Second round of PPP funding open to struggling businesses

WILLSBORO | Businesses that have been hurt by the Covid-19 pandemic and received help through the federal CARES Act are now eligible for a second draw of Paycheck Protection Program funding, a loan that can be converted into a grant if most of the money is used to maintain payroll and compensation levels. Steven Cacchio, President and CEO of Champlain National Bank, said the federal Small Business Administration and local lending institutions are trying to notify small businesses that more money is out there, particularly as some may not be aware that another round is available. The pot of funding is not unlimited, and businesses need to apply before it runs out. "We're encouraging people to get their applications in as soon as they can," Cacchio said. The deadline for submitting an application is March 31. Cacchio said the economic situation may not be as dire as it was in the midst of the commercial shutdown last summer, but the region has a way to go to return to pre-pandemic levels. "It's still a challenge — certain sectors continue to feel it, like restaurants and hospitality," Cacchio said. According to the SBA, The Paycheck Protection Program allows most eligible borrowers that previously received a PPP loan to apply for a second draw with the same general loan terms as their first draw. The eligibility requirements for the second draw are a bit different from the first, notably that the business can have a maximum of 300 employees (down from 500) and it must demonstrate a quarterly loss of 25% in gross returns in 2020 from 2019. According to the SBA, for most borrowers, the maximum loan amount of a Second Draw PPP loan is 2.5 times average monthly 2019 or 2020 payroll costs up to $2 million. For borrowers in the Accommodation and Food Services sector, the maximum is 3.5 times average monthly payroll costs up to $2 million. Second Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, transportation and worker protection costs related to COVID-19. To be eligible for loan forgiveness though, 60% of the funding must go to payroll. The business must also keep their employees on the job and cannot reduce their pay. Cacchio said Champlain National Bank processed 250 loans under the first draw, and is approaching 200 loans for the second. "There's still so much uncertainty about what the future will bring, but there's more optimism now with the vaccine that there's a light at the end of the tunnel," he said.

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Second round of PPP funding open to struggling businesses

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