DCR Economics: The Paycheck Protection Program will open up for borrowers next week.☕☕☕

Ayyeee… What’s Goodie Everyone. So I got some tea and it involves the Paycheck Protection Program.

The Paycheck Protection Program will open for all applicants on Tuesday January 19,2021, the Treasury Department said on Wednesday.

The stimulus package passed last month included $284 billion dollars in funding the small business relief effort, which made $523 billion in loans last year to 5.2 million recipients. The new funding will be available both to first time applicants and to some returning borrowers.

Borrowers seeking a second loan will need to demonstrate a 25 percent drop in gross receipts between comparable quarters in 2019 and 2020. Second loans will also be limited to companies with 300 or fewer workers, and the amounts will be capped at $2 million.

Starting Tuesday, loans will be available from thousands of lenders, including national banks like Bank of America, JPMorgan Chase and Wells Fargo; most regional banks; and financial technology companies like PayPal.

Some smaller lenders have already gotten started. Community Development Financial Institutions, Minority Depository Institutions and Certified Development Companies specially designated lenders that focus on underserved populations, including Black owned businesses were allowed to start taking loan applications this week. And on Friday, lenders with $1 billion or less in assets will be allowed to start submitting applications.

The Small Business Administration, which manages the program, has not said how many applications it has already received. Unlike the first round, when the agency approved loans instantaneously, approvals will now take at least a day because of new fraud safeguards the agency has adopted.

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