Now that new COVID-19 relief has been signed into law by President Donald Trump, fintech company Biz2Credit has begun taking ‘pre-applications’ for the new round of the Paycheck Protection Program.
There are some critical changes in the PPP that are designed to ensure that truly small businesses and companies owned by minorities or located in economically disadvantaged areas are better served this time around. The package appropriates $284.5 billion in new funds for the SBA to guarantee first and second round loans from the program.
The second round of the PPP sets aside at least $15 billion for first loans issued to truly small businesses with 10 or fewer employees. The program allows for first loans of $250,000 or lower to be issued to entities in low- or moderate-income areas. The new round of the PPP also sets aside at least $25 billion for second loans to entities that meet eligibility criteria.
To qualify for a second PPP loan, organizations would have to:
- Employ 300 or fewer workers (instead of the previous 500 employee threshold)
- Demonstrate that they had at least a 25% reduction in gross revenue during a quarter in 2020 compared with the same period in 2019, with some exceptions
- Exhaust their first loan before receiving a second one
Most eligible borrowers could receive second loans for as much as $2 million or 2.5 times their average monthly payroll costs, whichever is the lower number. Restaurants and hospitality businesses could receive the lesser of $2 million or 3.5 times their average monthly payroll costs.
“If your business has been harmed by the coronavirus pandemic, you can get financial assistance from lenders approved by the government,” Rohit Arora, CEO of Biz2Credit, said. “Biz2Credit is offering support for companies that need since we are one of the few fintech companies approved for the program. We are ready to help small businesses get PPP funding as quickly as possible when the applications for the second PPP round open. Even if a firm was denied [a] loan during the first round of the program or secured financing from another source during the PPP’s first round, we’re ready to provide assistance.”
Small business owners can fill out an application online and Biz2Credit will be ready to submit to the SBA as soon as the program opens.
“This means faster approval times and confidence that your business has the best shot of receiving funds from the program again,” Arora said. “Companies that already got a PPP loan earlier this year may now apply for a second draw, if they qualify, and businesses that didn’t receive funding during the initial PPP can now apply for a first draw loan. Our online PPP application is tailor-made to the specifications of the SBA and the Treasury Department and is adaptable as regulations change. It has become a trusted platform for small business borrowers, their CPA advisors and lending institutions.”