Community financial institutions given priority access for PPP applications
Photo | Edd Cote
Downtown Worcester
Community financial institutions have been given priority during the second round of Paycheck Protection Program applications, the U.S. Small Business Administration announced on Monday.
The second round of applications, which opened for first draw applicants at 9 a.m. on Monday, will be limited to such smaller institutions for an indeterminate period of time in an attempt to address capital access issues for underserved small businesses. Community financial institutions, which made up 10% of PPP lenders in 2020, include community development financial institutions, minority depository institutions, certified development companies and microloan intermediaries.
Second draw PPP applications will open through those groups on Wednesday. The SBA did not say when additional lenders would be able to submit PPP loan applications, indicating in a press release that it would be “a few days later.”
Up to $284 billion has been authorized for the second round of PPP, and will cover certain business expenses through March 31, the SBA announced last week.
Previous PPP loan recipients will be eligible to apply for a second loan if they’ve used up their previous loan money, have 300 or fewer employees, and can demonstrate at least a 25% reduction in gross receipts between comparable quarters. PPP was established as part of the Coronavirus Aid, Relief, and Economic Security Act, which was enacted in March 2020. The program has provided $525 billion to small businesses and supported 51 million jobs, according to the SBA.
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