If you missed the opportunity to apply for a Paycheck Protection Program (PPP) loan – you now have another chance! The Paycheck Protection Program has been extended, allowing you more time to file. Congress overwhelmingly voted to extend the application period for a PPP loan through August 8, 2020. This gives folks an additional 5½ weeks to apply.
What is the PPP?
Congress created the PPP as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). They authorized the use of the SBA’s small business lending program to provide forgivable loans of up to $10 million per qualifying business. The loans support small businesses in dealing with the economic hardships created by the coronavirus pandemic. Primarily, these loans assist small businesses with continuing to pay employee salaries.
Small businesses are those with 500 or fewer employees including those filing Schedule Cs. This would include:
- self-employed
- sole proprietorships
- independent contractors
- non-profits
- veterans’ organizations.
Paycheck Protection Program has been Extended But Are They Forgivable, or not?
The loans can be forgivable. However, to be forgiven, funds must be used to pay for certain expenses. This includes expenses like payroll, rent, lease payments, mortgage interest, and utilities. Also, expenses must have taken place during the 24-week period following the loan being funded, or by December 31, 2020, if earlier.
To qualify for full forgiveness, a borrower must use the loan proceeds for eligible expenses and meet certain other criteria. However, forgiveness may reduced for other reasons like:
- an employer does not maintain their employee head count.
- the employer reduces the pay per employee.
Loans are doled out on a first-come, first-serve basis, but there is approximately $130 billion still in this fund. While the Paycheck Protection Program has been extended, you still need to act quickly. For more information or assistance or to determine if your business qualifies for a PPP loan, please give the office a call at (360) 778-2901. We can help you sort out the details, and give you the support you need.
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