After a seven-month wait, the federal Small Business Administration's Paycheck Protection Program, which offers small businesses forgivable loans to help them retain and pay their workers if they meet certain conditions, reopens this week.
Are you applying? Let us know and, if so, how we can help.
The first round of the program closed in August after distributing $523 billion to more than 5 million businesses. Last month’s stimulus package included $284 billion in new funding to restart the relief effort.
An Equitable Start
Beginning today, the SBA is accepting applications from community lenders seeking loans for first-time borrowers. Lenders who specialize in working with Black- and minority-owned small businesses will have a head start in tapping program funds, a move meant to address complaints that the aid was not distributed equitably the last time around and favored businesses with existing banking relationships.
Community lenders are specially designated institutions that focus on underserved borrowers, including women-led businesses and those run by Black, Latino and Asian owners and other minorities.
The SBA has not said when it will begin accepting applications via non-community lenders, only that it will "reopen to all participating lenders shortly thereafter." We'll keep you posted on this.
Double Up
Borrowers were previously limited to just one loan, but the new funding will be available to both first-time and returning borrowers. First draw loans are eligible to any business or nonprofit with fewer than 500 employees and can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.
On Jan. 13, lenders will be able to submit applications from people seeking second-round loans. Businesses will be eligible for a second loan if they suffered a sales drop of at 25 percent or more in at least one quarter of 2020, compared with the previous year. Second loans will be restricted to businesses with no more than 300 employees; initial loans are available to larger companies, generally those with up to 500 workers.
Mill Valley business owners leaned heavily on the program's first incarnation in 2020, garnering more than $32 million in forgivable loans for the period prior to June 30, enough to retain 2,795 jobs, or nearly 14 percent of jobs saved in Marin for that period.
Many sole proprietors, a sector heavily represented in Mill Valley, got little or no PPP aid. Some were helped by other government relief programs like expanded unemployment benefits under the $2 trillion CARES Act, which are not typically available to those who are self employed. And millions of business owners got loans from a second S.B.A. program, the Economic Injury Disaster Loan system, which offers low-interest loans. But those, unlike PPP loans, must be repaid.
Questions? Comments? Email us.
Are you applying? Let us know and, if so, how we can help.
The first round of the program closed in August after distributing $523 billion to more than 5 million businesses. Last month’s stimulus package included $284 billion in new funding to restart the relief effort.
An Equitable Start
Beginning today, the SBA is accepting applications from community lenders seeking loans for first-time borrowers. Lenders who specialize in working with Black- and minority-owned small businesses will have a head start in tapping program funds, a move meant to address complaints that the aid was not distributed equitably the last time around and favored businesses with existing banking relationships.
Community lenders are specially designated institutions that focus on underserved borrowers, including women-led businesses and those run by Black, Latino and Asian owners and other minorities.
The SBA has not said when it will begin accepting applications via non-community lenders, only that it will "reopen to all participating lenders shortly thereafter." We'll keep you posted on this.
Double Up
Borrowers were previously limited to just one loan, but the new funding will be available to both first-time and returning borrowers. First draw loans are eligible to any business or nonprofit with fewer than 500 employees and can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.
On Jan. 13, lenders will be able to submit applications from people seeking second-round loans. Businesses will be eligible for a second loan if they suffered a sales drop of at 25 percent or more in at least one quarter of 2020, compared with the previous year. Second loans will be restricted to businesses with no more than 300 employees; initial loans are available to larger companies, generally those with up to 500 workers.
Mill Valley business owners leaned heavily on the program's first incarnation in 2020, garnering more than $32 million in forgivable loans for the period prior to June 30, enough to retain 2,795 jobs, or nearly 14 percent of jobs saved in Marin for that period.
Many sole proprietors, a sector heavily represented in Mill Valley, got little or no PPP aid. Some were helped by other government relief programs like expanded unemployment benefits under the $2 trillion CARES Act, which are not typically available to those who are self employed. And millions of business owners got loans from a second S.B.A. program, the Economic Injury Disaster Loan system, which offers low-interest loans. But those, unlike PPP loans, must be repaid.
Questions? Comments? Email us.