The Small Business Administration (SBA), in consultation with the Treasury Department, announced on January 8, 2021, that the Paycheck Protection Program (PPP) will re-open the week of January 11 for new borrowers and certain existing PPP borrowers. An additional round of funding under the Paycheck Protection Program is available as part of the $900B stimulus and economic relief package (December 2020) and is available for: privately held businesses, nonprofits, eligible self-employed individuals, sole proprietors, independent contractors (and others).
Here is a summary of the SBA release and our team’s guidance – please contact us with your questions.
When Is the New PPP Open?
To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11 and Second Draw PPP Loans on Wednesday, January 13. The PPP will open to all participating lenders shortly thereafter, according the Treasury.gov post. Once the PPP loan portals are open, the last day to apply for and receive a PPP Loan is March 31, 2021
Application Priority is First Draw PPP1, Then Second Draw PPP2
As explained above, the “first draw” PPP1 loans have been given a head start so new borrowers can engage with approved SBA lenders. The “second draw” PPP2 loans are limited, and while Congress has approved $284 million in new loans, the money is likely to go much faster this time around now that forgiveness and tax rules are clearer.
The maximum PPP loan sizes are $2 million or a $4 million aggregate maximum for borrowers considered a single corporate group with a 5-year maturity. Many of the other details, such as covered period or interest rate on unforgiven loans, remain the same.
Latest PPP, Economic Relief News & Analysis from Lurie
For More Information
Lurie’s Economic Relief Team is reviewing 120+ pages of IFR language and will be providing additional PPP updates to our SBA Loans & Resources Hub. The Small Business Administration’s website, SBA.gov, will have additional news and information, here.
For more information, please contact your Lurie advisor for questions, or contact us for assistance with both new application and PPP loan forgiveness guidance. We’re here to help.