The PPP has fresh funding for 2021: Can my business get a forgivable loan?

Since President Trump signed the bill approving a new round of funding for 2021 to support the Paycheck Protection Program and Economic Injury Disaster Loans to help small businesses struggling to survive during the COVID-19 pandemic, many businesses wonder if they can still apply for an SBA PPP loan or EIDL grant.

The answer is yes (at least for PPP loans; the EIDL grant program is currently not open). There was originally a huge backlog of PPP applications left over from the first round of funding in 2020 (during which roughly 1.6 million businesses were approved for $350 billion in PPP loans), and the ~$320 billion influx of new cash in April 2020 didn’t last much longer. However, due to new rules, it’s likely that this round of PPP funding will last longer and be able to help more of America’s struggling small businesses in 2021.

Key PPP updates for 2021 include:

  • PPP borrowers can set their PPP loan’s covered period to be any length between 8 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;
  • The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, destination marketing organizations, among other types of organizations;
  • The PPP provides greater flexibility for seasonal employees;
  • Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
  • Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.

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There are some provisions in the new bill which are intended to extend the reach of the funding to marginalized lenders and businesses, and that $60 billion portion may last a bit longer, but we expect that the main pot of new funding will be snapped up quickly.

Since “larger small businesses” have been getting PPP loans, will there be any left for me?

There is a growing social “shaming” trend against larger, multi-million-dollar businesses (still below 500 employees per the requirements of the PPP) receiving large PPP loans when the intent of the bill is to help save America’s small businesses and employees’ jobs. 

But of course these larger, more successful businesses are also feeling the impacts of the COVID-19 crisis and have more employees that are in need of a paycheck, despite not being able to work full or even partial hours, or these businesses being closed by state laws. 

Since social pressure has been motivating larger (technically small) and profitable businesses with other cash resources to refuse the opportunity to acquire PPP funding (and in a few well-publicized cases, to return their PPP loan money in a gesture of good will and good publicity), this may potentially leave more truly small, local businesses with a better chance of getting PPP loans in this round of funding. In addition, for 2021, community lenders will have first access to the PPP loan application portal, which will hopefully get more truly small businesses the help they need.

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