SBA Releases Procedural Notice on PPP Loan Increases
The expanded Paycheck Protection Program (PPP) reopened today for lenders with less than $1 billion in assets and will open for all other lenders on January 19, 2021. Certain existing PPP borrowers can apply in either application window for a first-draw or second-draw (PPP2) loan.
On January 13, 2021, the Small Business Administration (SBA) released a procedural notice that provides guidance on reapplying or requesting an increase for a first-draw PPP loan. The requirements below must be met to reapply for a PPP loan or to be eligible to request a loan increase:
- If the SBA has remitted a forgiveness payment to the lender, then the business is only eligible for a second-draw PPP loan.
- Increases to the first-draw PPP loans can be made by the lender of record for the loan.
- Businesses that returned or repaid the first-draw PPP loan may request a loan increase for the difference between the amount the business repaid and the original loan if the lender reported that the businesses paid back some funds by December 27, 2020, to the SBA. Businesses that did not accept the PPP loan before December 27, 2020, may apply for an increase in the loan amount previously approved.
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If you have questions about the information outlined above or need assistance with a PPP or PPP2-related issue, Klatzkin can help. For additional information, click here to contact us. We look forward to speaking with you soon.
©2021 Klatzkin & Company LLP. The above represents our best understanding and interpretation of the material covered as of this post’s date and should not be construed as accounting, tax, or financial advice. Please consult your advisor concerning your specific situation.