Under the new legislation, the SBA is getting over $284 billion in funding for first and second-time PPP loan borrowers. Now, to offset these losses and help a greater number of small businesses recover, Congress is amending a handful of terms and requirements around PPP loans. Many small businesses were ignored by bank lenders, while others didn’t receive a loan before the PPP closed in August 2020. Though the program helped countless small businesses stay afloat amid COVID-19 shutdowns and restrictions, the Paycheck Protection Program wasn’t a cure-all for the small business economy. The loans required no collateral or personal guarantees. Business owners could get their loans forgiven if they used at least 60% of the money to cover payroll costs.Qualified businesses could receive 2.5 times their average monthly payroll costs up to $10 million.Here are a few key facts about the first round of PPP loans: Unlike other SBA loans, PPP loans are designed to be partially or fully forgivable, meaning you won’t have to pay them back as long as you follow certain rules. The program - which ran from April to August 2020 - initially allotted $349 billion in funding to small businesses, then injected another $320 billion to help satisfy the high demand of applicants. Issued as part of the CARES Act in March 2020, the PPP gave small businesses and independent contractors loans to cover payroll costs for a period of up to eight weeks. The following guide outlines everything you need to know about the updates before you apply for PPP loan funding. To get prepared for a PPP loan, it’s critical to read up on the latest eligibility requirements and terms so you know where you stand and how to prepare. Small businesses may be able to apply for a loan as early as January 15, 2021. Once the SBA reopens the program, it will run through March 31, 2021, or until funds run out (whichever comes first). The new COVID-19 relief bill has two main purposes: 1) to offer funding to small businesses that didn’t receive a PPP loan the first round and 2) to give certain qualified businesses the chance to get a second PPP loan. Congress recently passed the “Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act,” in part to reauthorize the Paycheck Protection Program (PPP) that ended in August 2020. If your business is struggling after nine months of COVID-19-related shutdowns and challenges, help is on the way. However, information around the PPP can change quickly, so check back here or on the SBA site for the latest details. Disclaimer: This article is updated as of January 22, 2021.
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