Detroit Regional Chamber > SBA Announces Reopening of PPP for Jan. 11, Outlines New Guidance

SBA Announces Reopening of PPP for Jan. 11, Outlines New Guidance

January 8, 2021

The U.S. Small Business Administration today announced that the Paycheck Protection Program (PPP) will reopen the week of Jan. 11 for new borrowers and certain existing borrowers. This applies to both first and second draw loans. For companies interested in applying for a new PPP loan, the Chamber strongly urges you to promptly consult with your financial institution and tax advisor to ensure you have the latest information as elements are still evolving and are prepared to act as the loan funds become available.

Key updates to this round of funding include:

Borrowers can set their loan covered period to be any length between eight and 24 weeks to best meet their needs.
Loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures.
Eligibility is expanded to include 501(c)(6)s, housing cooperatives, direct marketing organizations, among other types of organizations.
Greater flexibility for seasonal employees.
Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount.
Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.

View the full announcement below.

WASHINGTON – The U.S. Small Business Administration (SBA), in consultation with the Treasury Department, announced today that the Paycheck Protection Program (PPP) will reopen the week of Jan. 11 for new borrowers and certain existing PPP borrowers. To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, Jan. 11, and Second Draw PPP Loans on Wednesday, Jan. 13. The PPP will open to all participating lenders shortly thereafter. Updated PPP guidance outlining Program changes to enhance its effectiveness and accessibility was released on January 6 in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act.

This round of the PPP continues to prioritize millions of Americans employed by small businesses by authorizing up to $284 billion toward job retention and certain other expenses through March 31, 2021, and by allowing certain existing PPP borrowers to apply for a Second Draw PPP Loan.

“The historically successful Paycheck Protection Program served as an economic lifeline to millions of small businesses and their employees when they needed it most,” said Administrator Jovita Carranza. “Today’s guidance builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to ensure their path to recovery.”

Key PPP updates include:

PPP borrowers can set their PPP loan’s covered period to be any length between eight and 24 weeks to best meet their business needs;
PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, destination marketing organizations, among other types of organizations;
The PPP provides greater flexibility for seasonal employees;
Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.

A borrower is generally eligible for a Second Draw PPP Loan if the borrower:

Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
Has no more than 300 employees; and
Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

The new guidance released includes:

For more information on SBA’s assistance to small businesses, visit sba.gov/ppp or treasury.gov/cares.