The Small Business Administration announced today that the Paycheck Protection Program will officially reopen on Monday, Jan. 11, only to community development financial institutions, minority depository institutions, certified development corporations and microloan intermediaries making first-draw PPP loans. On Wednesday, these community financial institutions—the lenders previously mentioned as defined by the Small Business Act—may begin making second-draw PPP loans, and the program will open to all remaining lenders “shortly thereafter.”
SBA will provide updated forms in the coming days for borrowers and lenders to use for first draws and second draws, as well as updated lender participation applications for any new lenders wishing to participate in the program. Lenders that were previously making PPP loans do not need to re-register with SBA to participate in this round of funding, although all participating lenders must register on SAM.gov.
Importantly, SBA noted that in this round of the PPP, for both first-draw and second-draw loans, there will be a time lapse between when the lender submits the PPP application information and when the SBA provides the SBA loan number to the lender. This change is to allow for additional compliance checks, and SBA and Treasury Department officials said that lenders should not expect to receive the SBA loan number on the same day the loan application is submitted.
In another significant change, SBA and Treasury officials said that loan applications will not be submitted through the E-Tran system for this round of funding. Instead, loan data can be entered using either a new web-based platform or through an API. Additional technical information will be provided directly to lenders by SBA as soon as today. On a call with financial trade associations today, SBA and Treasury officials offered assurances that “there are sufficient funds to meet expected demand” and urged lenders to exercise patience when submitting loan applications through the new platform.
American Bankers Association President and CEO Rob Nichols welcomed the reopening of the program and efforts to ensure PPP funds reach underserved communities. “America’s banks welcome the SBA’s announcement that the Paycheck Protection Program will restart next Monday for community development financial institutions and minority depository institutions, followed soon after by all lenders,” Nichols said. “Just as they did at the start of the pandemic, banks of all sizes across the country stand ready to help struggling small businesses gain access to these critical funds.”
Lenders can contact SBA’s PPP Lender Hotline at 1-833-572-0502 with questions, and may find the latest updates and guidance online at sba.gov/ppp.