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.
Lanie Raphael is president at B. F. Saul Insurance, where she leads client service, business development, financial strategy, and team growth. She brings over 30 years of experience in commercial and high-net-worth insurance, with past executive roles at Fireman's Fund, AIG, and ACE Private Risk Services. Her background spans risk management, operations, marketing, and product development. Lanie is known for her hands-on leadership and focus on building strong client relationships.
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Prof. Johnson is the Ronald A. Kurtz (1954) Professor of Entrepreneurship at the MIT Sloan School of Management. He is also a senior fellow at the Peterson Institute for International Economics in Washington, D.C., a co-founder of BaselineScenario.com (a much cited website on the global economy), a member of the Congressional Budget Office's Panel of Economic Advisers, and a member of the FDIC's Systemic Resolution Advisory Committee. He is also a member of the private sector systemic risk council founded and chaired by Sheila Bair in 2012. Prof. Johnson is a weekly contributor to NYT.com's Economix, is a regular Bloomberg columnist, has a monthly article with Project Syndicate that runs in publications around the world, and has published high impact opinion pieces recently in The Washington Post, The Wall Street Journal, The Atlantic, The New Republic, BusinessWeek and The Financial Times, among other places. In January 2010, he joined The Huffington Post as contributing business editor. Professor Johnson is the co-author, with James Kwak, of 13 Bankers: The Wall Street Takeover and The Next Financial Meltdown, a bestselling assessment of the dangers now posed by the U.S. financial sector (published March 2010) and White House Burning: The Founding Fathers, Our National Debt and Why it Matters to You (April 2012). In his roles as a professor, research fellow and author, Professor Johnson's speaking engagements include paid appearances before various business groups, including financial institutions and other companies, as well before other groups that may have a political agenda. He is not on the board of any company, does not currently serve as a consultant to anyone, and does not work as an expert witness or conduct sponsored research. His investment portfolio comprises cash and broadly diversified mutual funds; he does not trade stocks, bonds, derivatives or other financial products actively. From March 2007 through the end of August 2008, Prof. Johnson was the International Monetary Fund's Economic Counselor (chief economist) and Director of its Research Department. He is a co-director of the NBER Africa Project, and works with nonprofits and think tanks around the world. Johnson holds a B.A. in economics and politics from the University of Oxford, an M.A. in economics from the University of Manchester, and a Ph.D. in economics from MIT. He won the Nobel Prize in Economics in 2024.
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.
