This week, the SBA and Treasury issued two interim final rules and a three-page document providing further guidance for the second round of PPP. The new PPP has $284.5 billion available, including $35 billion for first-time loans.
- The first IFR consolidates the rules for PPP loans forgiveable for first-time borrowers and describes changes made by the made by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, P.L. 116-260.
- The second IFR “Business Loan Program Temporary Changes; Paycheck Protection Program Second Draw Loans” provides guidelines for new PPP loans to businesses that previously received a PPP loan.
- The third document “Guidance on Accessing Capital for Minority, Underserved, Veteran and Women-Owned Business Concerns” commits the SBA to make at least the first two days of the PPP application window open exclusively to applications from community financial institutions that serve minority- and women-owned businesses.
More details and guidance with regard to the SBA guidance will be forthcoming in this blog on Monday, 1/11.
SBA Announces Dates for Restarting PPP
The SBA just announced that it will restart PPP on Monday, 1/11. Lenders targeting underserved communities will have exclusive access to offer loans to new borrowers on 1/11 and 1/12.
The SBA indicated that lenders will offer second PPP loans to qualifying businesses starting on 1/13. PPP will open more widely a few days later, although the exact date is not yet known.
The lenders that will have exclusive access to offer PPP loans beginning Monday 1/11 include community development financial institutions and minority depository institutions. This pool of financial institutions represents approximately 10 percent of the lenders participating in the program.
It is reported that PPP approval is expected to be slower than last time, when it was nearly instantaneous. The SBA will run additional automated data verification checks, so that borrowers may have to wait overnight to get approval. There will be manual review if those checks turn up issues.
In a big change for banks, SBA expects to use a new software platform for lenders to submit loan applications. The SBA’s E-Tran system, which was prone to glitches last year amid overwhelming demand, will not necessarily be what banks see on the front end as they submit applications.
SBA and Treasury are giving PPP lenders and borrowers time to digest the rules before launch next week BUT they have not released application forms and lenders still don’t know how the new SBA technology will work.
New PPP Loan Forgiveness Application for Loans of $50,000 or Less
Hot off the presses, the SBA has just issued a new loan forgiveness application for loans of $50,000 or less.
By Mark Friedlich, Esq., CPA.