On Monday, the government would reopen its $ 284 billion retail pandemic signature program on new funds and improve rules aimed at getting cash to the most needy businesses while eliminating fraud and abuse.
The Small Business Administration announced on Friday that it will launch a third round of the Paycheck Protection Program this week, which begins Monday with financial institutions for small communities and larger borrowers in the coming days.
By prioritizing smaller lenders, the SBA hopes to address criticism from lawmakers that minority and women-owned businesses did not receive enough money during the first two EMP rounds last year compared to larger businesses.
Administration officials told reporters on Friday that they expected the funds would be sufficient to meet demand.
Under the program, lenders distribute loans on behalf of the government that can be forgiven provided the cash is spent on qualifying costs, such as payroll and rent. To date, the PPP has distributed $ 525 billion through more than 5 million loans.
Congress approved the new funds last month as part of another pandemic stimulus package, which also relaxed PPP rules on who can get cash and what it can be spent on.
Among the most important changes, companies that took cash during the first two rounds will be allowed a second PPP loan, provided they can achieve their income by 25 percent. To address fraud concerns, the SBA is also conducting new investigations.
While lenders say the changes are positive, some are worried they could cause initial problems, especially since the updated application forms and SBA rule were only released on Friday.