The Paycheck Protection Program is reopening on Jan. 11 for new borrowers and some existing borrowers.
This round of the PPP authorizes up to $284 billion to help Americans employed by small businesses remain employed. The PPP will cover payroll and other expenses through March 31, 2021. It also allows certain existing PPP borrowers to apply for a second draw PPP loan, the U.S. Small Business Administration, announced on Jan. 8.
Initially, only community financial institutions will be able to make first draw PPP loans on Monday, Jan. 11, and second draw PPP loans on Jan. 13. The PPP will open to all participating lenders a little while after that.
To date, the following Guam lenders have expressed their interest in participating in this second round of lending, said SBA Guam branch General Manager Kenneth Lujan:
• Bank of Guam
• Bank of Hawaii
• Bank of the FSM
• Coast 360 Federal Credit Union
• Community First FCU
• First Hawaiian Bank
“The historically successful Paycheck Protection Program served as an economic lifeline to millions of small businesses and 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.”
“The Paycheck Protection Program has successfully provided 5.2 million loans worth $525 billion to America’s small businesses, supporting more than 51 million jobs,” said Treasury Secretary Steven T. Mnuchin. “This updated guidance enhances the PPP’s targeted relief to small businesses most impacted by COVID-19. We are committed to implementing this round of PPP quickly to continue supporting American small businesses and their workers.”
Key PPP updates include:
• PPP borrowers can set their PPP loan’s covered period to be any length between 8 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, direct 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.