Today, the U.S. House of Representatives passed the Senate legislation extending the deadline for companies to apply for Paycheck Protection Program loans (PPP) through August 8. The bill S.4116, was originally passed by the Senate yesterday, and will now go to President Trump for review.
Originally, the application period was set to expire at the end of the day on June 30th, at which $130 million was remaining in PPP funds. On June 30th, the Senate was quick to pass the bill through to the House.
“When Congress passed the CARES Act in March, we thought that small businesses would be operational by the end of June, but it is now clear that our nation’s small businesses will still need support in the weeks and months to come,” said Sen. Ben Cardin(D-MD), the bill’s sponsor and ranking member of the Senate Small Business and Entrepreneurship Committee, said in a news release after the Senate’s action.
Paycheck Protection Program
The Paycheck Protection Program 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.
How To Apply
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.
In the weeks ahead, senators will continue bipartisan negotiations on the Prioritized Paycheck Protection Program (P4) Act—legislation Cardin, Shaheen, and Coons introduced to authorize new lending under PPP to small businesses with 100 employees or less, including sole proprietorships and self-employed individuals. Eligible businesses must have already expended an initial PPP loan, or be on pace to exhaust the funding, and must demonstrate a revenue loss of 50 percent or more due to the COVID-19 pandemic. The bill would extend the application deadline for initial PPP loans from June 30 to December 30, or longer, at the discretion of the Small Business Administration (SBA), and would use existing PPP funding to make P4 loans.
To ensure that under-served and hardest-hit businesses can access P4 loans, publicly traded companies are ineligible for the loans; hospitality and lodging businesses with multiple locations are limited to an aggregate loan amount of $2 million; and the bill would reserve the lesser of $25 billion or 20 percent of PPP funds for employers with 10 or fewer employees, as well as small businesses in under-served and rural communities. The bill also directs SBA to issue guidance to give priority to businesses with 10 employees or fewer in the processing and disbursement of P4 and PPP loans, and requires SBA to request demographic information of P4 and PPP loan recipients.
Additionally, the P4 Act would:
- provide eligible small businesses with as much as 250 percent of monthly payroll costs worth up to $2 million;
- prevent affiliated businesses with separate locations from receiving more than $2 million in aggregate P4 loans; and
- allow P4 recipients maximum flexibility