Paycheck Protection Program reopened to community financial institutions, 2nd draw begins Jan. 13

by: Isabella Colello

Posted: Jan 12, 2021 / 10:01 AM EST / Updated: Jan 12, 2021 / 10:01 AM EST

FILE – In this April 2, 2020 file photo, a notice of closure is posted at The Great Frame Up in Grosse Pointe Woods, Mich. The government is closing in on the $349 billion lending limit on its Paycheck Protection Program that is sending relief money to the nation’s small businesses. The Small Business Administration says that it has approved more than 1.6 million loans worth more than $339 billion. The program will likely reach its ceiling Thursday, April 16. (AP Photo/Paul Sancya, File)

WASHINGTON, D.C. (WWTI) — A second round of the Paycheck Protection Program is now open.

The United States Small Business Administration, in consultation with the United States Treasury Department, reopened the Paycheck Protection Program loan portal on Monday with hopes to assist small businesses during the COVID-19 pandemic; focusing on First Draw PPP loans.

The Administration stated that First Draw PPP loans are for borrowers who did not receive a PPP loan before the program closed in August 2020.

According to the SBA, First Draw PPP loan applications will be initially accepted only from community financial institutions. This includes Community Development Financial Institutions, Minority Depository Institutions, Certified Development Companies, and Microloan Intermediaries.

The SBA, the listed lenders previously accounted for approximately 10% of all PPP participating lenders in 2020.

Additionally, following the initial reopening of the Program, participating CFIs may begin submitting application information to the SBA for Second Draw PPP loans on January 13, 2021. A Second Draw PPP loan is specific for eligible borrowers that previously received a PPP loan, have 300 employees or less, and have logged a 25% reduction in gross receipts.

The SBA confirmed that at least $15 billion has been designated for additional Paycheck Protection Program lending by Community Financial Institutions.

The Small Business Adminstration commented on the reopening of the program.

“The opening of the SBA loan system is designed to efficiently and effectively implement the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act and to ensure increased access to the PPP for minority-, underserved-, veteran- and women-owned small business concerns. SBA also is calling upon its lending partners to redouble their efforts to assist eligible borrowers in underserved and disadvantaged communities.”

Additional PPP Lender forms, guidance, and resources are available on the U.S. Small Business Administration website.