US Rep. Grace Meng (D-Queens) on Monday announced the reopening of the Small Business Administration’s Paycheck Protection Program (PPP) which provides forgivable loans to small businesses that have suffered economic losses due to the COVID-19 pandemic.
The initiative, which was closed on August 8, 2020 despite more than $130 billion remaining in the program, was reopened under the $900 billion coronavirus relief package—which became law on December 27, 2020. The new law includes a total of $284 billion for small businesses.
To qualify for a second round of funding, borrowers must: Employ 300 or fewer employees; Have used or will use the full amount of their first PPP loan; and Demonstrate at least a 25 percent reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter.
First-time borrowers must employ 500 workers or less. The program opened to first-time borrowers on January 11. For second round applicants, it began on Wednesday, January 13. Community lenders are first to participate in the program with other lenders to follow soon.
To qualify for loan forgiveness, 60 percent of the loan must be used for payroll expenses and the remaining 40 percent can be used for nonpayroll expenses such as rent, mortgage, or utility payments. Eligible expenses have been expanded to include personal protective equipment and supplier costs that are essential to business operations.
This new round of PPP loans also makes other entities such as non-profit organizations and housing cooperatives newly eligible for funding.
The deadline to apply for the new round of PPP is March 31, 2021, or until funds run out. For more information on the program, please visit the SBA’s website.