PPP is back in 2021. Here are the details on getting a second small business loan

As we enter 2021, the U.S. still facing an economic recession and massive unemployment as a result of the continuing COVID-19 pandemic. That means relief packages we were introduced to in 2020 will continue, too.

That includes one program that was widely used: The U.S. Small Business Administration (SBA) said Friday that it will reopen the Paycheck Protection Program (PPP) on Monday, Jan. 11. This year, businesses can apply for a second draw. That means businesses that got a loan last year can get a second draw in 2021.

BREAKING: SBA in consultation with @USTreasury announced today that the #PaycheckProtection Program will re-open the week of January 11 for new borrowers and certain existing PPP borrowers. pic.twitter.com/xg6UruxZd2

— SBA (@SBAgov) January 8, 2021

This comes a couple of weeks after Congress passed a new $900 billion relief bill that included $284 billion to restart PPP. It included some new provisions, and that’s reflected in the rollout.

For one, the first PPP program was widely used, but proved to be less accessible to sole proprietors and entrepreneurs who didn’t have prior banking relationships. This led to data that showed women and minority-owned businesses largely weren’t as helped by the program.

That’s resulting in some reprioritizing this time around. SBA is reopening the loans first to community financial institutions that serve women and minority-owned businesses to provide loans come Monday, and the bill includes specific funding for these lenders. Other lenders, like banks, won’t be able to offer loans until after Wednesday, Jan. 13. (As shown in the tweet below, the specific reopening date has yet to be announced). In all, the program will be open until March 31.

To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13. The PPP will open to all participating lenders shortly thereafter.

— SBA (@SBAgov) January 8, 2021

In line with the new bill, SBA said in guidance issued this week that eligibility for a “Second Draw” loan requires that a business received a first loan and “will or has used” all of the money. It also needs to demonstrate a 25% reduction in gross receipts between between quarters in 2019 and 2020. Businesses also must have fewer than 300 employees.

Key updates include:
• Borrowers can set their loan covered period to be any length between 8 & 24 weeks to best meet their needs
• Loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, & worker protection expenditures

— SBA (@SBAgov) January 8, 2021

It’s among a number of new provisions for PPP, taxes and other business aid programs outlined in the new relief bill. Check out a wider look at the legislation here.