As part of a larger $900 billion coronavirus relief bill approved in December by Congress, the Payroll Protection Program is now offering $284 billion in loans for the country’s small businesses.
The new version of the PPP, to be once again administered by both the Small Business Administration and the Treasury Department, comes in the wake of charges that some businesses receiving funding from the original loan pool were not legally qualified to do so.
This latest iteration of the PPP will have a smaller pool to draw upon than the original $525 billion approved by Congress last spring.
The new version will also be more focused on small businesses that can demonstrate a need for help, with only community-based lenders initially allowed to process loan applications, in an effort to make the program more accessible to minority depository institutions.
The latest rollout of the program comes in a time when many of the nation’s small businesses have been challenged not just by the original Covid-19 onset and subsequent economic shutdown, but also the resurgence of the pandemic this fall.
According to a survey conducted last month by the Nashville-based National Federation of Businesses, some 45% of roughly 600 respondents indicated that they will be applying for new PPP loans.
By the parameters of the new PPP outreach, loans can be used for job retention and certain other business expenses.
Businesses must have no more than 300 employees, and an ability to prove that they endured at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
In a statement, Jovita Carranza, administrator of the SBA, said the PPP “served as an economic lifeline to millions of small businesses and their employees when they needed it the most.”
The next PPP version, continued Carranza, “builds on the success of the program and adapts to the changing needs of small business owners by providing target relief and a simpler forgiveness process to ensure their path to recovery.”
To date, the PPP has provided loans to more than 5 million small businesses. Complaints about the original program have centered on charges that some businesses were significantly larger than the targeted recipients, while other companies in a program designed to meet payroll expenses had no employees at all.
The Treasury Department has since committed itself to investigating loans that were fraudulently received.
By Garry Boulard
Get stories like these right to your inbox.