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Small Business Administration Re-Opens Paycheck Protection Program

For CEOs, CFOs, COOs

On Jan. 11, the Small Business Administration (SBA) began accepting applications for Paycheck Protection Program (PPP) first draw loans from qualifying organizations that previously haven’t received them.  

The Consolidated Appropriations Act of 2021 reauthorized the lending under the program through March 31 or until the additional $284 billion appropriation is exhausted. The legislation also provides second draw loans for certain organizations. 

Hospitals, health systems, and health care providers may be eligible for First or Second Draw loans. First draw loans are available to small businesses and 501(c)(3) non-profit organizations with fewer than 500 employees (full time and part time). Loans may be awarded for up to the lesser of $10 million or 250% of average monthly payroll costs. An application for a first draw loan is available on the SBA website

Eligibility criteria for a second draw loan are narrower. Applicants must employ 300 or fewer employees, suffered a reduction in gross receipts of at least 25%, and have previously received a first draw PPP loan. The loan may not exceed the lesser of the product of the recipient’s average monthly payroll costs for 2019 or for the one-year period before the PPP loan is made, multiplied by 2.5 and $2 million. The application for a second draw loan is also available on the SBA website.  

Eligible borrowers qualify for full loan forgiveness of first or second draw loans if the following occur during the eight-to-24-week period covered period after loan disbursement: 

  • Employee and compensation levels are maintained. 
  • The loan proceeds are spent on payroll costs and other eligible expenses 
  • At least 60% of the proceeds are spent on payroll costs.

Additional information on the PPP is available on the SBA website.