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Paycheck Protection Program loan applications open till March 31

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The U.S. Small Business Administration reopened the Paycheck Protection Program for first- and second-draw loans this month.
The PPP loan is designed to provide a direct incentive for small businesses to keep their workers on the payroll. The loans will be forgiven if employee-retention criteria are met and funds are used for eligible expenses. Borrowers are eligible for forgiveness if PPP funds are used for eligible payroll costs, payments on business mortgage interest payments, rent or utilities during either the eight- or 24-week period after disbursement.
The following entities affected by COVID-19 may be eligible to obtain a first draw PPP loan: 
    • Sole proprietors, independent contractors, and self-employed people.
    • Any small-business concern that meets SBA’s size standards (either the industry size standard or the alternative size standard).
    • Any business, 501(c)(3) nonprofit organization, 501(c)(19) veterans organization, or tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
—500 employees, or
— That meets the SBA industry size standard if more than 500.
    • Any business with a NAICS code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs fewer than 500 per location.
Borrowers are usually eligible for a second-draw PPP loan if they fit the following criteria: 
    • Previously received a first-draw PPP loan and will, or has used, the full amount only for authorized uses.
    • Has no more than 300 employees.
    • Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020
Both first- and second-draw PPP loans are accepting applications from now until March 31. SBA is accepting PPP applications from participating lenders.
One can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. 
Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. One should consult with a local lender as to whether it is participating in the program.
To download the first draw PPP application to see the information that will be requested when you apply with a lender, visit www.sba.gov/sites/default/files/2021-01/PPP%20Borrower%20Application%20Form%20%28revised%201.8.2021%29.pdf.

 

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