The Paycheck Protection Program (PPP) application period was set to close on March 31, but Congress recently approved a 60-day extension to May 31. In addition, it gives the Small Business Administration (SBA) an additional 30 days to process new loan requests.
The extension aids lenders and businesses that have encountered errors in the application process. In the current round of PPP, the SBA increased security to address fraud. This means approval times were much longer for some.
The PPP provides small businesses with forgivable loans to cover payroll costs and employee benefits. Employers also can use the funds to pay interest on mortgages, rent, utilities and payroll expenses. The SBA recently updated application forms for borrowers and lenders. This form, and updated loan amount formulas, make it easier for sole proprietors, independent contractors, and Schedule C filers to qualify for a PPP loan.
Businesses that received loans through PPP last year may be able to receive a second loan if they:
- Have no more than 300 employees
- Already received a first draw PPP loan and used the full amount only for authorized uses
- Can show at least a 25 percent reduction in gross receipts between comparable quarters in 2019 and 2020
The deadline for all entities to apply for all PPP loans is May 31, 2021.
The SBA through March 28 had dispersed about $734B of the $806B Congress appropriated for PPP, or nearly 91% of the funds. SBA officials project the remaining funds will be allocated by the end of April at current lending rates. Make certain to apply for your PPP loan as soon as possible.
To find ways to take advantage of the new Second Draw PPP Loans, contact Time Equipment Company by Email or 800-977-8463.
*This document simplifies complex Acts as it is understood by Time Equipment Company. It is not to be taken as legal advice. The regulations for this program are changing. For further information about the Paycheck Protection Program please visit www.sba.gov or www.coronavirus.gov