Cedar Rapids bank says it’s receiving fewer PPP applications for second round than in spring
CEDAR RAPIDS, Iowa (KCRG) - The federal government allocated nearly $300 billion for a second round of Paycheck Protection Program funding in the December coronavirus stimulus package, an inclusion requested by small business owners, nonprofits, and lawmakers after a high demand for the first round of money nationwide.
But a Cedar Rapids bank said it’s seeing less of a demand for PPP loans this round, with the application process open from Jan. 13 through March 31.
“It’s still very strong,” Chris Mueller, a business banker with Ohnward Bank & Trust. “If we processed — I’m just making numbers up — but if we processed 100 in round one, you’re probably processing 50, 60% of what you did the first round.”
Companies and nonprofits that did not receive a previous loan through the Paycheck Protection Program can receive up to $10 million, so long as they have 500 or fewer employees and have been in operations since Feb. 15, 2020.
However, businesses that have previously received a PPP loan can receive a maximum of $2 million this time and must qualify through tighter restrictions: They can only have up to 300 employees and must demonstrate a 25% loss in revenue between one quarter in 2019 and the same quarter in 2020.
“That qualification has eliminated some of the businesses from applying,” Mueller said.
Mueller said businesses that qualify should have a good chance at receiving a loan, which can be forgiven if the business meets certain requirements, such as allocating at least 60% of the money to payroll costs.
“Talking to your banker will help you navigate some of that,” he said. “It’s not a hard process, but there’s a lot of information out there, and so that might help make the process a little bit easier.”
He also encouraged companies and nonprofits to start that process now and not wait.
NewBo City Market, a nonprofit organization in Cedar Rapids, already has its application in.
“This second round of PPP feels so much easier than it did the first round,” Executive Director Scott Kruger said. “Maybe because we’re not as freaked out about a huge pandemic; maybe because we’ve gone through it the first time.”
Kruger says the first round of the Paycheck Protection Program was a lifeline for them.
“That really helped us get through, not just the bar and event shutdowns, but then all of the shutdowns that came from the governor’s office,” he said, adding the loan also helped the market offset costs from rent relief it offered its tenants.
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