The Small Business Administration (SBA) has announced it will begin accepting applications for the second round of Paycheck Protection Program (PPP) loans Monday, January 11. Only community-owned institutions will be able to submit applications on January 11 and 12. On Wednesday, January 13, that restriction is lifted and borrowers with all participating lenders will be able to apply.
The two-day head start is designed to give smaller banks more access to the funds than they had in 2020, when it seemed customers of big banks and behemoth businesses were more likely to receive PPP relief. Check with your lender to determine whether it’s considered a community bank (the state of Colorado regulates this).
On a Colorado Restaurant Association webinar held today covering the new round of funds, attorney Torben Welch from Denver law firm Messner Reeves recommended business owners apply through a bank that they already have a relationship with rather than seeking out a new community bank in hopes of getting just 48 hours lead time. If you previously received PPP funds, submitting a second application through your previous lender should be fairly painless, he noted.
A number of changes have been made to the loan program that will benefit restaurants. They include:
- Expanded eligible expenses, including supplier costs, worker protection expenses, and property damage costs.
- Up to 24 weeks to utilize the funds.
- Specific allocation of loan monies to businesses that are located in low-income neighborhoods, are first-time applicants, and have less than 10 employees.
- Maximum loan amounts for restaurants increased from 2.5 to 3.5 times your average monthly payroll.
- Loans are capped at $2 million to ensure large corporations aren’t gobbling up all the funds.
Business owners should apply through their banks. Applications will be accepted through March 31, 2021, though Welch strongly advises applying as soon as possible, before funds are exhausted.
Take a look at the loan application and a list of participating banks on the SBA’s website. And here’s a recording of the above webinar. It includes much more info, as well as an extensive Q&A session.
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