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Small business Paycheck Protection Program to restart next week

The next round of Paycheck Protection Program loans will open on Monday, albeit not for everyone.

Why it matters: As evidenced by this morning's bleak jobs report, many businesses continue to be battered by the surging pandemic.

Timing: The loan application window will open Monday primarily for first-draw borrowers working with a group of smaller lenders defined as community financial institutions. On Wednesday it will be expanded to second-draw applications from those same lenders, which comprise around 10% of PPP's approved lender universe.

  • No official word yet on when it opens up to the broader universe, save for a senior administration official saying it will be "shortly thereafter."
  • A different official added that, unlike last spring, "We don't anticipate the money to run out."

One big change: SBA won't instantaneously provide loan numbers to applicants. Instead, it will use an automated system to vet some of the provided information (ID verification checks, etc.), which will run on top of the E-Tran platform that was used last year.

  • The software change means many lenders will need to enter information manually, including for second-draw loans.
  • The verification process means there is likely to be an overnight lag between application and approval.

Other changes, as previously reported, includes new payroll limits (300 vs 500) and a requirement that applicants can demonstrate at least a 25% reduction in gross receipts between comparable quarters between 2019 and 2020.

One big question is how many lending institutions will participate this time around.

  • Over 5,400 participated by the end of the initial PPP, but many bankers grumbled about it being more trouble than it was worth — and the manual inputs this time could exacerbate those sentiments.
  • There's even become a secondary market for PPP loan portfolios. Chicago-based ACAP, for example, has bought up around 34,000 loans from nearly 40 banks valued at around $4.7 billion. CEO Luke LaHaie tells Axios that he expects to help originate second-draw loans for many of those clients, as their initial lenders don't plan to directly participate in 2021.

The big picture: Almost every issue of the Axios Pro Rata newsletter now includes a VC, private equity and/or M&A blurb for a company that received PPP.

The bottom line: Better late, and a little bit slower, than never.

Kellyanne Conway: "Power should be used sparingly yet strategically"

Kellyanne Conway has seen power exercised as a pollster, campaign manager and senior counselor to President Trump. Now that his term in office has concluded, she shared her thoughts with Axios.

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Pro-Trump reps continue plan to oust Cheney

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Democrats aim to punish House Republicans for Capitol riot

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Why it matters: It's unclear whether the Democrats' strategy will manifest itself in ads or earned media in the targeted races or just be a stunt to raise money for themselves. But the Capitol violence will be central to the party's messaging as it seeks to maintain its narrow majorities in Congress.

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Google's parent shuts down effort to deliver Internet via balloons

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Why it matters: The effort was one of several approaches designed to get high-speed connectivity to some of the world's remote spots and also proved useful in the aftermath of disasters that shut down traditional infrastructure.

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What has and hasn't changed as Biden takes over U.S. foreign policy

President Biden swiftly recommitted the U.S. to the Paris climate pact and the World Health Organization, but America's broader foreign policy is in a state of flux between the Trump and Biden eras.

Driving the news: One of the most striking moves from the Biden administration thus far was a show of continuity — concurring with the Trump administration's last-minute determination that China had committed "genocide" against Uyghur Muslims.

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McConnell to propose February impeachment trial

Senate Minority Leader Mitch McConnell (R-Ky.) plans to propose later today that the impeachment trial of former President Trump begin in February to allow for due process, two sources familiar with the proposal tell Axios.

Why it matters: The impeachment trial is likely to grind other Senate business to a halt, including the confirmation process for President Biden's Cabinet nominees.

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Podcast: Net neutrality on the line under Biden

Federal net neutrality rules are back on the table in the Biden administration, after being nixed by Trump, but now might be complicated by the debate over social media companies' behavior.

Axios Re:Cap digs into why net neutrality matters and what comes next with Nilay Patel, editor-in-chief of The Verge and host of the Decoder podcast.

House grants waiver for Biden's Pentagon pick Gen. Lloyd Austin

The House voted 326-78 on Thursday to grant retired Gen. Lloyd Austin a waiver to lead the Pentagon, clearing the way for the Senate to confirm President Biden's nominee for defense secretary as early as this week.

Why it matters: Austin's nomination received pushback from some lawmakers, including Democrats, who cited a law that requires officers be out of the military for at least seven years before taking the job — a statute intended to reinforce the tradition of civilian control of the Pentagon.

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