The deadline to apply for Paycheck Protection Program (PPP) Loans has been extended through August 8, 2020. Therefore, small business owners have more time to take advantage of this relief measure designed to help organizations impacted by the outbreak of COVID-19.
What Are PPP Loans?
The Paycheck Protection Program was established by the Coronavirus Aid, Relief and Economic Security (CARES) Act and is implemented by the Small Business Administration (SBA). PPP Loans are made by lending institutions and guaranteed by the SBA.
PPP Loans are geared to helping small business owners keep their employees on the payroll and make some payments that are necessary to the operation of their businesses. The amounts of PPP Loans are based on the average monthly payroll costs for 2019. You can receive 2.5 times that value to help cover eight weeks of payroll.
Who Can Apply for PPP Loans?
Above all, this program aims to help small businesses. All businesses with fewer than 500 employees can apply for PPP Loans. However, a business can qualify as small even if it has more than 500 employees if it meets the industry criteria set forth by the SBA. You can use this online tool to check whether your small business is small according to SBA standards.
What Are the Rules to Apply for Forgiveness of a PPP Loan?
In order to receive full loan forgiveness, 60% of the PPP Loan proceeds must go towards payroll (you can use the rest to pay for rent, utilities and interest on mortgages.) Keep in mind that even if you don’t meet the 60% threshold, you can still apply for partial forgiveness.
Originally, business owners had only eight weeks to use their PPP Funds, but the Paycheck Protection Program Flexibility Act extended that timeframe to 24 weeks. The Paycheck Protection Program Flexibility Act also introduced more lenient rules that allow business owners to qualify for full forgiveness even if they can’t rehire all their employees by December 31, as long as they meet certain qualifications.
You can take a look at the PPP Forgiveness Application Form here.
More PPP Resources
We have covered PPP Loans extensively to keep you updated about this important measure for your small business. Here are some posts you may find useful to gain a deeper perspective:
- Tips to make the most of your PPP Loan
- The facts you need to know about the Paycheck Protection Program Flexibility Act (PPPF)
- Is your small business eligible for a PPP Loan? Discover it here
- Keep these tips in mind before applying for any business loan
Uniko Biz Solutions is here to help your business grow and thrive. We specialize in flexible solutions that fit your specific business needs according to your industry and scope.