the government loans. More than 5 million small businesses benefited from the first rounds of PPP, helping to save millions of jobs.
The program will reopen for first-time borrowers initially, with second-time or "second-draw" borrowers eligible to apply Wednesday. In Pennsylvania's 7th Congressional District, which includes Lehigh and Northampton counties along with the southern portion of Monroe County, more than 9,400 PPP loans were approved from April to when the program closed August 8. The initiative also has $30 billion to help boost capacity among lenders active in underserved areas - including community development financial institutions, minority depository intuitions and other small lenders. Loans will open to all participating lenders shortly after, SBA says.
Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. The new application period runs through March 31.
For businesses seeking a second loan, they must have used the full amount of their first PPP loan or plan to do so before the funds from the second draw will be disbursed.
Congress a year ago authorized up to $284 billion toward job retention through March 31 and allowed some PPP borrowers to apply for a Second Draw PPP Loan. Her previous experience at SBA and understanding of small business needs will serve her well in this important position. The applications will go through a series of automated checks before a loan number is issued. Firms can have a maximum of 300 employees, down from 500, and the maximum loan amount this time is $2 million, a decrease from $10 million.
For the first round of PPP, more than 430 CDFIs and MDIs across the country made over 221,000 PPP loans available for more than $16.4 billion, according to the SBA. The more prepared you are, the sooner you'll be able to get your loan processed. Otherwise, the loans carry a 1% interest rate and a maturity of five years.
What is the covered period of the loans? The $349 billion first provided under the Cares Act ran out in a mere two weeks.
Those who borrowed $150,000 or less through the PPP will no longer be required to provide as detailed of an account of how funds were spent.
No, the loans will be 100% guaranteed by the U.S. Small Business Administration and will require neither collateral nor personal guarantees.