The U.S. Small Business Administration (SBA), together with the U.S. Treasury Department, on Monday morning reopened the loan portal for the Paycheck Protection Program (PPP), the forgivable-loan initiative seeking to help small companies survive the COVID-19 pandemic’s economic dislocations.
The portal initially granted PPP access exclusively to community financial institutions (CFIs) which include smaller and local banks, credit unions, community development financial institutions (CDFIs), minority depository institutions (MDIs), certified development companies (CDCs), and microloan intermediaries. It’s an effort to help underserved small businesses and address potential barriers to capital access, since CFIs typically work with underserved businesses. These lenders made up about 10 percent of all PPP participating lenders in the program in 2020, the SBA said.
The first two days of the portal’s opening are designated for first-draw PPP loan applications, or those for borrowers that haven’t yet received a PPP loan before the program closed in August 2020.
On Wednesday, participating CFIs will be allowed to begin submitting application information to the SBA for second-draw PPP loans, which are for certain eligible borrowers that previously received a PPP loan, generally have 300 employees or less, and have suffered a 25-percent reduction in gross receipts. At least $15 billion is set aside for additional PPP lending by CFIs.
A few days later, additional lenders will be able to submit first and second-draw PPP loan applications, the SBA said.
Updated PPP lender forms, guidance, and resources are available at www.sba.gov/ppp. The application for second-draw PPP loans is available at: https://home.treasury.gov/system/files/136/PPP-Second-Draw-Borrower-Application-Form.pdf