HARLINGEN — The low-interest loans of the federal Paycheck Protection Program are again available to new borrowers and certain existing loan recipients, Small Business Administration officials say.
The federal SBA program has been popular with businesses — $525 billion has been loaned so far — seeking to retain workers despite the impact of COVID-19 and related business slowdowns.
Only community financial institutions will be able to make First Draw PPP Loans beginning Monday, and Second Draw PPP Loans on Wednesday.
SBA officials said all participating lenders will soon be able to make the loans.
The new funds for PPP are available due to the recent congressional action to authorize the money, which will allocate up to $284 billion toward job retention and certain other expenses through March 31, and by allowing certain existing PPP borrowers to apply for a Second Draw PPP Loan.
“ Today’s guidance builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to ensure their path to recovery,” said SBA Administrator Jovita Carranza.
“ The Paycheck Protection Program has successfully provided 5.2 million loans worth $525 billion to America’s small businesses, supporting more than 51 million jobs,” said Treasury Secretary Steven T. Mnuchin. “This updated guidance enhances the PPP’s targeted relief to small businesses most impacted by COVID-19.”
Businesses eligible for First Draw PPP loans can only use the money for authorized purposes, must have no more than 300 employees and can demonstrate at least a 25 percent reduction in gross receipts between comparable quarters in 2019 and 2020.
New rules in the program allow PPP borrowers to set their loan’s covered period to be any length between eight and 24 weeks and will cover additional expenses, including operations expenditures, property damage costs, supplier costs and worker protection expenditures.
PPP loans have a fixed interest rate of 1.0 percent. Loans issued prior to June 5 have a maturity of two years, and loans issued after that date have a maturity of five years.