UPDATE: HOUSE PASSES, PRESIDENT TRUMP SIGNS: EXTENSION OF PAYCHECK PROTECTION PROGRAM(PPP) APPLICATION DEADLINE TO AUGUST 8, 2020:
From news sources:
“President Donald Trump on Saturday July 4 signed an extension of the small business Paycheck Protection Program into law, according to the White House.”
“House lawmakers unanimously passed the extension less than a day after the program expired, and PPP will now remain open to applications through Saturday, August 8. “
“The President’s approval of the measure completes a whirlwind few days for a program that was all but certain to shutter until bipartisan negotiations were sparked in the Senate on Thursday.
“Congress created the program in March to help small businesses keep employees on their payrolls through nationwide closures amid the Coronavirus pandemic.”
“More than 4.8 million small business owners have tapped more than $520 billion in potentially forgivable loans through the program.”
“The program was so critical at its inception that a first round of funding dried up in fewer than two weeks in April and had to be replenished.”
“But interest in the program waned in recent weeks, as shifting rules and the inability of borrowers to come back for a second loan, limited the number of small businesses able to go through the application process.”
“At the time of the program’s closure last Tuesday, more than $130 billion in allocated funds remained unused.”
“Negotiations are underway among lawmakers of how to get the smaller, hardest-hit businesses to tap into a second round of aid.”
FURTHER INFORMATION FROM LAST WEEK, REPEATED HERE:
(From “Roll Call” publication, June 30, 2020)
“The United States Senate passed a bill to extend the filing deadline for Paycheck Protection Program(PPP) loans on Tuesday evening, June 30, just hours before the Small Business Association (SBA) was set to stop accepting loan applications.
Senator Benjamin Cardin, ranking member of the Small Business and Entrepreneurship Committee, asked for unanimous consent on a bill that would EXTEND THE PROGRAM’S DEADLINE FROM JUNE 30 TO AUGUST 8. He was met with no objections, sending the legislation over to the House of Representatives.
But unless and until the House OKs the language, the SBA will stop accepting applications to the program, which was extremely popular early on in the COVID-19 pandemic to keep small businesses afloat during the mass shutdowns initiated to slow the spread of the disease.
The PPP provides small businesses forgivable loans of up to 10 weeks’ worth of payroll to use mostly on paying workers and some other fixed costs. If the businesses follow the program’s guidelines, their debts are forgiven. Money used for other purposes turns into low income loans with five-year terms.
But in recent weeks, applications to the PPP have declined, and the amount of loan money available increased as some borrowers returned their loans or paid them back early. Enactment of a bill to loosen the program’s requirements and extend the period in which the forgivable loans could be spent, did little to increase demand for the SBA money. It’s unclear whether many small businesses would take advantage of a later deadline.
Small Business committee chairman Marco Rubio, an architect of the program, said he wants to repurpose the funds to help the hardest hit small businesses. That idea would allow businesses demonstrating particularly large drop offs in revenue to apply for additional forgivable loans wherein the portions not used for payroll would be converted into long-term, low-interest loans.
Associated California Loggers wants you to have this information now, even as the House of Representatives has not passed this bill yet. Should the House do so, the extension for making applications to August 8 will happen quickly. (We will let you know of the House vote.) ACL also advises you to consult with your banker about the status of the Paycheck Protection Program in terms of the bank’s ability to make the loans.