PPP Application Deadline Extended by Five Weeks
Earlier this month, President Trump signed into law legislation that extends the loan application deadline for the Paycheck Protection Program (PPP) to August 8, 2020. Prior to this legislation’s enactment, the US Small Business Administration (SBA) was set to stop accepting loan applications on June 30, 2020. Now, small business owners have an additional five weeks to take advantage of the program.
The PPP, created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, provides business owners with loans to be spent on payroll and other business expenses. The loans are forgivable so long as business owners spend the loan proceeds within the time period and manner specified by the program rules. In June, President Trump also signed the PPP Flexibility Act making it easier for loan recipients to qualify for forgiveness of their PPP loans.
Soon after the news of the PPP’s application extension was announced, the SBA and Department of Treasury released a report on PPP loan approvals through June 30, 2020. Since the SBA began accepting PPP applications on April 3, 2020, approximately 4.9 million loans have been approved, totaling more than $521 billion. The majority (65%) of these loans were approved in round one of the programs through April 16, 2020. The average loan size is approximately $107,000 and 86.5% of loans are for less than $150,000.
With approximately $130 billion remaining in PPP funding, the extension was approved with unanimous consent in both the House of Representatives and Senate. However, a common critique to the extension, among members of Congress, is that small business owners in need of relief have already applied for and spent the proceeds of their PPP loans. Rather than an extension to a program they can no longer benefit from, these business owners seek a second round of aid, which they hope Congress directs its attention to immediately.
If you are a small business owner and would like to discuss your options relating to your eligibility for a PPP loan, please contact HoganWillig Attorneys at Law at (716) 636-7600.
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