The U.S. Small Business Administration and the Treasury Department relaunched the Paycheck Protection Program on Monday to new borrowers, prioritizing loans from community lenders.
The program, funded with $284.5 billion thanks to the latest stimulus package passed by Congress late last month, opened Monday to so-called “first draw” PPP loans for those small businesses who didn’t take advantage of the program last year. “Second draw” PPP loans will be available starting Wednesday. Initially only community financial institutions will be able to make the first-draw and second-draw loans, but the SBA and the Treasury said Friday that the program would be open to other lenders shortly thereafter.
Tom Neill was managing shareholder of Finney, Neill & Co. His 40-plus years in public accounting primarily focused on assurance and attest services as well as financial statement preparation and business consulting experience in a large variety of industries. His experience also includes working with business and individual tax matters. He also teaches continuing education courses in regulatory ethics.
He is a member of the AICPA's National Pipeline Advisory Group; current chair of the AICPA Uniform Accountancy Act Committee; and a member of the NASBA Peer Review Compliance Committee. He spent nine years on the Washington State Board of Accountancy (including two years as board chair); and is a past-member of the NASBA Ethics and Professional Issues Committee, a past member of the AICPA Professional Ethics Executive Committee, and past president of the Washington Society of CPAs. He graduated from the University of Washington in 1980 and received his CPA license in 1983.
Denise M. Tyson is the CEO and founder of Schaefer City Technologies. Tyson is a financial and operational management executive with extensive experience in the insurance industry, including insurtech startups, mergers/acquisitions, reorganizations, and financially challenging situations. She has held C-level positions with multiple insurance companies since 2000. She was the founder of Simplicity, Inc. an insurtech startup focused on pay-as-you-go personal auto insurance; the president of Go Insurance Company, part of a fully integrated insurtech organization; and the first EVP and CFO of Doma (fka States Title, Inc.) an insurtech company transforming the title industry.
Tyson started her finance and accounting career in public accounting in New York City working for KPMG and went on to work with PwC in Los Angeles as a Senior Manager leading their Financial Services team before launching into the insurance and insurtech industries. Tyson is a Certified Public Accountant. She holds a Bachelor of Science in Accountancy from Villanova University and an MBA from the UCLA Anderson School of Management.
Nurasyl Serik is the Co-Founder & CEO at Remofirst, a startup transforming global payroll and compliance for remote teams, with a mission to simplify and streamline the future of work.
The goal is to increase the availability of loans to small businesses. When the program originally launched last year with the CARES Act, much of the money that was supposed to go to small businesses instead went to large companies who had existing relationships with large banks and the funds were quickly exhausted until Congress appropriated more money. The program will be open through March 31.
Under the latest stimulus legislation, businesses can now write off expenses associated with seeking loan forgiveness, and the IRS released guidance last week to allow that, reversing its previous guidance (see story). The SBA also released updated PPP guidance outlining other changes to the program to improve its effectiveness and accessibility last week in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act, which was part of the overall stimulus and appropriations package.
“The historically successful Paycheck Protection Program served as an economic lifeline to millions of small businesses and their employees when they needed it most,” said SBA Administrator Jovita Carranza in a statement Friday. “Today’s guidance builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to ensure their path to recovery.”
Some of the main updates to the program include:
- PPP borrowers can set their PPP loan’s covered period to be any length between eight and 24 weeks to best meet their business needs.
- PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs and worker protection expenditures.
- PPP eligibility has expanded to include 501(c)(6)s, housing cooperatives, destination marketing organizations, along with other kinds of organizations.
- The PPP now offers more flexibility for seasonal employees.
- Some existing PPP borrowers can request to modify their first-draw PPP loan amount.
- Some existing PPP borrowers are now eligible to apply for a second-draw PPP loan.
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 percent reduction in gross receipts between comparable quarters in 2019 and 2020.
“The Paycheck Protection Program has successfully provided 5.2 million loans worth $525 billion to America’s small businesses, supporting more than 51 million jobs,” said Treasury Secretary Steven T. Mnuchin in a statement. “This updated guidance enhances the PPP’s targeted relief to small businesses most impacted by COVID-19. We are committed to implementing this round of PPP quickly to continue supporting American small businesses and their workers.”
The new guidance released Friday includes:
- PPP Guidance from SBA Administrator Carranza on Accessing Capital for Minority, Underserved, Veteran, and Women-owned Business Concerns;
- Interim Final Rule on Paycheck Protection Program as Amended by Economic Aid Act; and
- Interim Final Rule on Second Draw PPP Loans.
Other new guidance released last week includes:
- Top-Line Overview of First Draw PPP Loans
- Top-Line Overview of Second Draw PPP Loans
- Procedural Notice – Modifications to SBA Forms 3506, 3507 and 750 CA (PPP only)
- Procedural Notice - SBA Procedural Notice on Repeal of EIDL Advance Deduction Requirement
Forms were also released, including Form 2483 – Paycheck Protection Program Borrower Application Form and Form 2483-SD – PPP Second Draw Borrower Application Form.
