The Paycheck Protection Program reopened Monday for new borrowers and certain existing borrowers, according to the Grand Island Chamber of Commerce.
The U.S. Small Business Administration has said that, to promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday and Second Draw PPP Loans on Wednesday, with the PPP open to all participating lenders shortly thereafter.
According to the SBA, this round of the PPP continues to prioritize millions of Americans employed by small businesses by authorizing up to $284 billion toward job retention and certain other expenses through March 31. It also will allow certain existing PPP borrowers to apply for a Second Draw PPP Loan.
SBA Administrator Jovita Carranza said the Paycheck Protection Program served as an “economic lifeline to millions of small businesses and their employees when they needed it most.”
Carranza said the new guidance builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to ensure their path to recovery.
The Paycheck Protection Program provided 5.2 million loans worth $525 billion to America’s small businesses, supporting more than 51 million jobs, according to Treasury Secretary Steven Mnuchin.
“This updated guidance enhances the PPP’s targeted relief to small businesses most impacted by COVID-19,” Mnuchin said.
PPP updates include:
— PPP borrowers can set their PPP loans covered period to be any length between eight and 24 weeks to best meet their business needs.
— PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs and worker protection expenditures.
— The program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives and destination marketing organizations, among other types of organizations.
— The PPP provides greater flexibility for seasonal employees.
— Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount.
—Certain existing PPP borrowers now are eligible to apply for a Second Draw PPP Loan.
While PPP has provided relief to Grand Island’s economy, it still is reeling from the economic effect of the pandemic.
The Grand Island Chamber of Commerce reported that net taxable sales in October were down 3.5% from the previous year. In 2019, net taxable sales were $89.35 million, compared to $86.39 million in October 2020.
In the Tri-Cities area, only Kearney had an increase of 4% in net taxable sales in October 2020, compared to October 2019.
But motor vehicle sales in Hall County in October continued the trend of exceeding last year’s sales. Off to a slow start when the pandemic hit the area economy, it quickly shifted gears. That trend continued in October with a 24.5% increase for that month over the previous year.
The lodging industry in Grand Island has yet to recover from the pandemic’s economic effect as Hall County’s lodging tax totaled $57,885 in October, compared to $79,987 in October 2019.
According to the Platte Institute, PPP is one of the largest parts of the federal government’s CARES Act relief legislation. PPP provides loans intended to help small businesses — those with 500 or fewer employees — maintain their payroll, hire back any employees who were laid off, and cover applicable overhead expenses such as rent and utilities.
The Platte Institute said that since the program was approved in late March, Nebraska businesses have received 42,497 loans amounting to more than $3.4 billion.
“This money has helped to retain 327,536 jobs across the state during a time when Nebraska experienced its highest unemployment rate in recorded history, 8.3%. PPP loans range from $80 to $10 million and have been used by all types of businesses, ranging from nonprofits to corporations,” according to the Platte Institute.
It said that 75% of the loans approved are for amounts less than $50,000 and loans were received in all 93 Nebraska counties.
The 3rd Congressional District received the greatest number of loans in the state,” the Platte Institute said.
“This is partly due to the agriculture sector being one of the hardest-hit industries, amounting for 18.6% of the state’s loans and 7,905 jobs,” it said. “Specifically, corn farming and beef cattle ranching and farming had the most jobs affected.”
According to SBA data, 72% of the loans went to pass-through entities supporting 181,778 jobs, with the two largest sectors being agriculture and construction.
Loans of less than $150,000 make up 90% of all the loans issued in Nebraska, which indicates that businesses needing help amid the pandemic are not multimillion-dollar corporations, but relatively small firms that would greatly benefit from a tax break, the Platte Institute said.
With the new round of PPP, the SBA said a borrower is generally eligible for a Second Draw PPP Loan if the borrower:
— Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses.
— Has no more than 300 employees.
— Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.