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SBA PPP Small Business Loans: Second PPP Funding Round for SMBs

Amid COVID-19 economic fallout, many small businesses with 500 or fewer employees need to navigate the CARES Act and Paycheck Protection Program (PPP) for emergency loans and grants.

Guidance from the Small Business Administration (SBA), the U.S. federal government & banks evolved over time. And a new, second round of PPP funding will be available soon.

Check this blog for ongoing CARES Act and SBA updates involving:

  1. The Paycheck Protection Program;
  2. EIDL Loan Advance;
  3. SBA Express Bridge Loans; and
  4. SBA Debt Relief.

Blog originally published Sunday, April 5, 2020. Updates are ongoing.


Tuesday, January 19:

  • In the program’s first week, the SBA approved around 60,000 applications from nearly 3,000 lenders. Those applications totaled $5 billion, consuming around 2 percent of the $284 billion the program has available to lend. Source: The New York Times, January 19, 2021.
  • The PPP loan portal will fully open today, January 19, 2021 to all participating PPP lenders to submit first- and second-draw PPP loan applications. Source: Newtek.

Saturday, January 9

The U.S. Small Business Administration (SBA), working with the Treasury Department, will re-open the Paycheck Protection Program the week of January 11, 2021, for new borrowers and certain existing borrowers. Details from the SBA include:

  • To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13.

Additional key PPP updates, according to the SBA, include:

  • PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;
  • PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
  • The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, destination marketing organizations, among other types of organizations;
  • The PPP provides greater flexibility for seasonal employees;
  • Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
  • Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.

A borrower is generally eligible for a Second Draw PPP Loan if the borrower:

  • Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
  • Has no more than 300 employees; and
  • Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

The new guidance released includes:

For more information on SBA’s assistance to small businesses, visit sba.gov/ppp or treasury.gov/cares.


Jim Turner, EVP of Hilltop Consultants, an Intelliteach Company

Friday, January 8

  • PPP and Small Business Cloud Software: The new PPP legislation updates the definition of operational expenditures eligible for PPP funds to include any business software or cloud computing service facilitating business operations, product or service delivery, human resources and other expenses, according to the bill. Source: CIO Dive, January 6, 2020.
  • MSP Lobbied for Outsourced IT Funding: Hats off to Jim Turner, EVP of business development at Hilltop Consultants, an Intelliteach Company. Turner lobbied for PPP funding legislation to include money for outsourced IT spending. As the Small Business Cloud Software blurb above suggests, Turner’s petition apparently was heard. Source: Change.org

Thursday, January 7, 2021:

Isabel Guzman: Next SBA leader?

  • PPP Round Two – Small Lenders Head Start: The Small Business Administration plans to give small lenders a head start with this round two program. In its first two days, the program will accept loan applications only from community lenders like Community Development Financial Institutions, which specialize in working with low-income borrowers and in areas underserved by larger lenders. Source: The New York Times, January 7, 2021.
  • Second Loans Exceeding $150,000: For second loans of more than $150,000, applicants will need to provide their lender with records proving their sales have declined. Lenders will need to do a “good faith review” of those documents. Source: The New York Times, January 7, 2021.
  • Second Loans Below $150,000: For smaller loans, borrowers will not need to provide their sales records as part of their application, but the SBA can request them later. Source: The New York Times, January 7, 2021.
  • New SBA PPP Leader – Biden’s Nomination: President-elect Joe Biden has chosen Isabel Guzman, a California economic development official, to lead the Small Business Administration. The pick is subject to approval. Source: The Wall Street Journal, January 7, 2021.

Wednesday, January 6, 2021:

  • PPP Deductions – IRS Guidance: The Internal Revenue Service and the Treasury Department released guidance today on claiming deductions for expenses associated with Paycheck Protection Program loans that have been forgiven. Source: Accounting Today, January 6, 2021.

Monday, January 4, 2021:

  • Flushing Financial Corporation, the parent holding company for Flushing Bank, will again participate in the Paycheck Protection Program (PPP) to provide capital to small businesses within the communities it serves, the organization says. Flushing Bank will post PPP loan application details here once the latest SBA guidance surfaces.


Wednesday, December 30, 2020:


Sunday, December 27, 2020:

  • Trump Signs Bill: President Trump signed a sweeping pandemic-aid bill on Sunday night ending a standoff with Congress and paving the way for millions of Americans to get economic relief as the coronavirus pandemic surges across the country. Source: Wall Street Journal, December 27, 2020.
  • Related: The bill includes $284 billion in funds for the Paycheck Protection Program (PPP). Businesses that already received a PPP loan will be eligible to get a second one under the new terms. Some of the PPP funds will be set aside for the smallest businesses and community-based lenders. Source: The Hill, December 20, 2020.

Wednesday, December 23, 2020: 

  • Fewer PPP Lenders Expected: If Congress and President Trump can agree on a second round of PPP lending, small businesses should expect fewer lenders to participate in the second round of Paycheck Protection Program loans. The reason: Some lenders are suffering from ‘PPP fatigue’ because of the program’s chaotic rollout and ever-shifting regulations earlier this year. Source: Silicon Valley Business Journal, December 23, 2020.

Tuesday, December 22, 2020:

  • President Trump, in a video posted to Twitter, urged congress to adjust the bill in several ways — including boosting per-person checks from the current level of $600 to a new level of $2,000 per person ($4,000 per couple). Democrats appear to support the proposed per-person change. But Trump’s demand to cut other funds from the pending legislation could face additional hurdles.  Source: USA Today, December 22, 2020.


Sunday, December 20, 2020:

Lawmakers late in the day released a long-awaited $900 billion coronavirus relief bill that is expected to be passed by Congress on Monday, December 21 and potentially signed into law by President Trump.  The bill, according to this article from The Hill, includes…

  • Paycheck Protection Program: Will be refueled with $284 billion in funds. Businesses that already received a PPP loan will be eligible to get a second one under the new terms. Some of the PPP funds will be set aside for the smallest businesses and community-based lenders.
  • Stimulus checks: A second round of direct payments to Americans — up to $600 per adult and per child. Also the bill will allow U.S. citizens who are in households that also include non-citizens to receive the payments.
  • Unemployment benefits:  Two expiring CARES Act programs — the Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation — were extended for 11 weeks. Also, Congress will add $300 to all weekly unemployment benefits. Workers who rely on multiple jobs and have lost income will also be eligible for a weekly $100 boost as well.
  • Plus housing assistance, educating, testing and other benefits.
  • Source: The Hill, December 20, 2020.

Saturday, December 19, 2020:

  • Senate Minority Leader Charles Schumer (D-N.Y.) and Sen. Pat Toomey (R-Pa.) reached an agreement late this evening on language to curtail the Federal Reserve’s special lending authorities, setting the stage for passage of a coronavirus relief deal and omnibus spending package and new PPP funding for small businesses as early as Sunday, December 20. Source: The Hill, December 19, 2020.

Thursday, December 17, 2020:

  • Democrats and Republicans are negotiating a potential $900 billion coronavirus relief package. The proposal features $250 billion in PPP funding as part of more than $320 billion for the Small Business Administration. The emerging $900 billion deal largely hews to the outline of a $748 billion proposal unveiled by the bipartisan House Problem Solvers Caucus and Senate moderates. But an official agreement has yet to be announced. Sources: Bloomberg Radio, The Hill, December 17, 2020.
  • Fully 90 percent of small businesses have spent all of their PPP funds, according to a Goldman Sachs survey. Source: CNBC, December 15, 2020.


Wednesday, November 4, 2020: Congress should pass a new economic-relief package this year, Senate Majority Leader Mitch McConnell said, as prospects for Democrats’ multitrillion-dollar stimulus bill faded along with their chances for full control of the government. McConnell says he supports aid to schools, hospitals and small businesses, but not a more sweeping Democratic proposal. Source: The Wall Street Journal, November 4, 2020.


Thursday, October 14, 2020: Wells Fargo fired more than 100 employees over alleged relief fund abuse. Source: Bloomberg, October 14, 2020.


Friday, October 9, 2020: Small business owners who took out a Paycheck Protection Program (PPP) loans of $50,000 or less will have a simpler process to follow to seek loan forgiveness, the SBA and Treasury Department said. Source: Silicon Valley Business Journal, October 8, 2020.


Tuesday, October 5, 2020:

  • PPP Loans and Small Business Mergers, Acquisitions: The SBA is now allowing lenders — under certain conditions — to approve the sale or merger of companies that took Paycheck Protection Program loans. The new guidance, issued Oct. 2, means that not all mergers or acquisitions have to receive SBA approval before going forward, although borrowers and buyers still need to adhere to specific rules. The lack of guidance — and the requirement that SBA approve all deals in advance — had caused headaches for some small-business owners. Source: Silicon Valley Business Journal, October 5, 2020.


Friday, September 11, 2020: The chances of a second round of Paycheck Protection Program loans — or any small-business stimulus legislation from Congress — is beginning to fade as the U.S. presidential election approaches. Source: Silicon Valley Business Journal, September 11, 2020.


Tuesday, September 8, 2020: JPMorgan Chase is investigating the role its employees may have played in potential abuse of Paycheck Protection Program loans and other pandemic relief programs. Source: CNN, August 8, 2020.


Tuesday, September 8, 2020: Senate Republicans, after weeks of daily phone calls, are trying to finalize a smaller, second coronavirus bill that is expected to include a weekly federal unemployment payment, another round of PPP funding and more money for testing and schools, as well as liability protections against coronavirus-related lawsuits. Update: The legislation was voted down  and failed to move forward. Source: The Hill, September 8, 2020.


Tuesday, September 1, 2020: Thousands of PPP loans were awarded improperly to firms that already had received a PPP loan or were barred from doing business with the federal government, a House oversight committee concluded in a report. Source: USA Today, Sept 1, 2020.


Tuesday, August 18, 2020:

  • PPP and Health Care Benefits: The Small Business Administration has released updated guidance on the Paycheck Protection Program related to payment of fees to third parties as well as health care benefits. Source: ThinkAdvisor, August 17, 2020.

Saturday, August 8, 2020:

  • PPP Loan Forgiveness FAQ: The Small Business Administration (SBA), in consultation with the Department of the Treasury, introduced this PPP Loan Forgiveness FAQ for small businesses.
  • Deadline: The deadline to apply for a Paycheck Protection Program (PPP) loan is August 8, 2020


Tuesday, July 28, 2020:

  • Potential PPP Changes: The HEALS Act, unveiled by Republicans in the U.S. Senate, includes several potential changes to the Paycheck Protection Program. Chief among them, according to Silicon Valley Business Journal:
  • Automatically forgiving PPP loans under $150,000.
  • Simplified forgiveness for loans between $150,000 and $2 million, stating that those borrowers are also not required to submit to the lender certain documentation but must complete the required certification and retain records for three years, and that lenders must review the application and submit it to the agency.
  • $190 billion to continue to make original PPP loans and to fund a second PPP loan to eligible businesses.
  • Those second PPP loans would be open to small businesses with fewer than 300 employees with at least a 50% reduction in revenue. The maximum size for a second loan would be $2 million, and small businesses would only be able to receive $10 million total across both loans.
  • A $25 billion set-aside for small businesses or organizations with 10 or fewer employees and a $10 billion set-aside for loans made by community lenders, which include community financial institutions and those with assets of less than $10 billion.
  • Source: Silicon Valley Business Journal, July 28, 2020.

Read earlier PPP updates by visiting the next page….

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1 Comment

Comment

    Peggy Braxton:

    What is status of remaining money in ppp fund from first round.

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