Small businesses get aid in two-week window to apply for forgivable loans
Starting Wednesday, the Biden administration is opening a two-week window where businesses with fewer than 20 employees can apply for forgivable loans from the Paycheck Protection program.
The first wave of PPP loans last year began in April as part of the CARES Act and ran for about five months, handing out 5.2 million loans worth $525 billion.
Many businesses were still left struggling, leading to a renewal of the program this past December and another wave of PPP that began January 11 this year and will run through the end of March.
Atlantic Regional Communications Director Matt Coleman of the US Small Business Administration explains what this upcoming two week window intends to do.
“This will give lenders and community partners more time to work with the smallest of small businesses, for them to submit their application to the SBA, while also ensuring that larger PPP eligible businesses will still have plenty of time to apply for and receive economic aid from the program before it expires on the congressionally set deadline of March 31.”
Congress has provided PPP participating lenders with delegated authority.
"Meaning that they're acting as agents of the government in approving loans. And submitting them to the SBA for review," Coleman explained. "Once the SBA approves a submitted loan from a lender, the loan will be remitted to the lender to a bank or other financial institution that an entity, a small business or nonprofit goes to. And then by law, the lender has up to 10 days in which to remit the full loan, the first draw or second draw to the applicant."
The SBA is getting over $284 billion in funding for first and second-time PPP loan borrowers, with some of that money set aside specifically for businesses in low-income communities, minority communities, and cultural institutions like music venues and movie theaters.
Coleman said the SBA has tools to help business owners who have questions about receiving aid.
“So the SBA has two tools for those who may not have an established relationship with a lender with a PPP lender,” he said. “And one of those two tools which are available on sba.gov, include a PPP lender mapping tool, where you can enter your zip code and find lenders near you that are participating in the paycheck protection program.”
Those eligible for a new PPP loan include qualified small businesses that did not receive a PPP loan during the first round of funding, previous PPP loan recipients who need a second loan and meet certain criteria, and previous PPP loan recipients who returned all or part of their original loan and want to apply for additional funding.
For more information, you can visit SBA.gov.