- Opening week of Paycheck Protection program sees approval of 60,000 forgivable loans totaling over $5 billion
- Initial applications were limited to community financial institutions
- Program has $284.5 billion available and will be open until March 31 or until funds are exhausted
Approximately 60,000 Paycheck Protection Program loans have been approved in the first week of the newly revived program, according to the U.S. Small Business Administration. Close to 3,000 lenders took part in the initial launch between Jan. 11 and Jan. 17, with more than $5 billion in forgivable loans approved.
As part of a $900 billion stimulus package approved last month, $284.5 billion in new funding is allocated for PPP. While eligibility for the program has been extended to include some new borrowers, funding has also been further restricted to focus on small businesses and those that have been particularly hard-hit by the COVID-19 pandemic.
The SBA began receiving applications on Jan. 11, but the initial period was limited to community financial institutions that assist underserved groups like minority-, women-, and veteran-owned businesses. One criticism of the program that emerged in recent weeks was the revelation that minority-owned businesses often experienced months-long delays before they were approved for PPP loans.
The program opened to smaller lenders on Jan. 15 and to all lenders on Jan. 19. The average loan size during the opening week was under $20,000 for first-time borrowers and under $75,000 for repeat borrowers.
Borrowers can receive first draw loans of up to $10 million if they did not receive a loan before the previous PPP application period ended on Aug. 8 and if they meet other requirements, including a workforce of 500 or fewer employees. Second draw borrowers, who previously received a PPP loan, can qualify for up to $2 million if they have 300 or fewer employees and can demonstrate an annual revenue loss of at least 25 percent during any quarter in 2020.
PPP applications will be received until March 31 or until funding is exhausted.
