More federal relief for small businesses
Ohio businesses can begin applying for the second round of coronavirus loans, as part of the $ 900 billion stimulus package approved by Congress last month.
The goal this time around is to provide assistance to businesses owned by women, minorities, veterans and other underserved communities.
Of the $ 900 billion, $ 284 billion is committed to a new round of Paycheck Protection Program repayable loans administered by the Small Business Administration.
Like previous PPP loans, the money is intended to be used to cover payroll and other expenses for up to five months.
The new round of funding is intended to help businesses continue to manage the pandemic, said Megan Sellheim of SBC Small Business Advising in Columbus.
“Many companies have taken steps to adapt by cutting expenses or downsizing their team, or they step in as owners and do more of the work themselves,” she said. “But that can only take businesses so far. Not every business can move on and replace all of that income.”
Sellheim said businesses interested in a loan should contact their bank or, if they got a loan in the first round, return to the bank that previously helped them. If their bank can’t help with the PPP loans, the bank can probably refer the business to a bank that can, she said.
Community financial institutions, including the Ohio-based Community and Economic Development Institute, can also help.
This round of funding expands the pool of eligible businesses to include self-employed workers and others who did not qualify in the first round, she said.
The expansion of the loan program comes after the program received some criticism in the first round because affluent people, professional teams and musicians (including central Ohio Twenty One Pilots) has received forgivable loans. Some companies fired them.
Businesses that have already received a loan are eligible for a second loan as long as they have no more than 300 employees and may show a 25% drop in revenue between comparable quarters in 2019 and 2020.
First-time borrowers can draw up to $ 10 million; second-time borrowers are capped at $ 2 million.
“The historically successful Paycheck Protection Program has served as an economic lifeline for millions of small businesses and their employees when they need it most,” said Jovita Carranza, Administrator of the Small Business Administration, in a statement.
Beyond payroll, loans can be used to cover operating expenses, property damage, supplier costs, and worker protection.
The first round of PPP loans supported 51 million workers, with more than 70% of loans going to companies with less than 10 employees, according to the SBA. The average loan amount was $ 101,000.