The U.S. Small Business Administration (SBA), in connection with the Treasury, announced that the application window for Paycheck Protection Program (PPP) Loans will open Friday, January 15th for lenders with $1 billion or less in assets. The program will begin accepting applications for first- and second-draw loans from large lenders on Tuesday, January 19th. PPP reopened initially for community financial institutions (CFIs) to make loans to first-time PPP borrowers. CFIs were allowed to make second-draw loans to borrowers starting Wednesday. Borrowers can apply for first- and second-draw loans until March 31, 2021 or until the $284 billion appropriation is exhausted.
Eligibility – First Draw Borrowers
- Eligible small entities, that together with their affiliates (if applicable), have 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors—can apply. Entities with more than 500 employees in certain industries that meet SBA’s alternative size standard or SBA’s size standards for those particular industries can also apply.
- Businesses with a NAICS Code that begins with 72 (Accommodation and Food Services sector) or eligible news organizations with no more than 500 employees per physical location, as well as housing cooperatives, 501(c)(6) organizations, or destination marketing organizations with no more than 300 employees.
Eligibility – Second Draw Borrowers
- 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.
Next Steps
Borrowers should contact their lender to determine when they will begin accepting applications and the process to submit an application. Borrowers are urged to evaluate their eligibility for a first- or second-draw loan based on the criteria published by the SBA and Treasury. Please contact your Brown Edwards’ professionals if you have any questions about the Paycheck Protection Program.
