MACON, Ga. — Early in the pandemic, the country saw businesses rush to apply for loans through the Paycheck Protection Program (PPP).
The applications for the first round ended in August of last year, but now, the Small Business Administration (SBA) is offering businesses a chance to apply again.
SBA began accepting applications in January for the second round.
Robin Clark, the director of specialty lending at Planters First Bank, says they're not seeing as much of the "mad rush" during the second round as what they saw during the first distribution of the Paycheck Protection Program, but she says there's still a demand.
Speaking to business owners in Central Georgia, they say they are certainly are seeing the positive impacts of the second draw.
It's almost been a year since Travis Jean Emporium owner Scott Mitchell closed his business for two-and-a-half months while much of the country was on lockdown. In that time, Mitchell says he applied for his first PPP loan of under $10,000.
"I was denied probably something like 16, 17 times just because banks didn't know how to do it. The direction was coming down in chunks and buckets, and it was not easily navigable," Mitchell said.
Mitchell says he finally received his first draw in April of last year. Fast forward to January of this year, Travis Jean Emporium is back open, and sales were steadily returning to what it was before the pandemic, but Mitchell says he was still uncertain.
"Numbers were going up. People weren't really getting vaccinated," Mitchell said.
So he applied for the business' second PPP loan -- also under $10,000.
"It was a lot easier," Mitchell said.
Clark says this time, the Small Business Administration has streamlined the application process and has different eligibility criteria for the second draw.
Clark says the three requirements for the second draw include:
- The business must have spent their past loan in full by the time they obtain their second loan.
- The business must also have no more than 300 employees.
- The business must show a 25 percent revenue reduction in gross receipts between comparable quarters in 2019 and 2020.
During the first round of loans, businesses were more limited on what they could spend their loan on--like payroll and rent. Clark says this time, businesses have more freedom, like spending that money on software costs or PPE.
Clark says certain industries severely affected by the pandemic, like restaurants and hotels, have the ability to receive a higher amount during the second draw than their first draw last year.
She says businesses or individuals who filed their tax returns as Schedule C (sole proprietors) or Schedule F (farmers) have more flexibility to earn a larger loan amount.
The first draw is still capped at $10 million, the same as last year. However, $2 million is the cap for the second draw. Businesses who did not apply or did not receive a PPP loan last year can still apply for their first draw during this round of PPP loans.
Clark says there's fewer businesses applying this round compared to last year, at least for Planters First Bank.
During the first round of loans, Planters First Bank processed 278 loans, totaling over $33 million. So far, during the 2021 program, they've received over 160 applications, totaling over $10 million.
Mitchell says both PPP loans have helped him to open his doors again and keep them open.
"For the small businesses that have 1, 2, 3 employees, they were in desperate need of that funding. We would not be here today if it wouldn't be for the help of the federal government," Mitchell said.
The Paycheck Protection Program is scheduled to end on March 31; however, lawmakers are considering extending that to May 31st.