The Small Business Administration announced that the Paycheck Protection Program (PPP) will soon reopen to serve new borrowers and some existing borrowers. First Draw PPP loans became available only from community development financial institutions on Monday Jan. 11, while Second Draw PPP loans will be available from CDFIs starting Jan. 13. Both PPP programs will become available through all participating lenders "shortly thereafter."
The SBA also issued new guidance for the PPP program changes that were included in last month's stimulus legislation. Under the new guidance, borrowers can set their loan coverage period for any length between eight and 24 weeks, and can use PPP funds for a broader range of expenses, including operations, property damages, supplier costs, and worker protection. Businesses that received a First Draw PPP loan can apply for a Second Draw if they have no more than 300 employees and can show a decline of at least 25 percent in gross revenues between comparable quarters in 2019 and 2020.
SBA also recently issued guidance allowing businesses that received PPP loans that have since been forgiven to deduct business expenses paid for with loan revenue.
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