The COVID-19 crisis has changed the dynamics of many policies and operations on a global scale. Many businesses have had to make extremely tough emergency decisions with normal operations and employment. Since the outbreak, companies have had to act quickly to combat business in affected communities. Here are a few major business policy changes.
– Round 2 of the SBA’s Paycheck Protection Program (PPP) opened on Monday, Jan 11, 2021.
– For the first week of PPP2, the program will only be available to small businesses applying at community financial institutions (CFIs). CFI’s include: Community Development Financial Institutions (CDFIs), Minority Depository Institutions, Certified Development Companies, and microloan intermediaries.
– The SBA and the U.S. Treasury Department, plan to open the program to all small businesses soon. The estimated date is likely to be sometime during the week beginning Jan. 18.
– The Economic Aid Act, which is part of an overall COVID economic stimulus package, was passed at the end of December and provides for a $284 billion pool of money to help struggling businesses survive during the pandemic.
– Eligible companies include companies that previously received a PPP loan during the first round of lending, as well as those applying for the first time.
– PPP2 includes changes to strengthen true small businesses, rather than larger ones that have access to capital markets.
– According to SBA, here’s who can apply:
- Any small business that meets SBA’s size standards (either the industry based sized standard or the alternative size standard)
- Sole proprietors, independent contractors, and self-employed persons
- Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location
- Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of: 500 employees, or that meets the SBA industry size standard if more than 500
- Importantly, businesses that did not receive a PPP loan in the first round will have first access to the loans. Also, the businesses will have to show a 25% drop in revenue from any 2020 quarter to any 2019 quarter.
– To prepare for the loan process, take a look at the application here.