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SBA and Treasury
Announce PPP Re-Opening; Issue New Guidance
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. To promote access to capital,
initially only community financial institutions will be able to
make First Draw PPP Loans on Monday, January 11 and Second Draw PPP
Loans on Wednesday, January 13. The PPP will open to all
participating lenders shortly thereafter. Updated PPP guidance
outlining Program changes to enhance its effectiveness and
accessibility was released on January 6 in accordance with the
Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues
Act.
This round of the PPP
continues to prioritize millions of Americans employed by small
businesses by authorizing up to $284 billion toward job retention
and certain other expenses through March 31, 2021, and by allowing
certain existing PPP borrowers to apply for a Second Draw PPP Loan.
“The Paycheck
Protection Program has successfully provided 5.2 million loans
worth $525 billion to America’s small businesses, supporting more
than 51 million jobs,” said Secretary Steven T. Mnuchin. “This
updated guidance enhances the PPP’s targeted relief to small
businesses most impacted by COVID-19. We are committed to
implementing this round of PPP quickly to continue supporting
American small businesses and their workers.”
“The historically
successful Paycheck Protection Program served as an economic
lifeline to millions of small businesses and their employees when
they needed it most,” said Administrator Jovita
Carranza. “Today’s guidance builds on the success of the
program and adapts to the changing needs of small business owners
by providing targeted relief and a simpler forgiveness process to
ensure their path to recovery.”
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.
The new guidance
released includes:
·
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.
For more information
on PPP second draw please contact Scott Touro, MBA at stouro@hsccpa.com
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