SBA reopens PPP to lenders on Friday
The US Small Business Administration plans to reopen the paycheck protection program to small lenders on Friday and to all lenders next Tuesday.
The SBA and the Treasury Department said on Wednesday that PPP-eligible lenders with $ 1 billion or less in assets for “first draw” and “second draw” requests will be able to offer loans through the PPP portal on the 15th. January starting at 9 a.m. ET. . First Draw Requests are for businesses that did not borrow from PPP last year, while Second Draw Requests are for smaller businesses that need to borrow again. The portal will open fully on January 19 for all participating PPP lenders to submit first and second draw loan applications to the SBA.
Accounting firms will be able to help their clients access loans after gaining experience with the program last year.
“We spent all the Christmas holidays preparing for this and reviewing our internal processes,” said Frank Balestreri, Audit Partner at Sensiba San Filippo. “The first time we did this you had to fly by the seat of your pants because everything changed almost daily. Now we have a little better understanding of the process and the documents that will be required, and third party payroll providers have really stepped up their game to get reports that will come in handy in these situations.
Earlier this week, the SBA first gave dedicated PPP access to community banks, including community development finance institutions, minority depositories, certified development companies and microcredit intermediaries as part of the program. its efforts to reach underserved and minority small businesses after complaints that many minority businesses were unable to secure PPP loans last year.
On Friday, the SBA plans to continue its focus on reaching small lenders and businesses by opening up to about 5,000 additional lenders, including community banks, credit unions and farm lending institutions. The SBA also intends to provide dedicated hours of service to small lenders after the portal fully reopens next week.
“A second round of PPP could not have come at a better time, and the SBA is doing everything possible to ensure that small businesses have the emergency financial support they need to continue through this period of uncertainty.” SBA administrator Jovita Carranza said in a statement. Wednesday. “The SBA has worked diligently to ensure that our policies and systems are revived so that this vital small business aid helps communities hardest hit by the pandemic. I strongly encourage American entrepreneurs in need of financial assistance to apply for a first or second draw PPP loan.
First-draw PPP loans are intended for borrowers who have not received a PPP loan before August 8, 2020. The first round of the PPP, which took place from March to August of last year, enabled 5 , 2 million small businesses to keep 51 million workers employed. .
Second Draw PPP Loans are for qualifying small businesses with 300 or fewer employees who have already received a First Draw PPP Loan and will use or have used the full amount only for
permitted uses, and which can demonstrate a reduction of at least 25% in gross revenue between comparable quarters in 2019 and 2020. The maximum amount for a second drawdown PPP loan is $ 2 million.
“We are happy to have opened PPP loans to CDFI, MDI, CDC and microcredit intermediaries. The PPP is already providing American small businesses hardest hit by the pandemic with vital economic relief, ”Treasury Secretary Steven Mnuchin said in a statement. “While the program will reopen for all first and second draw borrowers next week, the P3 will allow small businesses to keep workers on their payroll and connected to their health insurance.”
Updated PPP forms, tips and resources are available on the site ASB website.
Balestreri believes his firm has learned from his experiences last year with the program, but he also has some advice for other firms helping their clients this year. “I think we’re going to be in a much better position, but the toughest cases are where companies do payroll in-house, and you have to try to put it all together to make sense because there are limits. like the $ 100,000 annual salary limit, “he said.” Even if you have a payroll, you need to be able to limit it and do the right math. This is where businesses get confused, including all the rules, what you can include, what is excluded, what are the limitations This is where CPA firms can really step in and prepare a case for them that they can then give to their lender.
He walks clients through the process as they try to navigate their lenders’ online portals. “The other area where I’ve seen companies struggle a lot is with the online portals that banks have put in place,” Balestreri said. “They get confused when they go by, and for those of us who have seen this over and over again, what I can tell you is that almost all of the banks I have dealt with have a bit of a process. different. This in itself makes it difficult to consult with customers because you don’t know exactly what each bank is going to do. Typically what we do is make a Zoom call with a customer, get them connected, then walk them through the process, and the white glove all the way. It really helps relieve anxiety from the whole process and makes them feel a lot better about what they’re doing.