A 1/13/2021 U.S. Treasury Department Press Release reported that the SBA is re-opening the Paycheck Protection Program (PPP) loan portal:

• to small lenders on 1/15/2021, and
• to all lenders on 1/19/2021.

Background

On 12/27/2020, the Consolidated Appropriations Act, 2021 (CAA 2021) was signed into law. Containing extensions and expansions of the PPP, it provides additional funding for what has been a popular provision with many small businesses included in the Coronavirus Aid, Relief and Economic Security (CARES) Act . . . allowing eligible employers to obtain forgivable loans for certain payroll and non-payroll purposes. Important changes from the CAA include:

• authorizing an additional $284 billion towards the PPP,
• extending the PPP to 3/31/2021, and
• allowing for Second Draw loans for certain smaller businesses that initially received a PPP loan (now known as a First Draw loan).

First and Second Draw loans

First Draw loans are for those borrowers who have not received a PPP loan prior to 8/8/2020. Second Draw loans are for eligible small businesses:

• with <=300 employees,
• that had previously received a First Draw loan and will use (or have used) the full amount only for authorized uses, and
• that can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

The maximum amount of a Second Draw loan is $2 million.

PPP portal re-opening

The SBA has now announced the re-opening its PPP loan portal.

• On 1/15/2021, PPP-eligible lenders with $1 billion or less in assets may begin submitting First and Second Draw loan applications.
• On 1/19/2021, the portal will fully open to all participating PPP lenders to submit First and Second Draw loan applications to SBA.

According to the Secretary of the Treasury, the goal of the PPP enhancements is to “allow small businesses to keep workers on payroll and connected to their health insurance”. 

(This is Blog Post #959)