New round of PPP loan funding now available from federal government
The latest round of federal Paycheck Protection Program (PPP) loans became available on Monday, 11 January, 2021, according to the U.S. Small Business Administration’s website.
The funding became available through the passage of the USD 900 billion (EUR 739.6 billion) COVID-19 relief bill Congress approved last month. Up to USD 284 billion (EUR 233.4 billion) be available to small businesses and other eligible entities through the federal program.
While companies that have not received a PPP loan previously may apply for one in this round, Congress also opened the door to those establishments needing additional support.
“This additional assistance will help prevent small businesses from having to shut their doors for good, allow them to continue paying their employees, and cover certain overhead costs, such as modifications to comply with public health guidelines,” U.S. Senator Susan Collins (R-Maine) said in a statement last month after U.S. President Donald Trump signed the spending bill into law.
The first PPP loans became available after the CARES Act was passed last March, with additional funding becoming available a month later. However, due to complex guidelines, some fishing-related entities did not become eligible to obtain a loan until late June.
By that time, approximately USD 517.1 billion (EUR 425 billion) of the USD 650 billion (EUR 534.2 billion) made available had been disbursed.
Under the program, first-time applicants are eligible to receive full forgiveness on their loan if workforce and compensation levels remain the same, 60 percent of loan proceeds are used on payroll costs, and other portions are allocated toward such costs as mortgage or rent payments, upgrades to protect workers from COVID, or repairing uninsured property damage caused by looting or vandalism.
Those seeking a second loan must continue to follow the same guidelines. In addition, they must have already spent their first loan or have it already allocated. They must also be able to show a 25 percent business loss in 2020 from the comparable quarter in 2019. Preference will also be given to companies with 300 or fewer workers.
According to SBA guidelines, the second loan is maxed at USD 2 million (EUR 1.6 million) or 250 percent of a company’s monthly payroll costs. Second draw applications will be taken starting on Wednesday, 13 January.
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