Congress has approved $284 billion in new Paycheck Protection Program funding, also known as the PPP program. This bill was signed into law by President Trump on December 27th. For small businesses who had their income decline this year, this is good news: You may be able to apply for a second PPP forgivable loan.
📌 New PPP applications are currently not being accepted yet, but we expect they will be soon. We will update this post as things change.
A Recap of the Paycheck Protection Program
The PPP Program was designed originally in the CARES Act in March 2020 to help small businesses retain their employees. In short, businesses could apply through lenders to receive a loan up to 2.5x their payroll. These loans are forgivable so in most cases they are essentially grants.
There were dozens of SBA-approved banks that participated in the program. Basically lenders were allocated money from the SBA, the lenders would work with businesses, and then the SBA would issue 'final approval' of the loans.
A Summary of the New Paycheck Protection Program
The PPP Round 2 has expanded which businesses and industries are eligible. Plus, the new eligibility requirements are as follows: Businesses that can demonstrate a 25% or greater reduction in gross receipts during a quarter in 2020 relative to the same quarter in 2019 would be eligible for a second PPP loan. Businesses must also have less than 300 employees and have used their initial PPP loan in full.
What Happened with the First PPP Round?
In the first round, over 5.2 million PPP loans were distributed for a total of $525 billion. The average loan size was around $100,000 and 5,460 lenders participated.
The SBA published the names of businesses who received more than $150,000 in PPP funding in the first round. You can use our PPP recipient lookup tool if you're curious about this or if you want to see businesses near you that received funding.
What Are Next Steps on the PPP Funding Round 2?
The new round of PPP funding is not yet available. Once new guidelines have been finalized by the SBA, this page will be updated with the latest information.
We will also have partner lenders that you can apply to for your PPP loan if you don't have an established lender to work with. In the meantime, you can stay up-to-date on the Skip App.
