PPP Round 2: What small business owners need to do right now to get help

Originally from Syracuse.com

Syracuse, N.Y. — The $900 billion stimulus relief bill contains $284 billion for a second round of loans to small businesses under the federal government’s Paycheck Protection Program.

The U.S. Small Business Administration approved 5 million PPP loans, totaling $500 billion, in the first round of the program, which ended Aug. 8. The program helps businesses harmed by the economic shutdowns during the coronavirus pandemic and to avoid layoffs.

The SBA has issued rules for the second round. It opens next week, so don’t dawdle.

Here’s what business owners need to know:

Can a business apply for a second loan if it received one in the first round?

Yes, businesses can receive a second loan — called a second draw — if they have spent the entire amount of the first loan on or before the date the second loan is disbursed, and they still need help. (However, it is unclear if borrowers who returned unused portions of their first loans are eligible for a second loan, according to the Bond, Schoeneck & King law firm.)

When and how can businesses apply?

The loans will be made through SBA‑approved lenders and guaranteed by the SBA. So businesses must apply to those lenders by filling out the application forms provided by the bank. It’s a good idea for applicants to check first with banks they already have relationships with to see if they will be making PPP loans. They can also check the SBA’s list of lenders participating in the PPP program.

When can borrowers apply?

Community financial institutions will be able to make first draw loans (loans to businesses that have not previously received a PPP loan) starting on Monday, Jan. 11, and second draw loans (loans to businesses that have previously received one) starting on Wednesday, Jan. 13. The program will open to all participating lenders shortly thereafter.

The Economic Aid Act defines community financial institutions as four types of lenders: community financial development institution, minority depository institution, community development corporation and microlender intermediary.

Read the full article from Syracuse.com here