C-Suite Wednesday — SBA Reopens PPP to Community Financial Institutions

January 13, 2021

Caity Roach

C-Suite Wednesday — SBA Reopens PPP to Community Financial Institutions

The  Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (EAA) set aside $15 billion in new PPP funding for community financial institutions (CFIs) to ensure increased access for minority, underserved, veteran, and women-owned business concerns. The SBA defines a CFI as a treasury-certified Community Development Financial Institution (CDFI), Minority Depository Institution (MDI), Certified Development Company (CDC), or a non-profit or governmental Microloan Intermediary. According to the SBA, these lenders only made up approximately 10% of all PPP participating lenders in 2020 but had the largest impact on minority and underserved communities.

When the PPP loan portal opened on Monday, it initially accepted only First Draw PPP loan applications from participating CFIs. A First Draw PPP loan is for borrowers who had yet to receive a PPP loan before the program closed in August 2020. On Wednesday, January 13, 2021, at 9:00am ET, participating CFIs may begin submitting application information to SBA for Second Draw PPP loans. A Second Draw PPP loan is for certain eligible borrowers that previously received a PPP loan, generally have 300 employees or less, and have suffered a 25% reduction in gross receipts. 

A few days after the portal opens to CFIs for Second Draw loans, additional participating lenders will be able to submit First and Second Draw PPP loan applications. Although the SBA and Treasury have not announced the exact date that the portal will open to non-CFIs, it is expected to happen sometime during the week of January 18. Additional information about systems operations, including the portal opening date for non-CFI lenders, will be announced later this week.

In preparation for the portal’s opening, it is recommended that participating lenders review all of the updated PPP forms, guidance, and resources: