The US Small Business Association (SBA) in consultation with the U.S. Treasury Department, reopened the Paycheck Protection Program (PPP) for First Draw PPP Loans the week of January 11, 2021. SBA and began accepting applications for Second Draw PPP Loans on January 13.
To promote access for smaller lenders and their customers, SBA will initially only accept Second Draw PPP Loan applications from participating community financial institutions (CFIs), which include Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs), and Microloan Intermediaries. Paycheck Protection Program lending will reopen to all participating lenders shortly thereafter. At least $25 billion is being set aside for Second Draw PPP Loans to eligible borrowers with a maximum of 10 employees or for loans of $250,000 or less to eligible borrowers in low or moderate-income neighborhoods.
Second Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.
A borrower is generally eligible for a Second Draw PPP Loan if the borrower:
o Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses
o Has no more than 300 employees; and
o Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020
If you wish to begin preparing your application, you can download the PPP borrower application form by clicking here to see the information that will be requested from you when you apply with a lender: