On July 4, 2020, President Trump signed into law a bill extending the deadline for eligible small businesses to apply for federally guaranteed low-interest forgivable loans under the Paycheck Protection Program (PPP) until August 8, 2020.
The U.S. Small Business Administration (SBA), which oversees the program with the Treasury Department, stopped accepting loan applications at midnight on Tuesday, June 30, the original PPP loan application deadline, with nearly $130 billion remaining PPP-earmarked funds.
What is the Paycheck Protection Program?
Congress enacted the PPP as part of the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, as amended by the Paycheck Protection Program Flexibility Act of 2020 (PPPFA). The legislation authorized the Treasury to use the SBA’s 7(a) small business lending program to fund forgivable loans of up to $10 million that qualifying businesses could spend to maintain payroll, mortgage interest, rent, and utilities during a period of up to 24 weeks.
PPP loans are available to small businesses that were in operation on February 15, 2020 with 500 or fewer employees, including not-for-profits, veterans’ organizations, Tribal concerns, self-employed individuals, sole proprietorships, and independent contractors. Businesses with more than 500 employees in specified industries may also have the opportunity to apply, subject to meeting SBA alternative size requirements.
Congress designed the loans to support organizations facing economic hardships stemming from the coronavirus pandemic and assist them in continuing to pay employee salaries. PPP loan borrowers may qualify for full loan forgiveness if they used the funds for eligible expenses and satisfy additional criteria. Borrowers may see a reduction in their loan forgiveness amount based on the percentage of costs attributed to nonpayroll costs and decreases in employee headcount or salaries or wages per employee compared to levels as of February 15, 2020.
How can Squar Milner help?
Since the launch of the Paycheck Protection Program in April, we have committed ourselves to working with our clients and business partners to navigate the ever-evolving PPP and optimize loan forgiveness.
Beyond our work with borrowers, we have established services for PPP lenders to help review loan forgiveness applications. We have developed experience and expertise working with various PPP borrowers and lenders and offer an extensive line of PPP services.
For more information about the Paycheck Protection Program, please review our PPP webinars, the PPP FAQ, or contact our PPP subject matter specialists. Additional information related to other COVID-19 programs and insights may be found in our Squar Milner COVID-19 Resource Center.
Disclaimer: This material has been prepared for informational purposes only, and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional tax planner or financial planner. All information is provided “as is,” with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information.