If you are a small business still struggling, call your lender immediately! You may be eligible for a third round of lending from the U.S. Small Business Administration.
SBA and Treasury Dept. reopened the Paycheck Protection (PPP) loan program on Monday through the ‘Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act’, issuing $284 billion to restart the program for the third time. The program allows lenders, on the federal government’s behalf, to give out loans (that can be forgiven) to cover payroll and other expenses. SBA has previously distributed 1.1 million Paycheck Protection Program (PPP) loans for over $100 billion.
The SBA has so far received 1,346,125 forgiveness applications for approximately $170.5 billion. SBA has made payment on nearly 85% of the applications, forgiving over $100 billion. For the smallest borrowers with loans up to $50,000, 88% have been approved for forgiveness.
SBA gave first access to the loan portal (which can be used only by lenders) to community financial institutions, which include community development financial institutions, minority depository institutions, certified development companies and microloan intermediaries, who represented about 10% of all loan lenders in 2020. Initially, the programs will accept first-draw applicants, meaning they didn’t receive a Paycheck Protection Program loan before the portal closed last August. In the coming days, more lenders will be allowed to participate. Soon the loan application portal will open to CFIs for Second Draw loans, additional participating lenders will be able to submit First and Second Draw PPP loan applications. Although the SBA and Treasury have not announced the exact date that the portal will open to non-CFIs, it is expected to happen sometime during the week of January 18.
Small business owners without a regular lender can find one on SBA’s online Lender Match portal at www.sba.gov.
The PPP was a life saver for some small businesses last year, and this second wave of financial support will especially be a boost to businesses in rural and underserved communities. With a targeted opening, SBA is prioritizing and extending relief to impacted business owners who need it the most. If you own or operate a small business, I strongly encourage you to investigate this opportunity for assistance.
Small business owners will want to get their paperwork together and up to date — including key documents like their latest tax records and average monthly payroll costs — so that their loan application to the lender won’t be rejected or delayed.
As always, our SBA team is eager to answer questions, offer help through the process, and connect business owners and entrepreneurs with tools for long-term health and success.
Tom Salisbury is the Region 7 Regional Administrator for SBA’s states of Missouri, Kansas, Nebraska and Iowa.