President Trump signed a bill into law on July 4, 2020 that extends the Paycheck Protection Program (PPP) deadline for five more weeks until August 8. The original deadline to apply for the PPP was Tuesday, June 30, however $130 billion still remained in the fund.
The extension is intended to provide more time for small businesses to apply for the remaining PPP funds. The PPP was launched as the COVID-19 pandemic forced many businesses to close down operations. The program provides loans for small businesses that can be used to cover payroll, rent and other overhead expenses. These loans can be forgiven if businesses use at least 60% of the funds for payroll. The amount of the loan forgiveness may be reduced based on the percentage of eligible costs attributed to nonpayroll costs, any decrease in employee headcount, and decreases in salaries or wages.
The program has so far loaned approximately $520 billion to almost 5 million small businesses. The Treasury Secretary has said that the next round of small business relief will be “more targeted” to industries that are struggling the most, like hotels and restaurants. This support will help businesses address the challenges they are dealing with now, several months into the pandemic.
