SBA approves 60K PPP loan applications during the first week
The U.S. Small Business Administration approved approximately 60,000 Paycheck Protection Program (PPP) loan applications submitted by nearly 3,000 lenders, for more than $5 billion, between Jan. 11 and Jan. 17.
“The SBA continues to help small businesses across the nation access vital funds through the Paycheck Protection Program,” said SBA Administrator Jovita Carranza. “Data from our first week, which first allowed hundreds of community financial institutions to submit applications, then opened wider to small banks, demonstrate that we have helped tens of thousands of businesses.”
Carranza added, “The PPP is off to another great start helping our nation’s economy. With PPP reopening for all First and Second Draw loan applications, the SBA remains committed to keeping small business workers on the payroll and their doors open during this challenging time. Moreover, the SBA overperformed operationally, issuing guidance and rules in advance and in alignment with the new law’s requirements.”
First Draw PPP loans are for those borrowers who did not receive a PPP loan before Aug. 8, 2020. The first two PPP rounds open between March and August 2020 were historic successes, helping 5.2 million small businesses keep 51 million American workers employed.
Second Draw PPP loans are for eligible small businesses with 300 employees or less that previously received a First Draw PPP loan. These borrowers will have to use or had used the full amount of their First Draw loan only for authorized uses and demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. The maximum amount of a Second Draw PPP loan is $2 million.
The Paycheck Protection Program remains open for First and Second Draw PPP loans until March 31, as set forth in the Economic Aid Act, or until Congressionally appropriated funding is exhausted.
Additionally, the SBA’s Office of Inspector General (OIG) recently issued a report on its review of the Paycheck Protection Program’s initial implementation. The OIG made recommendations to improve the SBA’s program and reduce the risk of financial loss from PPP loans being made to ineligible or fraudulent borrowers and enhance the SBA’s ability to obtain information necessary for critical program decisions. To view the report.
