The Small Business Administration (SBA) has released the new applications for both first and second Paycheck Protection Program (PPP) Loan draws for small businesses. At least $15 billion is being set aside for First 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.
To promote access for smaller lenders and their customers, the SBA will initially only accept loan applications from community financial institutions (CFIs) starting on January 11, 2021. The PPP loan will open to all participating lenders shortly thereafter.
First Draw PPP Loans are for businesses that did not receive a PPP loan when the program was first open. Funds can be used to help fund payroll costs, including benefits, and may 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. SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses. The application can be found here.
Second draw PPP loans are available to certain eligible borrowers that previously received a PPP loan. It carries the same general loan terms as their First Draw PPP Loan and 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. The application can be found here.
As with the last round of PPP loans, applications will again be submitted through your financial institution, not the SBA website.
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