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New Paycheck Protection Program funding

As small businesses like restaurants and shops continue to struggle financially, the Small Business Administration is now reopening the Paycheck Protection Program, also known as PPP.
Published: Jan. 18, 2021 at 5:57 AM EST
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HARRISONBURG, Va. (WHSV) - A second round of money from the Paycheck Protection Program will be available to banks across Virginia staring today, Monday, Jan. 18.

As small businesses like restaurants and shops continue to struggle financially, the Small Business Administration is now reopening the Paycheck Protection Program, also known as PPP.

“It’s critically important,” says Peirce Macgill, Assistant Director of Harrisonburg Economic Development. “It’s the difference between somebody being unemployed or not.”

Macgill says PPP is mainly designed to help businesses cover the cost of their employees, but the program is also expanding. It’s allowing 40% of the loan to be used on rent and mortgage, as well as personal protective equipment, COVID-19 facility renovations and vandalism from protests.

“The hard part with these funds is you want to get them into the hands of the people who need them most, and that can be difficult in a lot of cases,” Macgill said.

2020 saw the first round of PPP, with $525-billion issued to the program from the federal government. This time around, the Stimulus Act has granted $284-billion to be given out by banks, with an emphasis on underserved small businesses.

“At least $25-billion dollars of the PPP, the second round, is being set aside for eligible borrowers with 10 employees or less, so the new round is designed to help folks that haven’t accessed the PPP last year,” said Allison Dugan, Assistant Director of the Small Business Development Center in the Shenandoah Valley.

If you’re applying for a second loan, new requirements state you need to prove 25% reduction in business due to COVID-19. If this is your first time applying, you should prepare yourself.

“I would say immediately call your banker, or immediately call the Small Business Development Center, just to have a conversation,” Macgill said.

“Prepare yourself with the documents. Your tax returns, your payroll, etc.” said Dugan.

Loan amounts will vary, and can range from 2.5x your average monthly payroll costs to 3.5x that average, depending on each individual business situation. Individual loan amounts in total can reach up to $2-million.

Since Jan. 11, 2021 the Small Business Administration has been allowing banks to open lending portals in a staggered structure, with small community banks first.

If you’re looking to apply for this second draw of PPP, talk to your bank directly, or visit www.sba.gov to take a look at specific requirements, and view the application itself.

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