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U.S. small companies to get additional cash as pandemic mortgage program re-opens By Reuters

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© Reuters. FILE PHOTO: A Chinese language restaurant and barber store in Harlem are closed,

By Michelle Worth and Pete Schroeder

WASHINGTON (Reuters) – The U.S. authorities on Monday was set to re-open its signature small enterprise pandemic help program with $284 billion in new funds and revamped guidelines that goal to get money to probably the most needy companies whereas stamping out fraud and abuse.

The Small Enterprise Administration (SBA) introduced on Friday that it will launch a 3rd spherical of the Paycheck Safety Program (PPP) this week, beginning with small neighborhood monetary establishments on Monday, and bigger lenders in coming days.

By prioritizing smaller lenders, the SBA hopes to handle criticism from lawmakers that minority and women-owned companies didn’t get sufficient cash in the course of the first two PPP rounds final 12 months in contrast with larger companies.

Administration officers informed reporters on Friday they anticipated the funds could be adequate to fulfill demand.

Below this system, lenders on behalf of the federal government distribute loans that may be forgiven offered the money is spent on eligible prices, equivalent to payroll and hire. Thus far, the PPP has distributed $525 billion via greater than 5 million loans.

Congress approved the brand new funds final month as a part of one other pandemic stimulus bundle which additionally loosened PPP guidelines on who can get money and what it may be spent on.

Among the many key adjustments, corporations which took money in the course of the first two rounds can be allowed a second PPP mortgage offered they’ll present a 25% hit to their revenues. To handle worries over fraud, the SBA can also be introducing new due diligence checks.

For extra particulars on program adjustments see FACTBOX [L1N2JJ2XB].

Whereas lenders say the adjustments are constructive, some are anxious they could trigger some preliminary snags, particularly because the up to date utility varieties and SBA rule steerage had been solely launched on Friday.

“It is all nice but it surely’s actually difficult,” mentioned Dan O’Malley, CEO of Numerated which gives PPP mortgage processing software program.

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