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The Paycheck Protection Program has reopened

The program was re-authorized on Dec. 27 with a new combined allocation of $284.5 billion.


The recently resurrected Paycheck Protection Program was officially reopened this week by the U.S. Small Business Administration.

Congress initially opened the PPP in March 2020. The program was re-authorized on Dec. 27 with a new combined allocation of $284.5 billion in funding aimed at small businesses. 

Many protocols remain the same, but several important changes have occurred, according to the governor’s office:

  • Participating Lenders: For the time being, PPP loans can generally only be made at Community Development Financial Institutions (CDFIs) or Minority Depository Institutions (MDIs). The program will open to other lenders in the near future, but the exact day has not been announced by the SBA.
  • Eligible Borrowers: The maximum size of a PPP loan remains the same. However, it specifically can allow 2.5 times a borrower’s average monthly payroll cost, up to $10 million. Borrowers are now labeled as either first draw or second draw borrowers. All borrowers have until March 31, 2021, to secure their first or second PPP loan.

According to the release, a first draw borrower is an individual who has not previously received a PPP loan. 

“As before, the borrower must have been operational before February 15, 2020, and have no more than 500 employees,” according to the governor’s office. “But in this round of PPP funding, some businesses previously ineligible for a PPP loan now qualify, such as 501(c)(6) organizations, housing cooperatives and direct marketing organizations.” 

Second draw borrowers — individuals who have received a PPP loan previously and have or will use the full amount of funds for authorized uses — can have no more than 300 employees and must demonstrate “a 25% reduction in gross receipts between comparable quarters in 2019 and 2020,” according to the release. 

First draw borrowers can begin applying for a PPP loan, while second draw borrowers begin applying Wednesday, Jan. 13.

“This update from the Small Business Administration is welcome news, and I encourage small business owners across our state to take advantage of these available funds,” said Alabama Gov. Kay Ivey in a statement. “Any support that we can provide our small businesses in this challenging season is critical to our overall recovery.”

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More Information on PPP loans can be found at the U.S Small Business Administration website.

Written By

John is a student contributor studying communications and French at the University of Alabama at Birmingham. You can contact him at [email protected] or via Twitter.



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