The PPP Is Back: What To Know About Loan Options For Small Businesses


Aid for small businesses through the Paycheck Protection Program (PPP) will resume the week of Jan. 11 for new borrowers and some existing PPP borrowers, according to a news release from the U.S. Small Business Administration and U.S. Department of the Treasury.

The re-opening of the PPP and updates in place were advocated for by ACA International in the Further Extension of Continuing Appropriations Act of 2021 finalized in December—primarily the increase in funding for small businesses.

ACA also advocated for a simplified loan forgiveness process and tax deductions, which are in the latest relief package.

Congress combined COVID-19 relief provisions with the fiscal year 2021 spending bill. The $900 billion bipartisan agreement allocates $325 billion for small-business relief, including $284 billion in funding for PPP loans available to first- and second-time borrowers.

The PPP will be extended through March 31, 2021, with the additional funding, according to a fact sheet on the bill from the House Small Business Committee.

“This round of the PPP continues to prioritize millions of Americans employed by small businesses by authorizing up to $284 billion toward job retention and certain other expenses through March 31, 2021, and by allowing certain existing PPP borrowers to apply for a second draw PPP loan,” according to the news release.

“The Paycheck Protection Program has successfully provided 5.2 million loans worth $525 billion to America’s small businesses, supporting more than 51 million jobs,” Treasury Secretary Steven T. Mnuchin said in the news release. “This updated guidance enhances the PPP’s targeted relief to small businesses most impacted by COVID-19. We are committed to implementing this round of PPP quickly to continue supporting American small businesses and their workers.”

PPP updates, according to the news release, include:

  • PPP borrowers can set their PPP loan’s covered period to be any length between eight and 24 weeks to best meet their business needs;
  • PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
  • The program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, direct marketing organizations, among other types of organizations;
  • The PPP provides greater flexibility for seasonal employees;
  • Certain existing PPP borrowers can request to modify their first draw PPP loan amount; and
  • Certain existing PPP borrowers are now eligible to apply for a second draw PPP loan.

A borrower is generally eligible for a second draw PPP loan if the borrower:

  • Previously received a first draw PPP loan and will or has used the full amount only for authorized uses;
  • Has no more than 300 employees; and
  • Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

The new guidance released includes:

For more information on the SBA’s assistance to small businesses, visit sba.gov/ppp or treasury.gov/cares .