Late on January 6, 2021, the Small Business Administration (the “SBA”) and the Department of Treasury released an Interim Final Rule called “Business Loan Program Temporary Changes;.
Paycheck Protection Program: Who Can Get It, And How It Works
With the latest COVID-19 relief package including $284 billion for small business loans under the Paycheck Protection Program (PPP), KHTS has compiled a breakdown of who can apply for these loans, and how they work.
As part of the most recent COVID-19 relief package signed at the end of December, $284 billion was allocated for PPP loans, providing much-needed relief to struggling small businesses across the country.
Under the PPP, small business owners apply for the loan with a bank, which then either approves or denies that loan. The U.S. Treasury Department is then set to essentially forgive the debt, allocating billions of dollars to pay the banks back the loaned out money.
Monday, January 11, 2021
On January 8, 2021, the U.S. Department of the Treasury, in connection with the Small Business Administration, announced that the Paycheck Protection Program (PPP) will reopen the week of January 11 for new borrowers and certain businesses that have already received PPP loans.
Community financial institutions may begin making PPP loans to new or “first draw” borrowers on January 11, while “second draw” borrowers can do so from these lenders beginning January 13. Thereafter, all other participating lenders may begin disbursing funds. This new wave of PPP loans will be available through March 31. Existing PPP borrowers can request to increase their first draw PPP loan amount to the extent it returned or did not accept the full amount of a PPP loan for which it was approved (First Draw Increase).
On January 6, 2021, Treasury issued two new Interim Final Rules (IFRs) addressing the new Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act’s (Act) creation of PPP Second Draw Loans, and the Act’s various changes to PPP requirements generally. The major PPP components of the Act are set forth in detail in Buchalter’s COVID Alert of December 28, 2020 (Buchalter PPP Changes Alert), which can be found here.
While discussing the Act’s requirements in some detail, the two IFRs made several key clarifications not fully spelled out, or left ambiguous, in the Act:
The time to obtain a PPP loan is extended to March 31, 2021.
As we have reported, the stimulus bill passed by Congress and signed by President Trump late last year enacted major changes to the popular Paycheck Protection Program (PPP). And this.