On Tuesday, January 19, 2021, the U.S. Small Business Administration opened the second round of Paycheck Protection Program loans to all participating lenders. This is great news for all small businesses, including the promotional products companies that have been directly affected by the Covid-19 pandemic.
The promotional products industry will greatly benefit from this loan as it looks like there won’t be any trade shows or in-person events for at least another few months.
“A second round of PPP could not have come at a better time, and the SBA is making every effort to ensure small businesses have the emergency financial support they need to continue weathering this time of uncertainty,” said Jovita Carranza, SBA administrator. “SBA has worked expeditiously to ensure our policies and systems are re-launched so that this vital small-business aid helps communities hardest hit by the pandemic.”
Towards the end of December 2020, the federal government approved $284 billion in PPP loans as part of another $900 billion covid relief package.
How it works is the SBA works closely with the U.S. Treasury Department to administer PPP loans. At-risk businesses work with SBA-approved lenders to secure the loans.
Beginning the week of January 10th, the SBA began offering the first round of PPP loans to a limited number of organizations like Community Development Financial Institutions, Minority Depository Institutions, Certified Development Companies and Microloan Intermediaries. SBA gave first dibs to these entities in efforts to reach underserved and minority small businesses.
On January 15th, SBA extended access to about 5,000 lenders with $1 billion or less in assets that included community banks, credit unions and farm credit unions.
The 19th marked the full rollout to all lenders.
Thankfully, companies within the promo industry along with other small businesses that already received the first round of PPP loan can apply for a second loan under the following conditions: the business has 300 employees or less, has used all or set to use up the full amount of the first PPP loan, and can prove a 25% reduction in gross receipts in comparable quarters from 2019 and 2020.
The maximum allowed amount of this second PPP loan is $2 million.
For those businesses that did not get the first round of PPP loans, companies with 500 or fewer employees qualify given they meet certain criteria.
This is great news for all the small businesses out there. Financial relief is on the way while vaccine distribution picks up speed. Here’s to hoping we’ve turned a corner with this pandemic.