Housing cooperatives and nonprofit organizations could be eligible for a new round of federal Paycheck Protection Program funding, which reopens this week for new borrowers and some existing PPP borrowers.
“The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, direct marketing organizations, among other types of organizations,” the U.S. Small Business Administration said in a press release last week.
The new round of PPP authorizes $284 billion toward job retention and certain other expenses incurred by the COVID-19 pandemic through March 31. Funding comes from the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act signed into law last month.
The PPP loans open today to community lenders that will first allow businesses that have already received loans from the first round, which opened last April. Community lenders include community financial development institutions, minority depository institutions, community development corporations and microlender intermediaries.
First draw borrowers will have to have spent their loan money from the first round before applying for a second round of funds. They will have the same eligibility requirements as during the first round of PPP, such as being a business with 500 or fewer employees.
On Wednesday, applications will open through community lenders to first-time PPP applicants, and “shortly thereafter” PPP will open to all participating lenders.
New applicants will have more restrictive eligibility requirements than those who applied during the first round of funding. Eligible businesses will have 300 or less employees and have experienced a revenue reduction of 25% or greater in 2020 relative to the same period in 2019.
Some existing PPP borrowers will be able to request to modify their first-draw PPP loan amount.
SBA will guarantee 100% of second-draw PPP loans, and it may forgive up to the full principal loan amount.
In 2020, Congress allocated $349 billion to the first round of PPP funding, which ran out in two weeks. They subsequently allocated $320 billion in additional funds to the program.
The Kodiak Chamber of Commerce urges businesses to apply as soon as they can and have their paperwork organized and ready.
“We look forward to businesses having multiple opportunities to access funds,” said Sarah Phillips, the chamber’s executive director.
Phillips also advised businesses to contact multiple lenders and apply with the first lender that has available applications. She said information will change fast, and urgesd businesses to be patient with the lenders.
“Be patient with them because they are just getting this information themselves,” she said.
Other programs opening include the Economic Injury Disaster Loan Program, Employee Retention Credit and Shuttered Venue Operator Grant Program.
Phillips said the Chamber of Commerce will be available to any business, even if not a member, for questions, help and tips for economic aid applications and opportunities.