The SBA and Treasury Department announced today that the Paycheck Protection Program (PPP 2.0) will re-open the week of January 11 for new borrowers and certain existing PPP borrowers.
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. The PPP will open to all participating lenders shortly thereafter.
This round of the PPP continues to prioritize millions of Americans employed by small businesses or as independent workers by authorizing up to $284 billion toward job retention and certain operating expenses by allowing certain existing PPP borrowers to apply for a Second Draw PPP Loan. Application deadline is March 31, 2021.
PPP 2.0 Key Updates
- PPP 2.0 borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;
- Loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
- The revised PPP Program 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.
Links to PPP 2.0 Guidance
- Interim Final Rule on Paycheck Protection Program as Amended by Economic Aid Act (Released 1/6/2021)
- Interim Final Rule on Second Draw Loans (Released 1/6/2021)
- SBA Guidance on Accessing Capital for Minority, Underserved, Veteran and Women-Owned Business Concerns (Released 1/6/2021)
Need More Support
If you have questions about PPP 2.0 or need support in any aspect of your restaurant business, please contact us.