After initial eligibility only for community financial institutions (CFIs), the U.S. Small Business Administration has re-opened the Paycheck Protection Program (PPP) loan portal to all PPP-eligible lenders. The portal opened Jan. 19 to all participating lenders to submit first and second draw loan applications to SBA.
“SBA continues to support efforts to assist the smallest businesses and underserved communities while addressing potential barriers to access to capital. SBA is calling on its lending partners to redouble their efforts to assist eligible borrowers in these communities,” said SBA Utah District Director Marla Trollan.
Until last week, the new round of PPP lending was open only to CFIs, which include community development financial institutions, minority depository institutions, certified development companies and microloan intermediaries as part of the agency’s efforts to reach underserved and minority small businesses.
With all lenders now eligible, the SBA will continue its emphasis on reaching smaller lenders and businesses by opening to approximately 5,000 more lenders, including community banks, credit unions and farm credit institutions. The agency also plans to have dedicated service hours for the smaller lenders now that the portal is fully open.
“A second round of PPP could not have come at a better time and the SBA is making every effort to ensure small businesses have the emergency financial support they need to continuing weathering this time of uncertainty,” said SBA Administrator Jovita Carranza. “SBA has worked expeditiously to ensure our policies and systems are re-launched so that this vital small-business aid helps communities hardest-hit by the pandemic. I strongly encourage America’s entrepreneurs needing financial assistance to apply for a first or second draw PPP loan.”
First draw PPP loans are for those borrowers who have not received a PPP loan before Aug. 8, 2020. The first round of the PPP, which ran from March to August 2020, was a historic success, helping 5.2 million small businesses keep 51 million American workers employed, according to SBA officials.
Second draw PPP loans are for eligible small businesses with 300 employees or fewer, that previously received a first draw PPP loan and will use or have used the full amount only for authorized uses, and that can demonstrate at least a 25 percent reduction in gross receipts between comparable quarters in 2019 and 2020. The maximum amount of a second draw PPP loan is $2 million.
