The US Small Business Administration reopened access to the Paycheck Protection Program on Monday, January 11. These loans, initially authorized by the CARES Act in March 2020, are designed to help small businesses keep their employees on the payroll. They are now also open to sole proprietors, independent contractors, and the self-employed. First Draw (first time) and Second Draw (second time) loans are now available. According to the SBA, “A borrower is generally eligible for a Second Draw PPP Loan if the borrower previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses; has no more than 300 employees; and can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.”
These loans can be forgiven if the employer maintains employee and compensation levels and the loan amount is spent on payroll costs and other eligible expenses, with at least 60% of the proceeds covering payroll costs. Once the loan proceeds have been spent, a borrower can apply for forgiveness at any time up to the date the loan matures.
This new round of PPP lending provides up to $284 billion through March 31, 2021. To date, participating SC lenders include Optus Bank, Carolina Foothills Federal Credit Union, Security Federal, and CommunityWorks Carolina. For more information, please visit the SBA Paycheck Protection Program page.