Banks to accept next round of PPP loan applications next week

MOSES LAKE — A senior manager with Banner Bank in Moses Lake said most small business owners will be able submit applications for the latest round of Paycheck Protection Program (PPP) loans as soon as next week.

“We hope to start taking applications next week,” said Melissa Klitzke, relationship manager with Banner Bank. “Everyone is patiently waiting.”

Klitzke, speaking during a webinar, jointly hosted by the Grant County Economic Development Council and the Moses Lake Chamber of Commerce on Thursday, said it’s her sense business owners are not as anxious about this third round of PPP loans as they were the first two rounds in 2020.

“We’re told it will not run out of money,” she said.

As part of the $900 billion Economic Aid Act passed in late December, Congress appropriated $284.5 billion for a third round of PPP loans. Business owners with 500 or fewer employees are eligible for first-time loans that will cover 2.5 times average monthly payroll — 3.5 times for businesses in the hospitality business, such as hotels, bars and restaurants — if they can demonstrate at least a 25% decline in revenue in 2020 from 2019.

Smaller community financial institutions — defined by the U.S. government as having $1 billion or less in assets — will get first crack at accepting PPP applications today, Jan. 15, while bigger banks will start accepting applications on Jan. 19, according to a press release from the Washington State Department of Commerce.

The loan, which is made by the U.S. Small Business Administration through private banks, will be forgiven if at least 60% is used on payroll, with the other 40% allowed to cover other essential businesses expenses like rent, mortgage payments and utilities.

However, business owners who applied for and received a PPP loan last year will be eligible to apply for a second loan so long as they have spent all of the first loan, Klitzke said. Companies seeking a second PPP loan can only have a maximum of 300 employees.

The deadline for the third round of PPP applications is March 31.

According to Cody Parish, a certified public accountant with Minneapolis-based CliftonLarsenAllen, businesses that accepted PPP loans can now also use employee retention tax credits when they file their federal taxes to offset the cost of keeping employees on payrolls during pandemic-related closures and loss of business. However, PPP and tax credits cannot be used to cover the same costs during the same time period, Parish added.

Charles H. Featherstone can be reached at cfeatherstone@columbiabasinherald.com.