Small-business owners will have access to new PPP funding.
SBA prepares for new round of PPP loans
The U.S. Small Business Administration has yet to release a date for when it will start accepting new Paycheck Protection Program loan applications, but it has revealed who gets to go first. The agency plans to accept PPP loan applications only from community financial institutions for “at least the first two days” when the loan portal reopens, according to guidance the agency issued Wednesday. Such lenders include community development financial institutions, known as CDFIs, minority depository institutions and other entities that traditionally work with undeserved or underbanked businesses, as well as certain local, government-backed lenders or state development companies.
The agency’s goal, it said, is to ensure increased access to the PPP for businesses owned by people of color, veterans, women and those in underserved geographic areas. Lending to those groups was considered by many to be a major gap in the program’s first rounds last year. Industry observers expect the SBA to release additional guidance, though much of the groundwork has been laid with the rules already announced, unlike the agency’s initial rounds, which critics said were too vague or ambiguous as guidance trickled out over time.
The $284 billion in potentially forgivable loans that will become available draws from the $900 billion federal stimulus package passed in December. Other SBA programs and additional measures intended to help cash-strapped or struggling small businesses drew support from the stimulus package as well.
*Written by the National Observer