The Paycheck Protection Program, the key program responsible for helping keep small businesses alive throughout the Coronavirus pandemic has reopened for new applicants. The Trump administration announced Friday that the PPP loan program would reopen. The program which allows small business owners to apply for forgivable loans to maintain their payroll will begin accepting first-time applicants today and second-time borrowers can apply Wednesday.
The federal government will also give priority to minority-owned businesses in the program’s first two days by only accepting loan applications from certain lenders that focus on underserved communities.
Congress established the $670 billion rescue fund earlier this year with the passage of the CARES Act at the end of March. Lawmakers authorized another $284 billion last month to provide a second round of forgivable loans to small businesses as part of its more comprehensive $900 billion COVID relief plan. At least $40 billion has been set aside for businesses with 10 or fewer employees and for loans under $250,000 in low-income areas.
Only businesses with 300 employees or fewer are eligible to receive a second loan, which will be capped at $2 million. Borrowers also need to prove that they saw a 25% reduction in gross receipts during a quarter in 2020 compared with the same quarter in 2019.
Over the course of roughly four months, the PPP distributed about $525 billion in forgivable loans to 5.2 million companies, saving an estimated 50 million jobs, according to the SBA. The program closed to new applicants at the end of July with roughly $38 billion remaining in the fund.
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