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Illustration: Sarah Grillo/Axios

The next round of Paycheck Protection Program loans will open on Monday, albeit not for everyone.

Why it matters: As evidenced by this morning's bleak jobs report, many businesses continue to be battered by the surging pandemic.

Timing: The loan application window will open Monday primarily for first-draw borrowers working with a group of smaller lenders defined as community financial institutions. On Wednesday it will be expanded to second-draw applications from those same lenders, which comprise around 10% of PPP's approved lender universe.

  • No official word yet on when it opens up to the broader universe, save for a senior administration official saying it will be "shortly thereafter."
  • A different official added that, unlike last spring, "We don't anticipate the money to run out."

One big change: SBA won't instantaneously provide loan numbers to applicants. Instead, it will use an automated system to vet some of the provided information (ID verification checks, etc.), which will run on top of the E-Tran platform that was used last year.

  • The software change means many lenders will need to enter information manually, including for second-draw loans.
  • The verification process means there is likely to be an overnight lag between application and approval.

Other changes, as previously reported, includes new payroll limits (300 vs 500) and a requirement that applicants can demonstrate at least a 25% reduction in gross receipts between comparable quarters between 2019 and 2020.

One big question is how many lending institutions will participate this time around.

  • Over 5,400 participated by the end of the initial PPP, but many bankers grumbled about it being more trouble than it was worth — and the manual inputs this time could exacerbate those sentiments.
  • There's even become a secondary market for PPP loan portfolios. Chicago-based ACAP, for example, has bought up around 34,000 loans from nearly 40 banks valued at around $4.7 billion. CEO Luke LaHaie tells Axios that he expects to help originate second-draw loans for many of those clients, as their initial lenders don't plan to directly participate in 2021.

The big picture: Almost every issue of the Axios Pro Rata newsletter now includes a VC, private equity and/or M&A blurb for a company that received PPP.

The bottom line: Better late, and a little bit slower, than never.

Go deeper

Jan 28, 2021 - Podcasts

Biden's wide-ranging climate plan

Yesterday, President Joe Biden signaled a new direction for the country when it comes to climate change. He said it should be considered an essential part of foreign policy and national security.

He signed an extremely wide ranging executive order that includes a number of new measures that could kick off the battle between the White House and the oil industry.

  • Plus, Facebook’s pullback from politics.
  • And, the second round of small business loans are off to a slow start.

New York AG alleges "significant evidence" of Trump Organization fraud

Combination images of former President Trump and New York State Attorney General Letitia James. Photo: Al Drago/Bloomberg via Getty Images; Scott Heins/Getty Images

New York's attorney general filed a motion Tuesday seeking to compel former President Trump and two of his children, Donald Trump, Jr. and Ivanka Trump, to appear for sworn testimony in her office's civil investigation into the Trump Organization's financial dealings.

Why it matters: Attorney General Letitia James revealed new details in the court filing and a statement on her office's investigation into the Trump Organization's business practices, including a preliminary finding alleging the company used "fraudulent and misleading asset valuations to obtain economic benefits."

2 hours ago - Technology

Ex-N.Y. Post digital chief files lawsuit alleging sexual harassment

Richard B. Levine) (Photo by Richard Levine/Corbis via Getty Images

Former New York Post editor Michelle Gotthelf is suing her former employer, its parent company News Corp. and two editors, alleging she was reprimanded after complaining to senior executives that she was sexually harassed by retired N.Y. Post editor-in-chief Col Allan. The N.Y. Post issued a statement denying any wrongdoing.

Why it matters: "I felt that I owed it to myself and I owed it to the news organization and the people who answered to me," Gotthelf, who was a long time editor at the N.Y. Post, told Axios in an interview.