The PPP is going wide.
After opening to a limited subset of community-based lenders earlier this week, the second round of the federal Paycheck Protection Program will begin accepting applications from eligible lenders with $1 billion or less in assets on Friday, January 15, the Small Business Administration has announced. That would make the program’s loan portal open to about 5,000 more lenders, the SBA says, including “community banks, credit unions, and farm credit institutions.”
The PPP will then open to all eligible lenders on Tuesday, January 19, allowing participating financial institutions to make first or second draw loan requests regardless of size.
Authorized as part of the latest coronavirus relief package in December, round two of the PPP is being rolled out incrementally in response to criticism that the loans were not fairly disbursed the first time around. Many smaller businesses in underserved communities—and minority-owned businesses in particular—were left with nothing after the program ran out of money.
Lawmakers sought to avoid a similar situation this time around with changes to the program’s parameters. The SBA limited the first loans to community financial institutions, or CFIs, which include four categories of smaller lenders, most of which focus on low-income communities. Additionally, round two of the PPP is open to companies with fewer than 300 employees, compared with 500 for the first round. Publicly traded firms are excluded this time and loans are capped at $2 million.
You can check out all the latest updates, including guidance and lender forms, on the SBA’s dedicated PPP page.