SBA reopening Paycheck Protection Program to lenders Friday

The U.S. Small Business Administration (SBA) plans to reopen the Paycheck Protection Program (PPP) to small lenders on Friday (Jan. 15) and to all lenders next Tuesday.

The SBA and the Treasury Department said this week that PPP-eligible lenders with $1 billion or less in assets for “first draw” and “second draw” applications will be able to offer loans through the PPP portal on Jan. 15 starting at 9 a.m. ET. The portal will fully open on Jan. 19 to all participating PPP lenders to submit “first draw” and “second draw” applications.

First draw PPP loans are for borrowers who have not received a PPP loan before Aug. 8, 2020. Second draw PPP loans are for eligible small businesses with 300 employees or less, that previously received a first draw loan and will use or have used the full amount only for authorized uses, and that can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. The maximum amount of a second draw loan is $2 million.

“A second round of PPP could not have come at a better time, and the SBA is making every effort to ensure small businesses have the emergency financial support they need to continuing weathering this time of uncertainty,” SBA Administrator Jovita Carranza said in a statement. “SBA has worked expeditiously to ensure our policies and systems are re-launched so that this vital small business aid helps communities hardest hit by the pandemic. I strongly encourage America’s entrepreneurs needing financial assistance to apply for a First or Second Draw PPP loan.”

Earlier in the week, SBA granted dedicated PPP access to Community Financial Institutions (CFIs) which include Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs), and Microloan Intermediaries as part of the agency’s ongoing efforts to reach underserved and minority small businesses.

“This second round of Paycheck Protection Program funding is critical to helping Arkansas small businesses keep their doors open, save jobs, and support hard-working families across our state,” SBA Arkansas District Director Edward Haddock said in a statement. “Our trusted lenders are crucial to delivering PPP funding to our underserved businesses who need assistance the most during this challenging year. We are thankful to our network of banks, community financial institutions, microlenders, credit unions and other lenders for their participation in this newest round of PPP and for their continued commitment to providing much-needed relief to Arkansas small businesses struggling during the pandemic.”

The PPP was established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act approved by Congress in March to provide aid to individuals, businesses and state and local governments in response to the COVID-19 pandemic.

According to the Arkansas SBA office, the federal CARES Act provided around 42,928 Arkansas businesses with $3.3 billion in PPP loans last year.

Updated PPP lender forms and resources are available here.