The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Economic Aid Act), passed in late December, includes more than $284 billion for another round of the Paycheck Protection Program (PPP) loans. Recent action by President Biden has made the program more accessible to organizations.
During this time period, lenders are required to only process loan applications from small businesses and nonprofits. The purpose is to provide more equitable relief by “targeting the PPP to the smallest businesses (and nonprofits!) and those that have been left behind in previous relief efforts,” and to ensure that lenders give smaller employers the attention they need to work their way through the application process.
If you think your nonprofit may be eligible for an initial PPP loan or a second draw loan – and your organization has fewer than 20 employees – NOW is the best time to contact a lender (find eligible lenders) and find out how much relief may be available to you.
Watch the recording on Youtube
Download the slides (PDF)
Speakers:
Julie Clowes, District Director, Small Business Administration, San Francisco District Office (SFDO)
Lucy Salcido Carter, Public Policy Director, CalNonprofits
Jan Masaoka, CEO, CalNonprofits
The PPP 2.0 loan application process runs from January 11 through March 31, 2021. Similar to the PPP in 2020, PPP 2.0 will require borrowers to work through a lending partner approved by the Small Business Administration, and loans are forgivable if borrowers meet the loan forgiveness requirements. For now, only CDFI's are able to accept applications, but small lenders can process applications starting on 1/15/21 and all SBA-approved lenders on 1/19/21. But, there are also a number of new provisions and requirements in PPP 2.0.
The PPP 2.0 includes two avenues for accessing funds: First Draw Loans and Second Draw Loans.
How do I apply?
You must apply through an SBA-approved financial institution, and each of them may have a different process. You can use this website to find a lender to work with: https://www.sba.gov/funding-programs/loans/lender-match.
The following entities affected by Coronavirus (COVID-19) may be eligible:
Both types of loans are forgivable if, within the 8- to 24-week period after the loan is received, the organization:
Funds from both loan types can be spent on:
The new PPP 2.0 includes special set-aside funds (First Draw more than $15 billion, Second Draw more than $25 billion) for borrowers with 10 or fewer employees or for loans $250,000 or less for borrowers in low- or moderate-income neighborhoods.
Nonprofits that received a PPP in 2020 can apply for the new federal Shuttered Venue Operators Grant Program (aka Save Our Stages), if they are eligible, but cannot apply for both a Second Draw PPP loan and a Shuttered Venue Operators grant.