Paycheck Protection Program Round 2 Is Open

Paycheck Protection Program Round 2 Is Open

Did your business miss out on receiving relief from the first round of funds provided by the Paycheck Protection Program? You’re not alone. The initial PPP initiative was fueled with $349 billion to aid small business owners with the funds they need to pay their employees during the downturn caused by the COVID-19 pandemic. 1.6 million applicants were approved and received funds from this program with the average loan size at $206,000. The problem? There are 30.7 million small businesses in the U.S. and many needed the assistance that this program promised. Unfortunately, the funds ran out in less than 2 weeks after it opened and millions of small businesses were left out.

Thankfully, the government saw the need for more assistance, round two of the PPP was put into motion and the $310 billion relief addition was approved in record time. And now, the highly anticipated reopening of the Paycheck Protection Program round 2 is open. Here’s what we know about round two:

First Come, First Serve

Round 2 opened on April 27, 2020 and small businesses across the U.S. rushed for their second chance at relief. The mad-dash even caused the E-Tran system to crash, causing frustration among lenders trying to get their clients’ applications submitted in hopes of giving them a fighting chance to receive funds this go around. On top of the additional influx of new applications, business owners are also competing with applications that were previously submitted during round 1 that didn’t receive funding before it ran out. So if you haven’t put in your application yet and plan to, do it now!

Special Allocation of Funds to Small Lenders

The PPP’s first round brought to light a few issues. One being, how many small business owners couldn’t compete with the big boys that were sneaking in through the cracks and taking large sums of funds right out from under them. While some outed companies agreed to pay back their funds, there were still plenty of small businesses that couldn’t find a bank to process their application quick enough to make the list. In the second round, the PPP allocated $30 billion to small lenders with less than $10 billion in assets and another $30 billion for small lenders between $10 billion and $50 billion in assets in order to help combat this issue. This special allocation will allow the business owners who bank with smaller banks and credit unions their own pot to pull from.

If you’re in need of assistance and banking on a loan from the Paycheck Protection Program, make sure you do it quickly. It is estimated that these funds will run out faster than round one. Be in constant communication with your bank. Make sure they are going to process PPP loans in round 2 and have a few other banks in mind if you find out your bank isn’t able to process these loans. If you don’t get approved this round, there are other options. The Economic Injury Disaster Loan (EIDL) program was also replenished with $50 billion and many programs and lenders like ourselves are still open and lending to businesses in need. Don’t lose sight of the light at the end of the tunnel. Many states are starting to ease into phase 1 of the reopening strategy plan and with that comes hope that we will see the end to this pandemic nightmare.