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New York small businesses seeking PPP loans, like these on Jamaica Avenue in Woodhaven, are encouraged to contact a representative from the New York Small Business Development Center. There are over 22 campus-based centers and outreach offices across New York to assist clients with the loan application.
By Forum Staff
U.S. Rep. Grace Meng (D-Flushing) announced on Monday the reopening of the Small Business Administration’s Paycheck Protection Program which provides forgivable loans to small businesses that have suffered economic losses due to the COVID-19 pandemic.
The initiative, which was closed on Aug. 8, 2020, despite more than $130 billion remaining in the program, was reopened under the $900 billion coronavirus relief package—which became law on Dec. 27, 2020. The new law includes a total of $284 billion for small businesses.
To qualify for a second round of funding, borrowers must:
Employ 300 or fewer employees;
Have used or will use the full amount of their first PPP loan; and
Demonstrate at least a 25-percent reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter.
First-time borrowers must employ 500 workers or less. The program opened to first-time borrowers on Monday, Jan. 11. For second round applicants, it began on Wednesday, Jan. 13. Community lenders are first to participate in the program with other lenders to follow soon.
To qualify for loan forgiveness, 60-percent of the loan must be used for payroll expenses and the remaining 40 percent can be used for nonpayroll expenses such as rent, mortgage, or utility payments. Eligible expenses have been expanded to include personal protective equipment and supplier costs that are essential to business operations.
This new round of PPP loans also makes other entities such as non-profit organizations and housing cooperatives newly eligible for funding.
“Many small businesses, nonprofits, housing cooperatives, and restaurants are fighting for their survival and now they can apply for critical financial relief through this new round of the Paycheck Protection Program,” said Meng. “Small businesses and other eligible entities continue to face an uncertain future, and need help in weathering this national health pandemic. I will continue to fight for additional relief, especially for restaurants which have been especially hard hit through no fault of their own. I look forward to working with the incoming Biden Administration to help Queens and New York businesses and nonprofits struggling during COVID-19.”
In March 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act created the PPP. In late May 2020, the Paycheck Protection Program Flexibility Act became law and made improvements to the program to:
Allow loan forgiveness for expenses beyond the eight-week covered period to 24 weeks, and extending the rehiring deadline;
Increase the limitation on nonpayroll expenses (rent, utility payments and mortgage interest) for loan forgiveness from 25 to 40 percent;
Extend loan terms from two to five years; and
Ensure full access to payroll tax deferment for businesses that take PPP loans.
The deadline to apply for the new round of PPP is March 31, 2021, or until funds run out.
New York small businesses seeking PPP loans are encouraged to contact a representative from the New York Small Business Development Center. There are over 22 campus-based centers and outreach offices across New York to assist clients with the loan application. For businesses located in Queens, please email the Queens College SBDC at sbdc@qc.cuny.edu, LaGuardia Community College SBDC at sbdc@lagcc.cuny.edu, or York College SBDC at sbdc@york.cuny.edu for assistance.
