After the first round of the Paycheck Protection Program ran out of its initial appropriation of $342 billion in only 13 days, Congress refunded the Small Business Administration disaster programs. $310 billion was allocated for the Paycheck Protection Program, and $50 billion for the Economic Injury Disaster Loan program. The differences between the two programs are outlined here. However, the SBA is not taking applications for the EIDL at this time.

It is expected that the Paycheck Protection Program funds will be depleted after lenders begin to issue funds to businesses that have already submitted their applications but did not receive funds during the first round. The program remains first come first serve. If you haven’t applied, you should apply immediately through a lender you have a relationship with. Smaller community banks have been successful in processing these loans and may get you funding faster than large national banks.

The most significant change in the second round of funding requires borrowers to certify in good faith that they do not have access to additional sources of capital during the pandemic. This change stems from backlash of the program after large chains and publicly traded companies received a large amount of funds from the SBA. The new funding sets aside $60 billion for smaller lenders who generally serve smaller businesses, but does not set aside any funds for underserved businesses.

Other updates for the second round of funding are as follows:

  • Maximum dollar amount is now 10% of PPP funding authority;
  • New operational standards to ensure that lenders access PPP funds based on their asset size; and
  • New guidance for lenders: here.