In case you missed it last night the U.S. Senate passed by unanimous consent a five-week extension of the Paycheck Protection Program (PPP) until August 8, 2020.
The SBA website should reflect this extension of time within the next several days after the House of Representatives passes the bill. President Trump is expected to sign the bill as soon as it reaches his desk.
The bill will provide more time for small businesses to apply for the approximately $129 billion in PPP funding remaining.
The Paycheck Protection Program(PPP) is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.
SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses. Click here to read more about PPP loan forgiveness.
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating.
Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program. View a list of lenders participating in the Paycheck Protection Program by state.
The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 60% of the forgiven amount must have been used for payroll).
- PPP loans have an interest rate of 1%.
- Loans issued prior to June 5 have a maturity of 2 years. Loans issued after June 5 have a maturity of 5 years.
- Loan payments will be deferred for six months.
- No collateral or personal guarantees are required.
- Neither the government nor lenders will charge small businesses any fees.
The U.S. Small Business Administration (SBA), which oversees the program with the Treasury Department, stopped accepting loan applications at midnight Tuesday ( 6/30/20). The plan approved by the Senate would extend the application period until Aug. 8.