President Trump Signs 5 Week PPP Application Extension into Law
Extended at the final hour! With a new application deadline, there is clarity on the PPP forgiveness guidelines.
The President officially signed a five-week extension for PPP loan applications with a new deadline of August 8th. With approximately $130 billion of funding remaining, this is a huge opportunity for small business owners to access funding as the surge in COVID cases may case another partial or full shut down. With the new application deadline, we finally get more clarity to prepare for your work ahead.
Guideline Update Highlights:
1. A borrower may apply for forgiveness any time on or before the maturity date of its loan – including prior to the end of its applicable covered period – if the borrower has used all the loan proceeds for which it is requesting forgiveness.
2. Borrowers that choose to apply for forgiveness prior to the end of their applicable covered period and who have reduced salaries or hourly wages for employees in excess of 25% must calculate such reductions for the full length of the covered period.
3. If a borrower does not apply for loan forgiveness within ten months after the last day of the covered period, or if the SBA determines that the loan is not eligible for forgiveness (in whole or in part), the borrower must begin paying principal and interest. If this occurs, the lender must notify the borrower of the date the first payment is due.
With the extension for PPP applications and the ease of forgiveness regulations, we are expecting to see a jump in applications during the next 5 weeks. Though some borrowers are finding it hard to match with lenders, the SBA launched their new lender matching tool which should help speed up their process in receiving funding.
(see prior blog post regarding the SBA Lender Matching Tool)
Congress has indicated that an additional COVID relief package will be considered in mid-July. As we receive more information regarding that relief we will be sure to keep you updated.
Sources:
https://www.forbes.com/sites/allbusiness/2020/07/08/ppp-loan-program-extended-loan-data-released-what-small-businesses-need-to-know/#43b77dfd7f11
https://www.natlawreview.com/article/ppp-updates-borrower-details-released-application-extension-revisions-to-forgiveness