The Small Business Administration (SBA) has released guidance on applying for the second round of loans being offered under the Paycheck Protection Program (PPP), which has been a lifeline for many small businesses during the pandemic recession.
This time around, the SBA is prioritizing underserved groups such as minority-owned businesses and will only accept applications from community financial institutions during the first two days after its loan portal opens, said Lendio CEO Brock Blake in an article for Forbes.
The last day to apply for a PPP loan is March 31, 2021, according to the SBA guidelines.
Blake said the SBA has not yet released its application form, but guidelines for applying are still essentially the same, with greater clarification of sections that past applicants had found vague.
Repeat PPP applicants must use the entire amount of their first loan before funds are disbursed for a second. The SBA has narrowed eligibility for second loans to employers of 300 or fewer workers, down from its previous ceiling of 500 workers. Applicants must also show their gross receipts have fallen at least 25 percent from the same period the previous year. Applicants would be able to use the same 2019 payroll figures to apply for a second loan in the same amount as the first, Blake said.
Blake added that businesses that fall under NAICS code 72, such as restaurants and bars, would be able to receive 3.5 times their average payroll and may be eligible for loans at each of their locations.
The SBA will require self-employed business owners to furnish the net income listed on their Schedule C plus any employee wages. Partnerships will need to apply as a partnership and not as individuals, said Blake.
Blake’s firm Lendio has been actively assisting small businesses seeking to apply for PPP loans.
To speed up the PPP loan approval process for small firms, Lendio said it has again rolled out its digital application for small business owners to access funds dedicated for further loans via the program, according to a Dec. 29 announcement.
“The Lendio team has been working to prepare and improve upon the technology that enabled us to facilitate over $8 billion in loan approvals in the first rounds of the PPP,” Blake said in the announcement.
Small business owners can make an application straight through the small business loan marketplace company and be directed to an approved capital provider via its collection of credit unions, banks, FinTech lenders and non-bank lenders.