RALEIGH – Small businesses – from startups to established firms with fewer than 500 employees – are lining up for the launch of the new Paycheck Protection Program funding that becomes available at 10:30 a.m. today. And just as with the first $349 billion round the money designed to keep businesses afloat while protecting jobs the new funding is expected to be claimed very quickly.

However, some changes made for this round is expected to make more funding available to smaller ventures.

New guidelines from the US Small Business Administration and the US Treasury Department may hekp stretch out the cash. Limits on public companies could reduce or eliminate these larger firms from landing more than $900 million in the initial round. Data analytics firm Fact Squared reported over the weekend that 200-plub public firms landed $855 million in loans. Another company – Auto Nation – landed $77 million, according to CNBC.

“Last week, the Small Business Administration attempted to close that loophole, saying that big public companies ‘with substantial market value and access to capital markets’ aren’t eligible and that firms that already tapped the fund had two weeks to return the PPP money,” CNBC reported.

New guidance spells out limits for second round of PPP loans

Meanwhile, PitchBook reports that additional guidance means private equity firms will be excluded.

“After weeks of confusion, the Small Business Administration clarified last Friday that private equity firms and hedge funds are ineligible for direct access to the additional $310 billion in loans added to the Paycheck Protection Program because of the speculative nature of their investments,” PitchBook says.

Picture in NC

North Carolina’s banks are better prepared for the onslaught than the original round, says Peter Gwaltney, Chief Executive Officer of the North Carolina Bankers Association.

“[B]ankers have been ready to resume PPP loan processing since the funds ran out on April 16,” Gwaltney tells WRAL TechWire. “This gap of time since the exhaustion of the first round of funding has given bankers time to close and fund thousands of loans that were already approved and clean up pending applications and collect missing documentation, so this time has been well spent.”

Changes made for the second round may also help North Carolina banks provide more funding, he adds.

“There were no changes made to the terms of the loan program itself, from a borrower’s perspective.  There are two changes in the program that impact access to the new funding Congress approved last week,” Gwaltney explains.

“First, Congress allocated $30 billion for banks with $10-$50 billion in assets, and another $30 billion for community banks, certified community development institutions, minority-owned banks and small credit unions.  The intent of Congress in setting aside this funding was to ensure very small businesses and minority-owned businesses have access to PPP loans.

“The second change has to do with clarification in eligibility, to make certain the funding goes to small businesses that are hurting and the people they employ.”

Some 24,000 North Carolina businesses received loans averaging $244,000 in the initial funding. And demand is expected to be strong, Gwaltney says.

“We do not know how many applications were pending in North Carolina banks when the funding ran out,” he notes. “Banks will begin processing these loans Monday morning.”

Firms that have already applied don’t need to do so again, he adds.

“There is no need for a small business with an applications pending at a bank to reapply, and we’re encouraging business owners not to apply with multiple banks.”

If a firm hasn’t already applied?

“Our recommendation to small business owners is to apply with their primary bank,” Gwaltney says.

“Before calling their bank, small business owners should study the SBA eligibility guidance carefully and prepare an application. These resources can be found at SBA.gov.”