Roll out of new PPP, small business loans, 1/6/21

The Small Business Administration has released guidance and regulations for the newest Paycheck Protection Program loans.  The total amount is $284.45 billion. Some local counties are already sending out information so that small businesses can gather information and materials needed. (see Boulder and Larimer County information below). The deadline will be March 31, 2021.

Note, you can still apply for your first PPP loan. It can be used to help fund payroll costs, including
benefits. Funds can also be used to pay for mortgage interest, rent and more. (See the documents regarding reapplying, loan forgiveness, and more.)

Although the loans are open to those with 500 employees or less, the SBA has stepped up to be especially mindful of those businesses with ten or less employees. It set aside $15 billion for them. The old program allows loans up to $10 million and now do not need to show the same 25 percent year-over-year revenue drop. With the new, second wave of loans, the government has limited the loan to a max of $2 million, which should deter those very large businesses from eating up the SBA’s budget this time.

Another safeguard to make sure the loans are going to SMALL businesses is to promote widespread community access to capital. Initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13. The PPP program will open to all participating lenders shortly thereafter.

Eligible lenders of the first two draws of PPP loans are one of four types:

• Community Financial Development Institution (CDFI)
• Minority Depository Institution (MDI)
• Community Development Corporation (CDC)
• Microlender Intermediary

Review this list of participating Colorado Community Development Financial Institutions.

• The “first” loans can now use either the 2019 or 2020 financials to prove that their finances have drastically changed.
• Small businesses that are temporarily closed or suspended can still apply for this second round of loans. And, are still eligible for a second PPP loan.
• Another proof that dealing with the same bank and knowing your banker is a good thing: if the small businesses use the same lender/bank, it will most likely not have to provide any additional documents. However, lenders may still require additional information.
• Independent contractors can still apply for a PPP loan on their own.

SBA web pages to help you:

• 1st Draw PPP Loans: For qualified recipients that have not previously received a PPP loan https://www.sba.gov/document/sba-form-2483-ppp-first-draw-borrower-application-form
• 2nd Draw PPP Loans: For qualified recipients that have previously received a PPP loan https://www.sba.gov/document/sba-form-2483-sd-ppp-second-draw-borrower-application-form
• Eligible PPP expenses for forgiveness have been expanded
• Guidance on Accessing Capital for Minority, Underserved, Veteran
  and Women-Owned Businesses
• Changes to Employee Retention Tax Credit
• EIDL and the EIDL Advance program are re-opening for target areas. Information is forthcoming from SBA.
• Shuttered Venue Grants: Businesses who qualify for this grant cannot receive this grant and new PPP funds. They will need to make a decision as to which funding source makes the most sense for their business.