How Colorado's small businesses can apply for new COVID-19 relief funding through federal government, state

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Posted at 6:40 AM, Jan 12, 2021
and last updated 2021-01-12 14:21:06-05

Small businesses in Colorado can now apply for new federal Paycheck Protection Program (PPP) loans, as well as state COVID-19 relief funding.

Some banks were starting to accept PPP applications on Monday morning, and other participating lenders will start Wednesday.

This comes in the wake of Congress approving $284 billion in PPP funding as part of its latest COVID-19 relief bill. This second round of PPP loans is expected to target small businesses that were disadvantaged in the first round, which was released in the spring of 2020. They will get priority Monday and Tuesday and on Wednesday, it will open to everybody, including those who benefited from the first round.

Small businesses can apply for the loan through any existing SBA 7(a) lender, or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution, according to the Small Business Administration. To learn more and begin an application, click here.

Some business owners expressed frustration that they were unable to access the portal through their bank.

In addition, the Colorado Department of Local Affairs is providing $35.15 million in funding for small businesses, including restaurants, bars (including distilleries, wineries and breweries), caterers, movie theaters and fitness or recreational sports centers.

Several Front Range counties already have applicants available:

READ MORE: Colorado small business owners await new round of PPP loans to keep dreams alive

The Denver Metro Small Business Development Center is open and ready to help applicants, no matter if they've previously received PPP funding or are brand new to the process. To reach the center, call 303-620-8076 or email

To learn more about these and other small business funding programs, visit the Colorado Office of Economic Development and Trade website by clicking here.

Frances Padilla, the district director for the Colorado office of the Small Business Administration, said in an interview Tuesday that businesses who did not receive PPP loans in the first round would be prioritized on Monday and Tuesday and other businesses who previously received loans would be able to start applying Wednesday.

"There's actually monetary set-asides that were indicated in the economic aid law. There's $15 billion that was carved out of the top for these community financial institutions that work with smaller businesses. In our definition, that's 10 employees or less,” Padilla said.

“Then there's a second carve out of another $15 billion for a second draw of PPP. … So there's an insured pocket of money so that they can access that for first or second draw. We're talking about the smallest of the small businesses who clearly need the assistance."

Padilla said that for first-draw applicants, the maximum loan amount would be $10 million. It would be a maximum of $2 million for second-draw applicants. Loan amounts are based off a business’s average monthly payroll times a multiplying factor based on their 2019 or 2020 payroll.

The multiplier for food and accommodation services businesses will be 3.5 times their average monthly payroll, Padilla said, which could boost those businesses that have been hardest hit during the pandemic.

Businesses may use up to 40% of their loan on operational expenses, and Padilla suggested that businesses use up to 60% of their loans for payroll and payroll-related expenses.

Second-draw applicants will be allowed to have up to 300 employees but will have to prove they had a reduction of at least 25% in revenues from a quarter-to-quarter comparison of 2019 and 2020. Padilla said that was one of the new systems implemented to cut down on fraud issues seen in the first round of the PPP program.

“We all sort of learned a little bit of a lesson to be more vigilant and do more due diligence on the front end. I think that's one of the reasons we're going for a new platform on these first draws and second draws. Because that platform actually does, according to our experts, does more of a checks and balances on the front end,” Padilla said.

She said that the program rollout will hopefully go smoother this time around after what officials learned from the first rollout.

“We were all basically flying a plane while everyone was still building the engine and that was tough. It wasn't just tough on our clients and our partners to try and explain how this works. It was tough on SBA as well, because we wanted to do the right things,” Padilla said. “Obviously, like you said, you can't be perfect. But we've learned some lessons since then. And we also figured out you can't rely on the same communication channels and the same partners and expect to reach everyone that needs this information."