This week saw the rollout of round 2 of the Paycheck Protection Program (PPP), the federal program designed to give loans to struggling small businesses during the Covid-19 pandemic. The first round of PPP doled out 1.6 million loans totaling $350 billion in a matter of weeks, leaving many more small businesses empty-handed. After Congressional Democrats delayed additional funding for more than a week while pushing for other items, round two ultimately added another $310 billion to PPP.
As expected, the second round of PPP funding is already flying out the door. "Since Monday, the total approved is nearly a million loans totaling over 90-billion dollars," says Mark Winchester with the Small Business Administration (SBA) Houston office. "I think that speaks for itself."
The first round of PPP was hampered by issues including bottlenecks and delays by some large banks that were getting the bulk of applications, along with some decidedly non-small businesses getting money. Shake Shack, Ruth's Chris Steak House, Taco Cabana and the Los Angeles Lakers all announced they were giving back loans acquired through PPP after facing public scrutiny.
Winchester tells KTRH there are new rules in place for round two, designed to get more lenders involved. "No one lending institution can exceed more than 10 percent of the total 310-billion, and 60-billion in loans were set aside for lenders that have assets of under 50-billion," he says. In addition, the SBA will now review every loan to screen out those that aren't "small" businesses.
With so many billions going into the hands of businesses, Winchester says they are now moving to the next phase of the process. "Now that you've got the PPP funds, what next? Well, part of that is loan forgiveness...how do you handle that, how do you administer that, how do you obtain that," he asks. There are resources and webinars available for small businesses needing guidance on getting loans, or what to do after getting them. More info is available at the SBA resources page or iHeartMedia's small business resources page.