The Small Business Administration’s (SBA) Paycheck Protection Program (PPP) reopened on Monday for Community Financial Institutions (CFI). CFIs are defined as Community Financial Development Institutions, Minority Depository Institutions, Community Development Corporations, or Microlender Intermediaries. The program will open to PPP-eligible lenders with $1 billion or less in assets for First and Second Draw applications on January 15 at 9:00 am. The portal will fully open on January 19 to all participating PPP lenders to submit First and Second Draw loan applications to SBA.
For credit unions offering these loans, the SBA has issued guidance to help financial institutions administer the latest round of funding as outlined in the latest COVID relief bill passed by Congress last month.
There are three key points PPP credit unions should keep in mind:
- New businesses can apply for a PPP loan, as well as businesses that already received one round of PPP funding. It also is important to note that the qualifications concerning the types of businesses that can apply for PPP loans have been modified.
- Economic Injury Disaster Loans (EIDL) are no longer deducted from the amount of the PPP loan that is forgiven. This was a requirement during the first round of the PPP.
- A simplified forgiveness process has been enacted into law. The new forgiveness applies to original PPP loans and new PPP loans under $150,000.
The League has uploaded the most recent SBA documents to the COVID-19 Resource Center for reference. If your credit union has questions or concerns about the program, please feel free to contact the League’s Governmental Affairs team, or reach to the SBA’s Maine District Office at (207) 622-8286.