Emergency loan program's second round to begin on Monday
The Paycheck Protection Protection program will start accepting applications Monday morning.
The portal will reopen at 10:30 am, SBA Administrator Jovita Carranza and Treasury Secretary Steven Mnuchin said Friday in a press release.
“We encourage all approved lenders to process loan applications previously submitted by eligible borrowers and disburse funds expeditiously, they said.
That outcome was likely to happen without any official encouragement.
Bankers around the country have been preparing applications since the program ran out of money on April 16. Many believe the newly appropriated money, totaling $310 billion, will be exhausted much quicker than the initial $349 billion, with some predicting the funds could run out within 48 hours.
The Paycheck Protection Program offers two-year loans of up to $10 million to businesses with 500 or fewer employees. Funds spent on employee salaries and other basic operating expenses can be converted to grants, with interest on any remaining funds capped at 1%.
The program’s initial round of funding was included in the $2.2 trillion coronavirus stimulus package enacted on March 27. The SBA, which is running the effort through its 7(a) loan guarantee program, approved nearly 1.7 million loans totaling $343 billion during the first round. The remaining monies covered fees paid to the nearly 5,000 lenders that participated.
Like regular 7(a) loans, Paycheck Protection credits are originated and funded by private-sector lenders and backed by the SBA. The average loan size was $206,000, with $58.3 billion tied to loans of $150,000 or less, the SBA said.
Congress earmarked $60 billion of the new funds for institutions with assets of $50 billion or less in assets, including $30 billion for lenders with assets of $10 billion or less.