Paycheck Protection Program Loan Apps Open Tomorrow: Here’s How to Claim Your Funds
The Small Business Administration announced that the Paycheck Protection Program loan portal opens Friday, Jan. 15 at 9 a.m. ET for PPP-eligible lenders with $1 billion or less in assets. Business owners can complete first or second draw applications beginning Friday morning. On Tuesday, Jan. 19, the portal will open fully to all lenders.
Earlier this week, the SBA granted dedicated PPP access to community financial institutions in order to better reach underserved and minority small businesses, the SBA stated in a press release.
“The PPP is already providing America’s small businesses hardest hit by the pandemic with vital economic relief,” said Secretary of the Treasury Steven T. Mnuchin in the SBA press release. “As the Program re-opens for all First and Second Draw borrowers next week, the PPP will allow small businesses to keep workers on payroll and connected to their health insurance.”
When the $900 billion stimulus package passed last year, it included another round of funding for the Paycheck Protection Program, the loan program permitting business owners who have suffered losses due to the coronavirus pandemic to apply for a fully forgivable loan to cover payroll and operating expenses.
Under the provisions of the new package, businesses can apply for the loan even if they received funds in the first round, if they:
- Have fewer than 300 employees, and
- Have experienced a reduction of at least 25% in gross receipts for any quarter in 2020 vs. the same quarter in 2019, and
- Are not involved in political or lobbying activities
Loan amounts are capped at $2 million for second time borrowers and $10 million for those applying for the first time. The new law also streamlines the forgiveness application for loans of $150,000 or less.
If you’re a small business owner, you can apply for first or second draw funding through your bank or credit union, which can walk you through the application process and answer any questions about loan forgiveness. It’s wise to speak to your tax accountant about any potential tax ramifications of the loan, although the law does clarify that business owners can take tax deductions for expenses paid with PPP loan proceeds, just like they would for any other payroll or operational expenses.
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