Federal small-business coronavirus relief loan period opens Jan. 11, while California grant deadline is now Jan. 13

Start your pencils.

North Bay businesses may again tap into Paycheck Protection Program loans as early as next week, the U.S. Small Business Administration announced Friday.

As part of the $2.3 trillion federal relief package signed into law last month that also includes $110 billion in tax benefits, the $284 billion lending mechanism represents the second wave of PPP loans available to companies trying to survive amid the COVID-19 economic upheaval.

For companies that passed on the first round of funding, they may apply starting Jan. 11, if their lending institutions meet certain qualifications. Two days later, businesses that received first-round funding and would like to re-apply for another may do so through their financial institutions.

First in line: CDFIs

The first group of loans may be submitted through “community financial institutions” on that Monday, according to the SBA. These are defined as community development financial institutions, which are designed to promote economic vitality in distressed communities. CDFIs, which use SBA form 3507, receive a designation from the federal government that enables small businesses in low-income and minority-based communities to gain access to capital.

The process runs through March 31.

“The PPP will open to all participating lenders shortly thereafter,” the SBA reported.

“We’ll be up and running sometime next week,” Exchange Bank Chief Credit Officer Michael Sullivan said of his Santa Rosa bank’s preparedness.

Its customers will apply through a portal that will be ready next week. Like the process in the first round of funding more than six months ago, communications and document sharing will be handled electronically.

“As soon as it’s open, we’ll announce it on our website,” Sullivan said.

The bank processed more than 1,700 loans for North Bay businesses in the first round. Over three-quarters of these loans were classified in worth as under $150,000.

Bank of Marin also reported it had handled more than 1,800 around the San Francisco Bay Area. The bank’s Chief Operating Officer Tim Myers is awaiting “the required application forms” and “necessary guidance.”

What’s different this time with PPP loans

Key differences this time around include an allowance for the business to receive forgiveness on the loan and take the expense as a write off — a corporate maneuver the Internal Revenue Service eliminated during the first wave of loan funding. The IRS called it “double dipping.”

Another change involves 501(c)(6) organizations to apply for loans.

For requirements, borrowers with fewer than 300 employees may be eligible for second draws of PPP funding if they met the criteria from the first.

SBA Administrator Jovita Carranza, along with U.S. Treasury Secretary Steve Mnuchin, has referred to the program as an “economic lifeline to millions of small businesses.” The program’s intent was to provide funding for businesses to keep at least three quarters of its staffing levels.

The PPP funding program has provided 5.2 million loans valued at $525 billion to save 51 million jobs at U.S. businesses, the SBA added.

Susan Wood covers law, cannabis, production, agriculture and transportation as well as banking and finance. For 25 years, Susan has worked for a variety of publications including the North County Times in San Diego County, Tahoe Daily Tribune and Lake Tahoe News. She graduated from Fullerton College. Reach her at 530-545-8662 or susan.wood@busjrnl.com.

Susan Wood covers law, cannabis, production, agriculture and transportation as well as banking and finance. For 25 years, Susan has worked for a variety of publications including the North County Times in San Diego County, Tahoe Daily Tribune and Lake Tahoe News. She graduated from Fullerton College. Reach her at 530-545-8662 or susan.wood@busjrnl.com.