The Paycheck Protection Program (PPP) resumed accepting applications on July 6th, following the President signing the program’s extension over the July 4th weekend. According to the Small Business Association (SBA), approximately $130 billion allocated for PPP was left untapped once the original June 30th deadline expired. Small businesses now have an additional five weeks to apply for loans or until August 8th.
The SBA reported that 4.8 million businesses received funds, totaling $520 billion of the original $670 billion PPP funds authorized by Congress this past March. Businesses with fewer than 500 employees may apply for a PPP loan through any existing SBA 7(a) lender or FDIC bank, federally insured credit union, and Farm Credit System institution that is participating in the program.
Total loan forgiveness is available to businesses who prove they have suffered a 50 percent or more revenue loss, due to the pandemic. Additionally, at least 60% of the PPP funds must be spent on payroll costs, while the other 40% may be allocated for assistance with rent, utilities, and interest on mortgages.
Congress is expected to address further emergency relief funding in late July, as well as ways to repurpose any leftover funds. Lawmakers have also discussed the possibility of permitting businesses with fewer than 100 employees to apply for a second loan, as well as sole proprietorships and self-employed individuals, provided they have exhausted their original PPP loan.
Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.