Bergman shares new update on PPP reopening and guidance
The Paycheck Protection Program (PPP) continues to reopen in a sequential fashion.
This past Monday, Jan. 11, the PPP reopened for small businesses and other newly eligible entities that did not receive a PPP loan during the first round of the program this summer. The Small Business Administration (SBA) and the Department of the Treasury reserved the Monday opening for Community Financial Institutions (CFIs) to submit PPP loan applications.
Wednesday, Jan. 13, the PPP reopened for eligible small businesses and entities interested in receiving a second PPP loan. The SBA and the Department of the Treasury again reserved this opening period for CFIs to submit applications.
Jan. 15, all lenders with $1 billion or less in assets will be allowed to submit applications for First and Second Draw PPP loans.
The PPP will reopen to all lenders, no matter their size, on Tuesday, Jan. 19.
Over the last week, federal agencies have published and released helpful information as it pertains to PPP. Below is an overview of a few important documents.
– Congress settled the debate surrounding PPP tax deductibility in the latest COVID Relief bill. Expenses made during the covered period can now receive a deduction. This Internal Revenue Service (IRS) guidance nullifies the previous Revenue Ruling on this topic and outlines the change as described in law.
– As outlined in the December COVID-19 Relief bill, the requirement to deduct an Economic Injury Disaster Loan (EIDL) Advance from PPP Loan Forgiveness has been repealed. Borrowers who already moved through the PPP Loan Forgiveness process will be made whole. The SBA published this Procedural Notice outlining the repeal and how PPP loans that have already received forgiveness will be handled.
– If a lender participated in the first round of PPP, they do not have to reapply to be a lender during the second round of PPP. This SBA Procedural Notice outlines this determination. If a new lender is interested in participating in PPP for the first time, they can apply using one of the following application forms:
— Form 3506 for Federally Insured Depository Institutions, Federally Insured Credit Unions, Farm Credit System Institutions
— Form 3507 for Non-Bank and Non-Insured Depository Institution Lenders
The SBA and the Department of the Treasury intend to release updated PPP Loan Forgiveness guidance this month.
On Monday, Rep. Bergman provided an update to small businesses that the SBA and Treasury were Re-Opening the PPP.