Paycheck Protection Program to reopen Monday
The Paycheck Protection Program will be reopening Monday, bringing new financial hope for businesses hit hard by the pandemic.
The Small Business Administration and the Treasury Department say new borrowers and some existing borrowers will be eligible. Officials also say there are safeguards in place for this round of loans to make sure the money goes to where it's needed most.
The new round of funding includes $284 billion for things like job protection and operating costs.
According to federal officials, the program will be targeted at small businesses and nonprofits, with a special emphasis on low-income and minority-owned businesses.
That's after the first round of payments drew sharp criticism because some large corporations, which had existing relationships with banks, took out massive loans while some family-owned businesses were shut out.
Economic analyst Martin Cantor says the second PPP will give the economy a much needed lifeline so it can stay afloat until pandemic restrictions loosen.
To be eligible for a first-time loan through the program, a business can have no more than 500 employees. For second time loans, the maximum is 300 workers.
That business would also have to show that revenue dropped by 25% compared to 2019.
The maximum amount that can be borrowed this time around will be $2 million. It will last through March 31.
The loans will have five-year terms and carry an interest rate of 1%.
The Associated Press contributed to this story.