Government

SBA re-opens PPP for small businesses

Over $15bn has been set aside for the scheme

The US Small Business Administration (SBA) has reopened the Paycheck Protection Program (PPP) in consultation with the US Treasury Department as of 11 January.

By initially granting PPP access exclusively to community financial institutions (CFIs), the SBA is targeting underserved small businesses through the scheme.

A total of over $15bn has been set aside for additional PPP lending by CFIs in an effort to “efficiently and effectively implement the economic aid to hard-hit small businesses”, as well as ensuring access to the funds for “minority, underserved, veteran, and women-owned small business concerns”.

The loan portal commenced by accepting first draw PPP loan applications, open to those institutions that did not receive a PPP loan before the program closed in August 2020.

Those first draw participating CFIs constituted roughly 10% of all PPP participating lenders in 2020, according to the SBA.

A second draw PPP will be opened up to participating CFIs from 13 January, targeting eligible borrowers who have previously received a PPP loan.

Those eligible will also include companies that “generally have 300 employees or less” and have “suffered a 25% reduction in gross receipts”.

The SBA has also called upon its lending patterns to widen their efforts in assisting eligible borrowers in disadvantaged communities.

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