The U.S. Small Business Administration (SBA) has announced the PPP Re-Opening, set to initiate the week of January 11 for new and certain existing borrowers. Significant updates to the program include the flexibility for PPP borrowers to determine their loan’s covered period, ranging from 8 to 24 weeks, and the expansion of loan coverage to additional expenses. The program’s eligibility has been extended to include a broader range of organizations, and the program now offers increased flexibility for seasonal employees. Existing PPP borrowers can also request modifications to their First Draw PPP Loan amount and are now eligible to apply for a Second Draw PPP Loan. The SBA has released additional guidance to assist minority, underserved, veteran, and women-owned businesses in accessing capital.
Introduction
WASHINGTON – 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.
Program Updates
- 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, direct 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.
Second Draw PPP Loan Eligibility
- 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.
Additional Guidance
- PPP Guidance from SBA Administrator Carranza on Accessing Capital for Minority, Underserved, Veteran, and Women-owned Business Concerns;
- Interim Final Rule on Paycheck Protection Program as Amended by Economic Aid Act; and
- Interim Final Rule on Second Draw PPP Loans.
About the U.S. Small Business Administration
The U.S. Small Business Administration helps power the American dream of business ownership. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.
Question & Answer
1. What updates have been made to the Paycheck Protection Program (PPP) for new and existing borrowers?
Significant updates to the program include the flexibility for PPP borrowers to determine their loan’s covered period, ranging from 8 to 24 weeks, and the expansion of loan coverage to additional expenses.
2. Who is now eligible to apply for the PPP program?
The program’s eligibility has been extended to include a broader range of organizations, such as 501(c)(6)s, housing cooperatives, and direct marketing organizations, among others.
3. What are the eligibility criteria for a Second Draw PPP Loan?
To be eligible for a Second Draw PPP Loan, a borrower must have previously received a First Draw PPP Loan, used the full amount 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.
