LI ARTS: Guidance on Second Round of PPP / Paycheck Protection Program Reopens This Week
The Small Business Administration (SBA) has now posted final guidance on the second round of PPP. The U.S. Small Business Administration, in consultation with the Treasury Department, announced that the Paycheck Protection Program will re-open the week of January 11 for new borrowers and certain existing PPP borrowers, and Second Draw PPP Loans on Wednesday, January 13.
The PPP will open to all participating lenders shortly thereafter.
Key PPP updates include:
- 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.
A borrower is generally eligible for a Second Draw PPP Loan if the borrower:
- 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.
You can read the full (and very technical) guidance here, and you may find more information on the SBA’s website helpful here. CNBC has a pretty good overview of general guidelines here.