SBA has announced that the PPP will re-open the week of January 11 for new borrowers and certain existing PPP borrowers. To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Mon., Jan. 11 and Second Draw PPP Loans on Wed., Jan. 13. The definition of community financial institutions can be found below.
The PPP will open to all participating lenders shortly thereafter. Updated PPP guidance outlining Program changes to enhance its effectiveness and accessibility was released on Jan. 6 in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act.
Read the SBA announcement here.
New PPP FAQs to Reflect Changes Made by Economic Aid Act
A new series of frequently asked questions (FAQs) has been created to address revisions to SBA’s PPP as made by the Economic Aid Act. The information is in addition to the recap previously released in the WBA Omnibus Law Summary. Any item updated or revised by the Economic Aid Act has been highlighted.
WBA will continue to update the FAQ document, as necessary. A separate FAQ document to address SBA’s PPP Second Draw Loans interim rule is currently in the works and will be made available as soon as possible.
Read the FAQ.
Heather MacKinnon, WBA VP - Legal, contributed to the contents of this article.
New DOL Guidance Regarding FFCRA
As previously mentioned in last week’s release of the WBA Omnibus Law Summary, WBA stated it would share any guidance issued by the Department of Labor (DOL) regarding paid sick leave and expanded family and medical leave under FFCRA. DOL has since issued guidance. The guidance comes in the form of new FAQs added to DOL’s existing FFCRA guidance. The two questions (#104 and 105) may be found at the end of the listing, designated by a 12/31/2020, date.
The questions outline that an employer is no longer required to provide FFCRA leave after December 31, 2020, but that the coverage is now voluntarily until March 31, 2021. The FAQs also confirm employers are still responsible for FFCRA leave that occurred prior to December 30, 2020. Lastly, the guidance also provides a link to an IRS website if employers have questions about claiming the refundable tax credit for qualified FFCRA wages. The DOL guidance may be viewed here.
PPP Definition of Community Financial Institution
While the phrase "community financial institutions" may be familiar due to your bank’s relationship with the Federal Home Loan Banks, this phrase is used uniquely in connection with the new law. Per the Economic Aid Act, a Community Financial Institution (CFI) is one of the four types of lenders:
- Community Development Financial Institution (CDFI)
- Minority Depository Institution (MDI)
- Community Development Corporation (CDC)
- Microlender Intermediary
The source for this definition is 15 USC 636 (xi). Unfortunately, it does not include banks regardless of size unless a bank is also a CDFI or MDI.
WBA understands the portal will likely open for all banks the week of January 18. There is no public confirmation of this yet; however, WBA is encouraging its members to be prepared for the likely broader opening of the portal that week.