The PPP program portal is set to re-open for small lenders on January 15th, and for all lenders on January 19th, making Startup Loans PPP Re-Opens an important headline for entrepreneurs. The re-opening follows the enactment of the Economic Aid Act (EAA), which refunded the popular Paycheck Protection Program (PPP). The PPP now includes first and second funding options for qualified borrowers, as well as various modifications such as re-funding of EIDL first advances and a focus on small-sized lenders and disadvantaged borrowers. New guidelines have also been introduced for partnerships, seasonal employers, and farmers. Borrowers who repaid, returned part of, or did not accept the full amount of their first loan before December 27th, 2020, may also be eligible for a PPP Increase. However, if the first loan was forgiven by the SBA, the borrowers cannot apply for an increase. It’s crucial for borrowers to confirm with their original lenders if they will permit an increase based on the revised guidelines.

PPP Program Portal Re-Opening

The PPP program portal will re-open to small lenders (assets under $1B) on Friday, January 15th, and the portal will re-open for all lenders on Tuesday, January 19th.

Procedural Notice on First Draw Paycheck Protection Program Loan Increases

The agency has also issued a 9-page “Procedural Notice” this morning on the “First Draw Paycheck Protection Program Loan Increases After Enactment of the Economic Aid Act”. Here’s a breakdown of the “Procedural Notice”.

Overview of Economic Aid Act Changes

The recently signed Economic Aid Act (EAA) included the re-funding of the extremely popular Paycheck Protection Program (PPP) to include first and second funding options for qualified borrowers. There were numerous other program modifications, including re-funding of EIDL first advances and funding conduits that focus on small-sized, specialty lenders and disadvantaged borrowers.

Groups Eligible for PPP Loan Increases

  • Partnerships (the original guidelines omitted any amount for partner compensation)
  • Seasonal Employers – the method by which a seasonal employer may determine its maximum loan amount. Under the revised guidelines, seasonal employers can now use the average total monthly payroll for any 12-week period, beginning 2/15/2019 and ending 2/15/2020
  • Farmers and Ranchers – they can now use gross revenues vs. net income

Other borrowers may also be eligible for a PPP Increase (or Reapplication), including:

  • Eligible borrowers that fully repaid their first draw loan before 12/27/2020
  • Eligible borrowers that returned part of their first draw loan before 12/27/2020
  • Eligible borrowers that did not accept the full amount of their first draw loan for which they were approved

If a borrower’s first draw loan has been forgiven by the SBA, they cannot apply for an increase.

Important Considerations for Borrowers

The critical variable to this process is the “Lender of Record” (i.e., the lender that provided the original PPP funding in 2020). The lender may opt out of the increase feature, and some queried indicated that they would not participate in the loan increase program, and instead would issue a second draw loan. Therefore, clients should check with their original lender to find out if they will permit them to seek an increase based on the revised, retroactive, guidance from the SBA.

Question & Answer

When will the PPP program portal re-open for small lenders and all lenders?

The PPP program portal will re-open for small lenders (assets under $1B) on January 15th, and for all lenders on January 19th.

Who is eligible for a PPP loan increase?

Partnerships, seasonal employers, farmers, and borrowers who repaid, returned part of, or did not accept the full amount of their first loan before December 27th, 2020, may be eligible for a PPP Increase.

Can borrowers apply for a PPP loan increase if their first loan was forgiven by the SBA?

No, borrowers cannot apply for an increase if their first loan was forgiven by the SBA.

What modifications have been introduced in the PPP program following the Economic Aid Act?

The PPP now includes first and second funding options for qualified borrowers, re-funding of EIDL first advances, and a focus on small-sized lenders and disadvantaged borrowers.