The paycheck protection program, which restarted this week with $ 284 billion in pandemic relief loans for U.S. small businesses, will open to small banks on Friday and to all lenders next Tuesday.
Banks with $ 1 billion or less in assets will be able to send out requests for first-time business owners seeking a PPP loan and those requesting a second Friday at 9 a.m., the US Small Business Administration said. All PPP lenders will have access to the agency’s lending portal next week.
As of Monday, the SBA had made the loans exclusively available to community lenders – including community development finance institutions, minority depositories, and certified development companies – with the aim of reaching some of the businesses. the smallest and most vulnerable who were left behind in the first round. The first two days were for business owners who applied for the first time.
The agency did not say how many loans have been made since Monday. Congress approved additional PPP funding in the Covid-19 relief plan which was adopted in December, after the initial PPP program ended in August with more than 5.2 million loans worth around 525 billion of dollars.
“The SBA has worked diligently to ensure that our policies and systems are revived so that this vital small business aid helps communities hardest hit by the pandemic,” SBA Administrator Jovita Carranza said on Wednesday. , in a press release.
With the new money, businesses will be able to apply for a second loan, but there are stricter rules. Companies can have a maximum of 300 employees, compared to 500 previously, and the maximum loan amount this time is $ 2 million, compared to $ 10 million. Applicants must also prove that income has decreased by at least 25% during a quarter in 2020 compared to the previous year. Loans are forfeited when used to cover payroll and other approved expenses, including property damage costs, vendor costs, and personal protective equipment for employees.
The SBA has warned that the additional fraud filters and identity checks put in place this round will result in longer turnaround times for loan approval. Widespread fraud during the first round of PPP loans prompted the agency to add additional control to the loan application process.
Alan Lane-Murcia, SBA program manager at First American Bank, said the SBA has told banks they may have to wait one to five days for an application to be submitted when a loan number is issued. The bank must then finalize the loan, he said. That means it could be the last week of January or early February until many PPP applicants actually receive the money, he said.
“I’m going to go with the number five days and if I get it in two I’ll be happy,” Lane-Murcia said. “People are anxious, they need capital. “