- January 12, 2021
- Posted by: Stratford Team
- Category: Business
The feds opened the third round of a massive COVID-19 relief program for small businesses Monday amid a surge in infections that’s killing thousands of Americans a day.
The latest iteration of the Paycheck Protection Program will provide up to $284 billion in forgivable, government-backed loans to help qualifying firms survive the pandemic-fueled economic crisis that’s lasted more than 10 months.
The money was included in the $900 billion coronavirus relief package Congress passed in late December as several states imposed lockdown measures to curb a record-setting surge in COVID-19 cases.
The new batch of funding will extend aid to some of the millions of businesses that participated in the program last year, as well as those seeking help for the first time. The feds have also tweaked the program’s parameters to expand access to the money and improve flexibility for participants.
The new guidance “builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to ensure their path to recovery,” SBA Administrator Jovita Carranza said in a statement on Friday.
For instance, only smaller community banks will be able to make loans to first-time borrowers on Monday and then to repeat borrowers starting Wednesday. Larger banks will be able to begin lending new PPP money “shortly thereafter,” according to the SBA.
The shift followed criticism that the first rounds of the program made it easy for big businesses to get loans while smaller firms — especially those owned by women and minorities — struggled to get as much money.
The new rules also expand eligibility for the loans to housing cooperatives, tourism boards and other organizations, as long as they have no more than 300 employees. Other first-time applicants can have up to 500 employees.
Companies that got an initial loan last year can also seek a second loan as large as $2 million — but only if they have 300 or fewer employees. They’ll also have to show that their sales in at least one quarter of this year dropped by 25 percent or more from the prior year’s levels.
Federal officials told reporters last week that they expected the latest round of funding would be enough to meet the demand for relief.
Lenders burned though the first $350 billion in PPP money in just two weeks last April. Congress then approved another $310 billion in funding, much of which went untouched. The SBA says it doled out 5.2 million PPP loans worth $525 billion in all last year.
With Post wires