US Small Business Administration Administrator Jovita Carranza speaks as US Treasury Secretary Steven Mnuchin listens to a House Small Business Committee hearing in Washington, DC
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The Paycheck Protection Program will reopen on January 11th. It provides loans to small businesses to no avail and allows certain cash-strapped businesses to borrow a second time, according to the US Small Business Administration.
Congress approved up to $ 284 billion for the small business loan program under the comprehensive Covid Relief Act, which went into effect in late 2020.
That move also included additional small business aid in the form of tax deductibility for expenses covered by PPP, tax credits for businesses that kept their employees on payroll, and made it easier to get loans under $ 150,000.
This time the SBA and the finance department have staggered the reopening.
This means that initially only community financial institutions – including banks and credit unions that lend to low-income communities – can submit PPP loan applications on Jan. 11.
They will offer second PPP loans to qualifying companies starting Jan. 13, the SBA said.
Firms receiving a second infusion of loan proceeds must meet certain qualifications, including no more than 300 employees and a reduction in gross income of at least 25% in any quarter between 2019 and 2020.
According to the agency, the program will be reopened to all participating lenders shortly afterwards.
“Today’s guidelines build on the success of the program and adapt to the changing needs of small business owners by providing targeted assistance and an easier forgiveness process to ensure their path to recovery,” said Jovita Carranza, administrator of the SBA.