Initially, only community financial institutions will be able to make First Draw PPP Loans on Jan. 11, and Second Draw PPP Loans on Jan. 13. The PPP will open to all participating lenders shortly thereafter.
Up to $284 billion is authorized by the PPP to go toward job retention and certain other expenses through March 31, and by allowing certain existing PPP borrowers to apply for a Second Draw PPP Loan.
“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 SBA Administrator Jovita Carranza in a prepared statement. “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.”
The PPP has thus far provided 5.2 million loans worth $525 billion to American small businesses, according to Treasury Secretary Steven Mnuchin.
Recent updates to the program allow PPP borrowers to set their period of coverage anywhere between 8 and 24 weeks depending on their business needs, and allow PPP loans to cover expenses that include operations expenditures, property damage costs, supplier costs, and worker protection expenditures.
Additionally, the program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, destination marketing organizations, among other types of organizations; and it provides greater flexibility for seasonal employees.
Under the updated guidance, certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and certain existing PPP borrowers are eligible to apply for a Second Draw PPP Loan.
Borrowers generally eligible for a Second Draw PPP Loan have previously received a First Draw PPP Loan and will or have used the full loan only for its authorized uses; have 300 employees or less; and can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.