Here’s how the new small-business relief program start will work.
The Paycheck Protection Program reopens this week, and underserved borrowers — including women-led businesses and those run by Black, Latino and Asian owners and other minorities — will be first in line to tap the new funds, The New York Times’s Stacy Cowley reports.
Starting Monday, a group of specially designated institutions known as community lenders, which specialize in working with Black- and minority-owned small businesses, will begin accepting applications for new loans. The government said larger financial institutions and banks would begin processing loans “shortly.”
Giving community lenders a head start is intended to address complaints that the aid was not distributed equitably the last time around. Here are more details about the new program.
Borrowers were previously limited to just one loan, but the new funding will be available to both first-time and returning borrowers. Businesses will be eligible for a second loan if they suffered a sales drop of 25 percent or more in at least one quarter of 2020, compared with the previous year.
Second loans will be restricted to businesses with no more than 300 employees; initial loans are available to larger companies, generally those with up to 500 workers.
The Small Business Administration, which manages the program, said it would begin accepting applications on Monday from community lenders seeking loans for first-time borrowers. On Wednesday, those lenders will be able to submit applications from people seeking second-round loans.
The S.B.A. will no longer approve loan applications instantaneously, a move that previously allowed some borrowers to receive their loan funds just hours after they applied. Now approvals will generally take at least one day.
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