[ad_1]
A new round of paycheck protection program funds will begin to be available to select lenders and borrowers on Monday, according to senior administration officials.
Community financial institutions – around 10% of eligible lenders – will be able to start accepting loan applications on Monday for entities wanting their first PPP loans. Those same lenders may begin processing second-round loans for small businesses and nonprofits that have already used up their first loan on Wednesday, officials said on a call with reporters on Friday. The loan portal will be available to other eligible lenders and borrowers shortly thereafter.
Businesses may have to wait longer for their loan to be processed than in the spring. Applications will go through a series of automated checks before a loan number is issued. It could take about a day, officials said.
Making the loans exclusively available to community lenders for several days and additional identity checks are meant to correct some of the confusion and fraud seen in the first round in the spring. The program ran out of money within days as businesses rushed to claim the funds with few eligibility restrictions. Many very small businesses with no close ties to a lender were left out of the process and were unable to secure funding.
“These updated guidelines improve targeted PPP assistance for small businesses most affected by COVID-19,” Treasury Secretary Steven T. Mnuchin said in a statement Friday. “We are committed to rapidly implementing this cycle of PPP to continue supporting American small businesses and their workers.”
Officials said they did not anticipate the system would be inundated with demands this time around and that the $ 284 billion Congress approved for this cycle would not run out.
Updated forms to apply for the loans are not yet available, but are expected to be released soon, an official said.
Eligibility changes
The new pot of money sets aside $ 60 billion for businesses that haven’t been able to access the process so far, and it focuses on businesses with 10 or fewer employees or those in low-income areas. The initiative also has $ 30 billion to help build the capacity of active lenders in underserved areas – including community development finance institutions, minority custodian hunches and other small lenders.
Businesses eligible for a second loan will be capped at 300 employees, up from 500, and the maximum loan amount this time around is $ 2 million, down from $ 10 million. Applicants must also prove that income decreased by at least 25% during a quarter of the pandemic from the previous year.
The streamlined process for those applying for a loan of $ 150,000 or less means that loan applicants simply need to certify that they meet income reduction requirements at the time they apply for a loan and provide documentation of lost income to a later date. The loan forgiveness process is also simplified.
Eligibility rules are also more flexible in this round. Housing co-ops, direct marketing organizations and 501 (c) (6) organizations, such as chambers of commerce and trade associations, are eligible to apply. PPP loans can be used to cover more expenses, including operating expenses, property damage costs, vendor costs, and employee personal protective equipment.
The influx of cash comes at a critical time, with more than 60% of businesses believing that the worst of the pandemic-related economic crisis is yet to come, according to a recent House survey of 600 small business owners. of American trade. and insurer MetLife Inc. About half of survey respondents said they will have to close their doors within a year, unless the economy improves.
[ad_2]
Source link
