MONTGOMERY-Governor Ivey has issued updates on the Paycheck Protection Program:
Congress revived the Paycheck Protection Program (PPP) on December 27 with a $284.5 billion funding allocation, and the Small Business Administration (SBA) officially reopened the program, yesterday, Monday, January 11.
Many protocols are the same. There are also important changes, which I will share below.
Participating Lenders: For the time being, PPP loans can generally only be made at Community Development Financial Institutions (CDFIs) or Minority Depository Institutions (MDIs). The program will open to other lenders in the near future, but the exact day has not been announced by the SBA.
Eligible Borrowers: The maximum size of a PPP loan remains the same. However, it specifically can allow 2.5 times a borrower’s average monthly payroll cost, up to $10 million. Borrowers are now labeled as either first draw or second draw borrowers. All borrowers have until March 31, 2021 to secure their first or second PPP loan.
*A first draw borrower has not previously received a PPP loan. As before, the borrower must have been operational before February 15, 2020 and have no more than 500 employees. But in this round of PPP funding, some businesses previously ineligible for a PPP loan now qualify, such as 501(c)(6) organizations, housing cooperatives and direct marketing organizations. A first draw borrower can apply for a PPP loan starting Monday, January 11.
*A second draw borrower has received a PPP loan and has or will use the full amount of funds for authorized uses. Importantly, a second draw borrower can have no more than 300 employees and must demonstrate a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. A second draw borrower can apply for a PPP loan starting Wednesday, January 13.
More information can be found here: https://www.sba.gov/article/2021/jan/08/sba-treasury-announce-ppp-re-opening-issue-new-guidance?utm_campaign=NEWSBYTES-20210108-Special&utm_medium=email&utm_source=Eloqua
With this update, Governor Ivey also shared the following comment:
From Governor Kay Ivey: “This update from the Small Business Administration is welcome news, and I encourage small business owners across our state to take advantage of these available funds. Any support that we can provide our small businesses in this challenging season is critical to our overall recovery.”
Media Release/Office of Alabama Governor Kay Ivey
