Congress has made some updates to the Pay Protection Program (PPP), making them a bit more business friendly.
Under the new rules, businesses will have more freedom to spend the money provided under the PPP as well as more time. Businesses can now spend less money on payroll, but still qualify for the program’s lure of forgiveness. The government has pledged that if the loan is used properly then the loans are forgiven.
Due to the short time-frame and red tape, many small businesses avoided applying. According to KBW equity analyst Kelly Motta, there is nearly $130 billion still available in PPP loan money. Based on these changes, it is hopeful that a greater portion of forgiveness could be pushed into 4th quarter and early 2021.
Business owners should act fast; with these changes, the applications will go quickly.
Here are the latest updates:
PAYROLL PROTECTION PROGRAM (PPP):
- Extended spending period to 24 weeks (up from 8 weeks)
- 60% of the funds to be spent on payroll (down from 75%)
- 5 years to repay the loan (up from 2 years)
- December 31st to return to pre-pandemic employment levels (previously June 30th)
- Payroll tax payments can be delayed (previously not allowed if you had a PPP)