SBA, Treasury Re-open PPP, Issue New Guidance

January 12, 2021

The Small Business Administration and U.S. Treasury Department announced the Paycheck Protection Program (PPP) re-opened the week of Jan. 11. Congress recently added $284 billion in new loan forgiveness authority for new borrowers and certain existing PPP borrowers. 

Community financial institutions have the first opportunity to access funds and make loans. All participating lenders will gain access after this week. This round of the PPP continues to allow small business borrowers to have their loans forgiven if they spend the funds on job retention and certain other expenses through March 31. Additionally, existing PPP borrowers can apply for a Second Draw PPP Loan.

Key PPP updates include:

  • PPP borrowers can set their PPP loan's covered period at any length between eight 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 and 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
  • 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
  • Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020


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