July 6th, 2020
The Paycheck Protection Program Extended
Small Businesses who haven’t applied for forgivable loans to ease the pain of the COVID-19 pandemic now have a second chance. President Trump signed legislation on Saturday extending the deadline to apply for the Paycheck Protection Program (PPP) through August 8.
The program was enacted to assist small businesses sustain the COVID-19 crisis with the original deadline of June 30. According to the Wall Street Journal, the original $350 billion in funding was depleted within two weeks. As they continued to allocate additional funds to the program, the demand diminished. Now, approximately $130 billion of the $670 billion remains in its reserves.
The newly signed legislation includes amendments to the program rules in order to make loan forgiveness easier to secure. Small businesses now have 24 weeks, rather than eight, to use the PPP funds. In addition, they have decreased the percentage of the loan that must be used on payroll from 75 percent to 60 percent. Lastly, the administration relaxed restrictions for owners with criminal records.
Many owners are inquiring what happens if they received a PPP loan, however they returned the money due to their business being closed during that time period. Currently, Treasury is reporting that they are unable to apply again, as they are considering the loan being paid off. According to the U.S. Government Accountability Office, more than 170,000 loans were cancelled, as businesses felt they were unable to meet the original requirements.
According to its sponsors, the program needed to be repurposed to better serve the challenges businesses are currently facing. The PPP program has assisted around 5 million businesses across the country and they hope to continue to assist those impacted by the global pandemic.