There has been several recent developments regarding state and federal funding to share with you. Today, the Small Business Administration (SBA) announced that Paycheck Protection Program (PPP) loans will begin being processed for new applicants on Monday and returning applicants on Wednesday. Also, with only a week left to apply, some questions regarding the Sector-Specific Grant Relief Program have been answered that may help you decide to apply or not. Below is an update of each program and what you can expect in the coming weeks.
There will be two types of loans in the newest iteration of the program, First Draw (new applicants) and Second Draw (returning applicants). Initially, applications will be processed through community financial institutions followed by other participating lenders shortly after. March 31 is the last day to apply.
- First Draw PPP loans open on Monday, Jan. 11. First Draw loans are reserved for businesses that have not received PPP funds previously and have 500 employees or less. Funding is capped at $10 million.
- Second Draw PPP loans open on Wednesday, Jan. 13. Second Draw Loans are for businesses that have previously received PPP funding, have 300 employees or less and can demonstrate 25 reduction in revenue from year to year in a quarter (2019 to 2020). Funding is capped at 2 million.
- Updates to the PPP include:
- PPP borrowers can set their PPP loan’s covered period to be any length between 8 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, direct 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; and
- Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.
After the initial statewide grant program was overwhelmed with applicants, an additional $668 million dollars was allocated by Governor Baker last week. This second round of funding prioritizes industries hit hardest by the pandemic including restaurants/food service, indoor recreation/entertainment/event support, gyms/fitness centers, personal services and independent retailers. This grant awards up to $75,000 to qualifying businesses. See a copy of the full grant application here. Below are a few items that have been clarified recently regarding the program.
- Planning to apply (or reapply) for PPP funds does not disqualify you from receiving funds. The grant overview and application give the appearance of these funds being available to businesses that will not be applying for the next round of PPP funding. However the Mass Growth Capital Corporation (MGCC) who manages the grant has since explained they are primarily concerned with “double dipping” (e.g. applying these grant funds to the same expense as PPP funds) and businesses should not be reluctant to apply on this basis.
- Waiting until Friday does not hurt your chances of being awarded a grant. The grant application will close on Friday, 1/15 at 11:59 PM and the review process does not begin until this time. However, there is documentation you will need to have and it may take time to assemble. This includes your 2019 tax returns, your business license, a signed W-9 form, valid photo ID of the business owner and a Certificate of Good Standing that can be requested online, but depending on your type of business, it is issued electronically or as a hard copy that is mailed or picked up in person. If you are unable to get your Certificate of Good Standing before the grant closes, it can be submitted after, but it may adversely impact your application.
- Franchises are ineligible to apply. Despite repeated request by the Stoneham Chamber, in partnership with other area chambers and members of the state legislature, to make franchises eligible to apply for this funding, the MGCC is not moving on this point. We will continue to push for inclusion, but at this time, franchises remain ineligible.
Please feel free to contact the Chamber office with any questions you may have by emailing firstname.lastname@example.org calling (781) 438-0001.