The second round of Federal funding for small business relief via the Paycheck Protection Program (PPP) and existing Small Business Administration programs has begun.
The PPP, which was created by the CARES Act that was passed last month, has been replenished with an additional $310 billion of funding, $60 billion of which will be administered through small and community banks that were left out of the first round. According to the SBA, the PPP was created “to provide a direct incentive for small businesses to keep their workers on the payroll.” If recipients keep all employees on their payroll for at least eight weeks and the money is used for payroll, rent, mortgage interest, or utilities, the SBA will forgive the loan.
Existing Small Business Administration grant and loan programs, such as the Economic Injury Disaster Loan (EIDL), will receive an additional $60 billion and will be focused on minority and underserved businesses.
This second round of funding will likely provide loans to small business owners whose applications were received in the first round of the PPP, but were not processed before funds were depleted. Business owners that have not yet applied are encouraged to do so promptly, as some banking groups are expecting the number of new applications will be limited before the program funds are again exhausted.
During the first round of funding, more than 1.7 million loans were approved across the country. According to the San Francisco Business Journal, in the first round of funding, California businesses were approved for 112,967 loans, worth a combined $33.4 billion, the most of any state.
PPP loan applications resumed Monday, April 27 at 10:30 AM EDT from approved lenders on behalf of any eligible borrower.