SBA OPENS NEW ROUND OF PPP FIRST DRAW LOANS

The federal government’s Paycheck Protection Program (PPP) resumed this week with new funding. The US Small Business Administration opened the PPP loan portal on Monday, Jan. 11 at 9 a.m. to accept First Draw PPP loan applications from lenders.

WHAT CAN PPP FUNDS BE USED FOR?

First Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

WHO QUALIFIES FOR FULL FORGIVENESS?

First Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement employee and compensation levels are maintained, the loan proceeds are spent on payroll costs and other eligible expenses; and at least 60 percent of the proceeds are spent on payroll costs.

WHO CAN APPLY?

Eligible small entities, that together with their affiliates (if applicable), have 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors—can apply. Entities with more than 500 employees in certain industries that meet SBA’s alternative size standard or SBA’s size standards for those particular industries can also apply.

CAN I REAPPLY OR INCREASE MY LOAN?

Existing PPP borrowers that did not receive loan forgiveness by Dec. 27, 2020 may: (1) reapply for a First Draw PPP Loan if they previously returned some or all of their First Draw PPP Loan funds, or (2) under certain circumstances, request to modify their First Draw PPP Loan amount if they previously did not accept the full amount for which they are eligible.

HOW AND WHEN CAN I APPLY?

Borrowers can apply for a First Draw PPP Loan until March 31, 2021, through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, eligible non-bank lender, or Farm Credit System institution that is participating in PPP. 

HOW TO LEARN MORE?Visit http://bit.ly/3i4GY9t for full details on the new round of PPP loans.