COVID-19 remains a threat to the safety and wellbeing of our communities. While I am working hard with my colleagues to pass another round of relief – including additional survival checks, extending and increasing unemployment, providing support to small business and funding our state and local governments, I wanted to share some key information on how to access some of the programs that Congress has already created to help respond to the crisis.
The information below represents some of the most frequently asked questions on relief for small businesses – if you live in the 10th Congressional District and require additional assistance, please submit an inquiry through my website here.
Small Business Relief
Paycheck Protection Program
The Paycheck Protection Program (PPP) reopened for new First Draw applicants on January 11th and for Second Draw applicants on January 13th. Borrowers can apply for a First Draw or Second Draw PPP Loan until March 31, 2021, through any existing SBA 7(a) lender or eligible non-bank lender that is participating in PPP. The new law expands PPP eligibility to include additional categories of borrowers, including housing cooperatives, and expands the definition of “eligible expenses” toward loan forgiveness.
For more information on the Paycheck Protection Program, click here. To search for a lender, visit the Small Business Administration’s Lender Match tool. For the full list of eligible expenses toward loan forgiveness, click here.
You can also connect with a local Small Business Development Center for free small business counseling and assistance with the PPP loan application by filling out an intake form here.
First Draw PPP Loans
At least $15 billion is being set aside for First Draw PPP loans to eligible borrowers with a maximum of 10 employees or for loans of $250,000 or less to eligible borrowers in low- or moderate-income neighborhoods. Borrowers seeking their first PPP loan will be eligible based upon the requirements previously set forth by the CARES Act and restated in the SBA’s January 6th Interim Final Rules.
Second Draw PPP Loans
The Paycheck Protection Program now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan terms as their First Draw PPP Loan. At least $25 billion is being set aside for Second Draw PPP Loans to eligible borrowers with a maximum of 10 employees or for loans of $250,000 or less to eligible borrowers in low- or moderate-income neighborhoods. Businesses do not have to apply at the same lender through which they received their first PPP loan. Full loan terms can be found here.
Increased Assistance for Restaurants and Accommodation Sector Businesses
For most borrowers, the maximum loan amount of a Second Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million. For borrowers in the Accommodation and Food Services sector, the maximum loan amount for a Second Draw PPP Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million. Click here to see if your business qualifies.
Economic Injury Disaster Loans and Advances
After the passage of the new legislation, the SBA announced it would extend the deadline to apply for an Economic Injury Disaster Loan (EIDL) to December 31, 2021. There is also additional funding for EIDL advances, which are $10,000 grants that do not have to be repaid, and the SBA will reach out directly to those who qualify. For more information on the EIDL program or to apply online, click here.
Grants for Shuttered Venue Operators
The bill provides $15 billion for SBA grants up to $10 million to live venues and promoters, independent movie theaters, cultural institutions, theatrical producers, live performing arts organization operators, museum operators, or talent representatives who demonstrate at least a 25% reduction in revenues. A set-aside of $2 billion is reserved for entities with 50 or fewer employees.
The application is still being developed and will be posted by SBA in the near future. Funds will be available in 4 phases. To learn more about these phases and the eligibility criteria, click here.