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2 min read
Paycheck Protection Program Deadline Approaching
The June 30, 2020 deadline for businesses to apply for the Paycheck Protection Program (PPP) is fast approaching. As most small and mid sized business owners are aware, the program has been a lifeline for some while a puzzle to others. Confusion over the initial requirements and a flawed roll-out of the application process from traditional banks added to the confusion. However, the program has provided over $512.27 billion as of June 12, 2020 for 4.58 million businesses.
There was also revisions to the program made on June 5th under the Paycheck Protection Program Flexibility Act. This extended the period in which the loan proceeds had to be paid back from 8 to 24 weeks. The flexibility act also expanded the portion of the funds that can be used for essential but non-payroll expenses from 25% to 40%.
Clarification over the Flexibility Act
- The maturity date for loans made after June 5th, is extended from two years to five years. The maturity date can also be extended for loans made before June 5th, if the borrower and lender mutually agree.
- The period that the loan forgiveness covers has been extended from 8 weeks to 24 weeks. Borrowers that have loans taken prior to June 5th are able to use the funds during the initial 8 week period or choose to extend it to the full 24 weeks.
- The Flexibility Act decreased the percent of the funds that need to be used for payroll in order to obtain forgiveness. This has been reduced from 75% to 60%. The remaining 40% of the forgivable funds can be used for other expenses such as taxes, inventory, overhead and so on.
- The date to replace full-time equivalent employees (FTEs) and restore salaries has been extended from June 30, 2020 until December 31, 2020. This gives small businesses that have not been able to return to “business as usual” or are in areas that have significant commercial and personal restrictions time to get up and running again with the need for full staff.
For more information on how SBG Funding can help your business during these unprecedented times, visit our website to learn about the Paycheck Protection Program (PPP) or click here to apply now.
