The Small Business Administration has reopened the PPP loan portal (January 11, 2021 at 9am EST) to community financial institutions (CFI’s) which include Community Development Financial Institutions, Minority Depository Institutions, Certified Development Companies and Microloan Intermediaries. A first draw PPP is for those borrowers who have yet to receive a PPP loan before the program closed in August 2020. When the portal reopened, it initially accepted First Draw PPP loan applications from CFI’s. On January 13, participating CFI’s may begin submitting applications information to SBA for Second Draw PPP loans. A second draw PPP loan is for certain eligible borrowers that previously received a PPP loan, generally have less than 300 employees and has suffered a 25% reduction in gross receipts. At least $15B is set aside for additional lending by CFI’s.
A few days later, additional lenders will be able to submit to First and Second Draw PPP loan applications. SBA will continue to provide updates on systems operations during the week of January 11, 2021. Additionally, SBA plans to dedicate specific times to process and assist the smallest PPP lenders with loan applications from eligible small businesses.
The opening of the SBA loan system is designed to efficiently and effectively implement the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act and to ensure increased access to PPP for minority, underserve, veteran and women owned businesses concerns. SBA also is calling upon its lending partners to redouble their efforts to assist eligible borrowers in underserved and disadvantaged communities.
We recommend speaking with your accountant or bookkeeper and banker about the PPP, whether your business qualifies, the documentation you will need to have on hand and how to apply. The SBA issued an interim final rule as guidance for first time PPP applicants and others.