Ohio businesses can start applying for the second round of coronavirus loans, part of the $900 billion stimulus plan approved by Congress last month.
The goal this time is to provide aid to businesses owned by women, minorities, veterans and other under-served communities.
Of the $900 billion, $284 billion is committed to a new round of forgivable Paycheck Protection Program loans being administered by the Small Business Administration.
Like the previous PPP loans, the money is meant to be used to cover payroll and other expenses for up to five months.
The new round of funding is meant to help businesses continue to manage through the pandemic, said Megan Sellheim of SBC Small Business Advising in Columbus.
“A lot of businesses have taken steps to adapt by cutting expenses or reducing their team or they’re stepping in as owners and doing more work themselves,” she said. “But that can take businesses only so far. Not every business can pivot to something else and replace all that revenue.”
Sellheim said businesses interested in a loan should reach out to their bank or, if they got a loan in the first round, go back 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 Economic & Community Development Institute, also can help.
This round of funding expands the pool of eligible businesses to include the self-employed and others that didn’t 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 the central Ohio band Twenty One Pilots) received forgivable loans. Some companies returned them.
Businesses that have received a loan already are eligible for a second loan as long as they have no more than 300 employees and can 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 served as an economic lifeline to millions of small businesses and their employees when they needed it most,” Jovita Carranza, administrator of the Small Business Administration, said in a statement.
Beyond payroll, loans can be used to cover expenses for operations, property damage, costs for suppliers and worker protection.
The first round of PPP loans helped support 51 million workers with more than 70% of the loans going to businesses with fewer than 10 employees, according to the SBA. The average loan size was $101,000.
This article originally appeared on The Columbus Dispatch: Businesses can start applying for round 2 of pandemic business loans