Paycheck Protection Program – Round 2 Interim Rules – Funding Opens Week of January 11
January 7, 2021
Updated 1/8/2021:
With a second round of Paycheck Protection Program loans officially on its way – this renewed PPP2 program is part of a $900 billion pandemic relief provision signed into law by President Trump on Dec. 27 – businesses and organizations are eager to know if, when, and how this assistance could help their operations.
The U.S. Small Business Administration (SBA) announced that it plans to begin a tiered opening for round 2 of the Paycheck Protection Program (PPP) the week of Jan. 11.
Starting Monday, Jan. 11, only certain types of community financial institutions will be able to make first-draw PPP loans, and on Wednesday, they will be allowed to make second-draw PPP loans. The full PPP will then open up to all participating lenders “shortly thereafter” according to a statement from SBA. This delay is the result of language in the Economic Aid Act which set aside funds for the smallest and hardest-hit small businesses. SBA, in another guidance document that was just released, outlines the steps it is taking to effectively implement the legislation by, among other items: “Accept PPP loan applications only from community financial institutions for at least the first two days when the PPP loan portal re-opens.” The exact date for a full opening of the PPP has not yet been published.
Late Wednesday, Jan. 13, the U.S. Small Business Administration announced the final phase of opening the 2nd round of the Paycheck Protection Program (PPP) will be finalized by Tuesday, Jan. 19. The announcement said that small banks can start processing applications on Friday, Jan. 15 with all approved lenders–including large banks–able to begin taking applications on Tuesday, Jan. 19.
Two final interim rules were published late Wednesday evening, Jan. 6, 2021, outlining the process for applying under the 2nd round of the PPP.
SBA also released guidance to lenders outlining the process by which an existing borrower under the first PPP could basically reapply for a higher amount first-draw than was initially approved if the borrower fully repaid the loan before Dec. 27 and no forgiveness payments have been made to the lender on that loan.
Additional Resources
The Community Bankers of Michigan has created this helpful resource on the Paycheck Protection Program Round 2.