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.
John Bovenzi is a co-founder of The Bovenzi Group, a boutique financial consulting firm. He served as deputy to the chairman and chief operating officer of the Federal Deposit Insurance Corp. for 10 years.
Grayson Milbourne is the Security Intelligence Director at OpenText Cybersecurity, a division of OpenText. Grayson's nearly two decades of security intelligence expertise include malware analysis, data science, and security education. In his current role, Grayson is focused on efficacy development to ensure the company's security management products (which include the Webroot portfolio) are able to defend against the most cutting-edge threats.
Grayson is a longtime advocate for better 3rd party testing of security products and represents OpenText Cybersecurity at the Anti-Malware Testing and Standards organization, AMTSO. Through his efforts, AMTSO released testing standards that greatly improved testing quality when followed. Grayson is an avid participant in the security community and drives awareness of current threats by speaking at major events such as RSAC and Virus Bulletin. He is a frequent guest on local NBC affiliates and several cybersecurity podcasts. Beyond his passion for protecting people from cyberthreats, Grayson loves aviation and holds a private pilot license. His other passions include strategic boards games, skiing and playing golf. He lives in Louisville, Colorado with his wife, Danielle and their two cats, Theodore and Aiden.
Merrilee Matchett is the head of Global Customer Service & Operations and a member of the Strategic Advisory Group for MetLife. In this role, she directs a team of more than 10,000 associates responsible for managing the operations and servicing teams that support and enable the U.S. Group Benefits, Retirement & Income Solutions, MetLife Holdings, and Asia, EMEA and LATAM businesses across more than 40 global markets. She is also the Chairperson of MetLife Europe, and MetLife Europe Insurance.
Matchett joined MetLife in 2021 from Bank of America, where she was responsible for service and operations for global wealth management, private banking, and institutional and personal retirement businesses supporting more than $3 trillion in client balances. She was also the Chairperson of Financial Data Services, LLC, responsible for the end-to-end operational support of domestic and offshore mutual funds.
Matchett has been an advocate for diversity and women in financial services throughout her 30-year career and has been recognized with numerous market awards for outstanding service and operations performance. She is a member of the MetLife enterprise Diversity, Equity & Inclusion Council, and represents MetLife on the board of INROADS, helping to provide career pathways for talented diverse youth across the United States.
She holds a B.A. in management with a law major from the University of Canberra, Australia. Additionally, she is FINRA accredited and licensed to trade and run a broker dealer.
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.
