Paycheck Protection Program to open to small banks on Friday

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Some banks will be able to start taking loan applications for the second round of the Paycheck Protection Program starting Friday.

The U.S. Small Business Administration announced that small banks and credit unions with assets of less than $1 billion will be able to take loan applications at 8 a.m. on Friday.

Larger financial institutions, however, will have to wait until Tuesday, when the process will open up to everyone else.

On Monday, the second round of the program opened up to small non-bank community financial institutions.

The first Paycheck Protection Program, launched in April, was on a first-come, first-served basis, and some small businesses got shut out because they didn’t have an established bank relationship and didn’t move fast enough to get an application in before the funds ran out.

This time around, the SBA is trying to ensure the money gets to small businesses that are most in need.

“SBA has worked expeditiously to ensure our policies and systems are re-launched so that this vital small business aid helps communities hardest hit by the pandemic,” SBA Administrator Jovita Carranza said in a news release.

The program is open both to new borrowers that did not get a loan the first time around and to businesses with less than 300 employees that got a loan the first time around but saw at least a 25% reduction in gross receipts in any of the first three quarters of 2020 compared with 2019.

During the first Paycheck Protection Program, nearly 44,000 Nebraska businesses got loans totaling more than $3.4 billion.

“Our member banks are again ready to back Nebraska’s small businesses and organizations as they navigate the ongoing pandemic,” Nebraska Bankers Association President and CEO Richard Baier said in a news release.

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Based on asset sizes as of Sept. 30, all but nine banks based in Nebraska have less than $1 billion in assets, meaning they would be able to take loan applications starting Friday.

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Reach the writer at 402-473-2647 or molberding@journalstar.com.

On Twitter @LincolnBizBuzz.

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