On February 10th, 2021, the U.S. Small Business Administration (SBA) announced new steps to improve the Paycheck Protection Program (PPP). According to the SBA, these updates allow small businesses to access PPP funds to stay afloat through the pandemic. The updates mostly include increasing access to underserved small businesses; assuring program integrity; and promoting rapid and efficient distribution of funds.
The SBA reopened the Paycheck Protection Program on January 8th, 2021.
PPP Achievements Since Reopening
During the week of February 7th, 2021, the SBA hit a major milestone of approving $104 billion of PPP funds. This includes funding to more than 1.3 million small businesses. Highlights from this round also include:
- Reaching more smaller businesses. 82% of all loans going to businesses requested less than $100,000.
- Reaching rural communities in a meaningful way. 28% of businesses who have received funding this round are in rural communities.
- Increasing partnerships with Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs). These CDFIs and MDIs include trusted agents in extending economic relief to minority communities and underserved populations.
SBA Commitments for the Current Round of PPP Funding
As part of the updates listed above, the SBA is also taking additional steps to improve the speed in resolving data mismatches. Those mismatches could cause eligibility concerns for small businesses. As a result of these improvements, small businesses now have as much time as possible to access funding. Three important changes include:
- Enabling lenders to directly certify eligibility of borrowers for First Draw and Second Draw PPP applications with validation errors. Accordingly, this ensures businesses who need funds and are eligible receive them as quickly as possible;
- Allowing lenders to upload supporting documentation of borrowers with validation errors during the forgiveness process; and
- Creating additional communication channels with lenders. Namely, this will assure that the SBA is improving equity, speed, and integrity of the PPP.
Employer Takeaways
Employers interested in First or Second Draw PPP Loans can apply through any existing SBA 7(a) lender. Specifically, they can submit applications to any participating federally-insured depository institution, federally-insured credit union, and Farm Credit System institution. Other regulated lenders will be available to make these loans once approved and enrolled in the program. Employers should consult with their local lender to find out if it is participating in the program.