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Paycheck Protection Program Updates: SBA Extends Application Deadline, PPP Flexibility Act Passed

Posted on 7/21/2020 by Ray Lamboy in LAEDA News

Early last month, the SBA extended the application deadline for the Paycheck Protection Program, giving small business owners the ability to apply for PPP funding until the August 8, 2020 deadline.

According to the SBA’s notice, “The Paycheck Protection Program resumed accepting applications July 6, 2020, at 9:00 AM EDT in response to President signing the program's extension legislation. The new deadline to apply for a Paycheck Protection Program loan is August 8, 2020” (SBA.gov).

The Paycheck Protection Program Flexibility Act (PPPFA) was passed on June 5, 2020. The PPPFA extends time period to use funds from 8 weeks to 24 weeks, lowers the amount of loan needed for payroll to 60% (down from 75%), pushes back a June 30 deadline to rehire workers to December 31, 2020, eases rehire requirements, and extends repayment term from 2 years to 5 years. For entire guidance, please refer to the U.S. Department of the Treasury Statement released on June 8, 2020 (https://home.treasury.gov/news/press-releases/sm1026).

Though the PPP is a federal program, it is administered through participating banks. If a business owner receives PPP funding, they can apply for forgiveness at the bank from which they originally applied to the program.

“The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll,” informs a statement from the SBA.gov website. “SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses” (SBA.gov).