The New Year Brings Renewed Hope For Small Businesses With Second PPP Program

Some small businesses were able to stay alive only because of the initial Payroll Protection Program launched by the Small Business Association and Treasury Department last year. However, despite receiving a PPP loan, some businesses were not able to make it. Many businesses are still hanging on, some through sheer determination. And now, fortunately, there is relief in sight once more as the Small Business Administration and the Treasury Department have relaunched a second Paycheck Protection Program.

According to a January 11th article posted at, “The program, funded with $284.5 billion thanks to the latest stimulus package passed by Congress late last month, opened Monday to so-called “first draw” PPP loans for those small businesses who didn’t take advantage of the program last year. “Second draw” PPP loans will be available starting Wednesday. Initially only community financial institutions will be able to make the first-draw and second-draw loans, but the SBA and the Treasury said Friday that the program would be open to other lenders shortly thereafter.”

Updates To The Program

Initially there were some expenses that were not allowed under the original PPP program. However, many of those restrictions were reversed, which I wrote about in this month’s blog and is great news for business owners this tax season. (see: No Deduction Denied)

The SBA has also published some of the main updates to the program which include the following:

  • 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.
  • PPP eligibility has expanded to include 501(c)(6)s, housing cooperatives, destination marketing organizations, along with other kinds of organizations.
  • The PPP now offers more flexibility for seasonal employees.
  • Some existing PPP borrowers can request to modify their first-draw PPP loan amount.
  • Some 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:

Good News For Business Owners In Low and Moderate Income Communities

Some of the hardest hit businesses are those in low- and moderate-income communities. The SBA has addressed these areas with specific set aside funds. The set asides are meant for new and smaller borrowers, for borrowers in low- and moderate-income communities and for community and smaller lenders.

These set asides include:

• $15 billion across first and second draw PPP loans for lending by community financial institutions

• $15 billion across first and second draw PPP loans for lending by Insured Depository Institutions, Credit Unions, and Farm Credit System Institutions with consolidated assets of less than $10 billion

• $35 billion for new first draw PPP borrowers; and

• $15 billion and $25 billion for first draw and second draw PPP loans, respectively, for borrowers with a maximum of 10 employees or for loans less than $250,000 to borrowers in low-or moderate-income neighborhoods.

SBA has determined that at least 25 percent of each of those set-asides will go to each one of the groups.

Apply For Your PPP Loan Without Delay

We are all doing our best to stay in business and help the economic recovery in this country. If you need another draw or a first draw, apply for the PPP program immediately. Those who applied last year are seeing tax rewards and the same will be true come 2021 tax season.

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