WASHINGTON (BRAIN) — The Paycheck Protection Program will resume offering loans to new and some existing borrowers on Jan. 11.
Initially, only community financial institutions will be able to issue first-draw loans on Jan. 11, and second-draw loans on Jan. 13. PPP funds will open to all participating lenders shortly afterward.
While some retailers and suppliers benefitted from the bike boom last year, others suffered from lack of inventory and increased costs. And other types of bicycle-related businesses, including coaching, bike-fitting, indoor cycling studios, events, tours, nonprofits and media, have not enjoyed the fruits of the boom.
This round of COVID-19 pandemic funding authorized up to $284 billion toward job retention and certain other expenses through March 31, and by allowing certain existing borrowers to apply for another loan.
Updated PPP guidance outlining program changes was released on Jan. 6 in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act.
The $900 billion relief package was officially approved on Dec. 27. PeopleForBikes, which has been offering industry loan resources since the pandemic began in the spring, said retailers should contact their lenders with questions and prepare financial materials for when the application period opens.
PPP updates include:
- Borrowers can set their loan's covered period to be any length between eight and 24 weeks to best meet their business needs.
- Loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures.
- The program's eligibility is expanded to include 501(c)(6)s, housing cooperatives, direct marketing organizations, among other types of organizations.
- The loan provides greater flexibility for seasonal employees.
- Certain existing borrowers can request to modify their first-draw loan amount.
A borrower is generally eligible for a second PPP loan if:
- Will or has used the full amount of the first loan only for authorized uses.
- Has no more than 300 employees.
- Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
More than 1,900 bike-related businesses — retailers, distributors, manufacturers, nonprofits, tour and race companies and more — received loans during the first phase totaling $134.7 million. The loans, which are forgiven if spent primarily on payroll, were intended to protect more than 17,000 jobs in the bike industry.
New guidance links
