Covid 19 – Paycheck Protection Program Reopens

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The U.S. Treasury and Small Business Administration (“SBA”) officially reopened the Paycheck Protection Program (“PPP”) on January 11, 2021, but with a caveat. PPP funds are initially only available for those for businesses applying through community financial institutions (“CFI”) that typically serve the concerns of traditionally underserved small businesses. The SBA has announced that this phased rollout is intended to provide access to funding for many of the smaller businesses that were unable to secure a loan during the first phase of the PPP by allowing CFIs such as Community Development Financial Institutions, Minority Depository Institutions, Certified Development Companies, and Microloan Intermediaries to issue the first loans.

On January 13, 2021, CFIs were allowed to start submitting application information for second draw PPP loans. Second Draw PPP loans are available for eligible borrowers that previously received a PPP loan, generally have 300 employees or less, and have suffered a 25% reduction in gross receipts as defined by the Consolidated Appropriations Act. This morning, January 15, 2021, the loan portal was opened to PPP-eligible lenders with one billion or less in assets for both First and Second Draw applications, with the portal fully opening on January 19th to all participating PPP-lenders.

Regarding the program itself, the SBA has issued revised regulations, entitled “Business Loan Program Temporary Changes; Paycheck Protection Program as Amended by Economic Aid Act,” which can be found here. The SBA has also updated its website to include the new SBA Form 2483-SD which must be utilized by borrowers applying for Second Draw loans. Those borrowers applying for a First Draw loan will still be using SBA From 2483, albeit a new version of the form released on January 8, 2021.

Businesses in need of additional funds, but with concerns over eligibility, should remember that they may still be eligible for additional funds if they did not receive forgiveness on their first loan before December 27, 2020 and have either returned all or part of their original loan, did not draw the entire loan amount that was approved, failed to include compensations for its partners in the original applications, or are a seasonal employer who would now qualify for an increased loan amount. Additionally, those businesses that have not yet but will exhaust their first PPP loan may be eligible for a second loan if they satisfy certain criteria.

The deadline for all borrowers to submit applications under the reopened PPP is March 31, 2021; or earlier if the funding for the program is exhausted.


This alert should not be construed as legal advice or a legal opinion on any specific facts or circumstances. This alert is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. The contents are intended for general informational purposes only, and you are urged to consult your attorney concerning any particular situation and any specific legal question you may have. We are working diligently to remain well informed and up to date on information and advisements as they become available. As such, please reach out to us if you need help addressing any of the issues discussed in this alert, or any other issues or concerns you may have relating to your business. We are ready to help guide you through these challenging times.