Small Business Administration's Paycheck Protection Program to re-open next week
- by Johnnie Parks
- in Money
- — Jan 9, 2021
In New York's 18 Congressional District, over 11,070 small businesses utilized the PPP in the first round of loan disbursement, helping keep over 96,000 workers on the payroll.
With the new money, businesses will be able to apply for a second loan, but there are stricter rules.
The U.S. Small Business Administration approved 5 million PPP loans, totaling $500 billion, in the first round of the program, which ended August 8.
Some PPP borrowers can request to modify their First Draw PPP Loan amount. The program had previously encouraged banks to give priority to big loans over small ones. The initiative also has $30 billion to help boost capacity at lenders active in under-served areas - including community development financial institutions, minority depository intuitions and other small lenders.
More news: Lockdown Restrictions Could Stay In Place Until 31 MarchThe PPP will open to all participating lenders shortly thereafter, but officials did not offer a specific timeframe. Going forward, businesses must be able to demonstrate that at least a 25% drop in revenue occurred over an entire quarter previous year. The PPP differs from other SBA programs, since financial institutions actually process the applications. He urged every small business owner who needs assistance to apply for their first - or second - PPP loan as soon as possible.
For businesses seeking a second loan, they must have used the full amount of their first PPP loan or plan to do so before the funds from the second draw will be disbursed.
"From day one, our goal has been to step in and try to help consumers and businesses get back on their feet by providing access to credit via the PPP". In order to be eligible for a second draw loan, the small business may have no more than 300 employees (down from 500 employees for general PPP loan eligibility).
In the first round, businesses had to pick either eight or 24 weeks. The process to get the loan forgiven is also simplified.
More news: Spreading virus pulls Olympic torches off display in JapanThose who borrowed $150,000 or less through the PPP will no longer be required to provide as detailed of an account of how funds were spent.
The American Bankers Association is the voice of the nation's $21.2 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $17 trillion in deposits and extend almost $11 trillion in loans.
Will the loans require collateral or personal guarantees?
Requirements were later revised after larger companies circumvented small business requirements by applying through smaller corporate entities.
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