On February 24, 2021, a 14-day Exclusivity Period started for businesses and nonprofits with fewer than 20 employees giving them first priority to Second Draw Paycheck Protection Program (PPP) loans. All applications already submitted by lenders to SBA before the start of the exclusivity period will still be processed. The purpose of the Exclusivity Period is so lenders can focus on serving smaller companies. Once the exclusivity period ends, lenders can submit PPP loan applications for all eligible businesses and nonprofits again. This period ends on Tuesday, March 9, 2021, at 2 PM PST.
Second Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for:
- Mortgage interest
- Rent
- Utilities
- Worker protection costs related to COVID-19
- Uninsured property damage costs caused by looting or vandalism during 2020
- Certain supplier costs and expenses for operations
Why pause the application period for everyone?
A critical goal from Congress for the latest round of PPP was to reach small and low-to-moderate income (LMI) businesses. In this round, Congress set aside $15B for small and LMI first draw borrowers. However, Round 2 has only deployed $2.4B to small LMI borrowers. This is in part because a disproportionate amount of funding is going to firms with more than 20 employees. The Exclusivity Period hopes to provide this support, especially to sole proprietors, ITINs, and returning citizens.
Currently, less than half of the $284B set aside for Second Draw PPP loans are approved and disbursed. Of the $140B distributed, only 18% ($25B) has gone to the Accommodation and Food Services sector. This sector, especially those with less than 20 employees, desperately needs these funds to survive.
The deadline for all entities to apply for the Second Draw PPP loans is March 31, 2021.
To find ways to take advantage of the new Second Draw PPP Loans, contact Time Equipment Company by Email or 800-977-8463.
*This document simplifies complex Acts as it is understood by Time Equipment Company. It is not to be taken as legal advice. The regulations for this program are changing. For further information about the Paycheck Protection Program please visit www.sba.gov or www.coronavirus.gov
