Paycheck Protection Program gets a fresh start
The U.S. Small Business Administration re-opened the Paycheck Protection Program (PPP) loan portal on Monday, Jan. 11 at 6 a.m. PST.
SBA is initially granting PPP access exclusively to community financial institutions (CFIs) that typically serve underserved small businesses with potential barriers to access to capital — lenders that made up only 10% of all PPP participating lenders in 2020.
The SBA said in a release, "When the PPP loan portal re-opened today, it initially accepted First Draw PPP loan applications from participating CFIs, which include Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs) and Microloan Intermediaries."
Businesses who have not yet had a PPP loan get first access as a part of the First Draw PPP.
On Wednesday, Jan. 13, the gates open a little wider, with Second Draw PPP.
That's when participating CFIs may begin submitting application information to SBA for Second Draw PPP loans. A Second Draw PPP loan is for eligible borrowers that previously received a PPP loan, generally have 300 employees or less, and has suffered a 25% reduction in gross receipts. At least $15 billion is set aside for additional PPP lending by CFIs.
The SBA is trying to avoid repeating $10 million loans going to large corporations such as Shake Shack and Castlight Health — both of which quickly returned the money.
The PPP program closed in August 2020.
Later this week, "additional lenders" will be able to submit First and Second draw PPP loan applications….SBA also is calling upon its lending partners to redouble their efforts to assist eligible borrowers in underserved and disadvantaged communities."
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