(From a press release by the O’Fallon Economic Development Department)
the US Small Business Administration (SBA), in consultation with the Treasury Department, announced today that the Paycheck Protection Program (PPP) will reopen for new borrowers and certain existing PPP borrowers in the week of January 11th. Only Community Financial Institutions can issue first drawing PPP loans on Monday January 11th and second drawing PPP loans on Wednesday January 13th. The PPP will be opened to all participating lenders shortly afterwards. Updated PPP guidelines with the program changes to improve effectiveness and accessibility were released on January 6th in accordance with the Law on Economic Aid to Hardly Affected Small Businesses, Nonprofits and Venues.
This PPP round continues to prioritize millions of Americans who work in small businesses by May 31st.
The most important PPP updates include:
- PPP borrowers can set the duration of their PPP loan to any length between 8 and 24 weeks to best suit their business needs.
- PPP loans cover additional expenses, including operating expenses, property damage costs, supplier costs, and employee protection expenses;
- Eligibility for the program is extended to 501 (c) (6) s, housing associations, destination marketing organizations, and other types of organizations;
- The PPP offers more flexibility for seasonal workers;
- Certain existing PPP borrowers may request to change their PPP loan amount for the first drawing; and
- Certain existing PPP borrowers are now eligible to apply for a second draw PPP loan.
A borrower is generally eligible for a second-drawing PPP loan if the borrower:
- Previously received an initial education PPP loan and used or used the full amount for authorized purposes only;
- Has no more than 300 employees; and
- Can demonstrate a reduction in gross income of at least 25% between comparable quarters of 2019 and 2020.
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