The deadline to apply for a Paycheck Protection Program (PPP) loan has been extended through August 8, 2020 to allow small business owners impacted by the coronavirus outbreak to access this financial relief provision.
Read on to learn more about the Paycheck Protection Program, from its goals to the most recent modifications that have increased the flexibility of the original requirements for forgiveness.
What Is the Paycheck Protection Program?
The PPP is a measure of financial relief whose aim is to help small business owners affected by the COVID-19 outbreak. This program was established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and is implemented by the Small Business Administration (SBA).
Who Can Apply for a PPP Loan?
Any business with 500 employees or fewer qualifies to apply for a PPP Loan. Still, your business may qualify for a loan even if it has more than 500 employees as long as it meets certain criteria that vary depending on your industry. You can use this online tool to determine if your business is considered small by SBA standards. However, note that the program does not apply only to traditional businesses; independent contractors, freelancers, and sole proprietors can also apply for a PPP loan.
What Are the Rules for Forgiveness?
The Paycheck Protection Program Flexibility Act (PPPF), signed into law at the beginning of June, introduces changes that smooth the way for borrowers to get their PPP loans forgiven. For example, some of the most relevant changes include:
- The amount of the loan that owners must spend on payroll is not 60% (previously it was 75%). You can use the rest to pay for utilities, rent and interest on mortgages.
- Borrowers now have 24 weeks,or until December 31, 2020, to use their PPP Loans (before the PPPF they had eight weeks)
- The repayment term is now five years (from the previous two years)
- Extends deadline to rehire workers to December 31, 2020 (the original date was June 30, 2020)
More Coronavirus Resources for Business Owners
We have covered extensively the impact of the coronavirus outbreak on the world of business. These are some posts you may find interesting to learn more about how to operate your organization and guide your team under the current circumstances.
At the Pomona Chamber of Commerce our mission is keeping you up to date with the most relevant developments in business management and administration so you and your company can take advantage of new opportunities. Contact us today by email (email@example.com) telephone (909-622-1256), social media or click on this link to join and start enjoying the benefits of membership today.