Small Business Loan Program Extended Deadline | Coronavirus
WINCHESTER – President Donald Trump signed the Wage Protection Program Extension Law on Saturday, which comes with several changes from the original PPP loans.
The original program – Small Business Administration loans to help businesses keep workers employed during the COVID-19 crisis – expired on June 30, but is now extended until August 8. The extension means small businesses now have until August 8 to apply for help. , if they haven’t already. Of the $ 660 billion allocated to the program, $ 130 billion remains. About 5 million small businesses have already received loans to help with payroll, rent and other expenses.
“The Top of Virginia regional chamber applauds the extension of the payroll protection program until August 8,” Cynthia Schneider, CEO of the Top of Virginia regional chamber, said Monday as director of the Lord Fairfax Small Business Development Center. , Christine Kriz, shared information about the new PPP Flex law. “This action expands the opportunities for companies to continue to adapt to the changing business climate and to strengthen their operations. It is this type of care that helps ensure the continued revitalization of our economic engines.
The original guidelines said that loans can be canceled if companies use at least 75% for payroll. This has been changed to 60%.
Originally, the loan money was to be used within eight weeks of receipt; which has been revised to 24 weeks. Once the money is spent, companies can request forgiveness. Businesses that received a loan before June 5 can apply for a forgiveness earlier.
For loans approved on or after June 5, the repayment term for converted funds will be five years at 1%. Loans approved before this date can be extended to five years if the lender and borrower agree.
Compensation for employees increased from $ 15,385 to $ 46,154.
Prior to the extension, loan cancellation could be limited if full-time equivalency pay was not reinstated by June 30, but this was changed to December 31. The cancellation for the reinstatement of wages was also extended until December 31.
Employers can now defer all FICA 2020 payments to 2021 and 2022, even if the P3 loan is canceled before December 31.
The deferral of principal and interest will now go until the date the lender receives the remission amount from the SBA, which in practice takes much longer. A new provision has also been added to indicate if a borrower does not request a rebate within 10 months of the end of the borrower’s covered period, payments will begin at the end of the 10 month period. Additionally, for borrowers who borrowed before June 5 and use the eight-week covered period, payments will begin 10 months after the eight-week period ends if they do not ask for forgiveness.
Some aspects of the program remain unchanged.
The SBA always reserves the right to audit or review any approved and funded PPP loan; borrowers can only get one PPP loan; loans can be increased, but only if the lender approves the increase before filing the first 1502 report with the SBA; and the IRS prevents deducting operating expenses canceled under the P3.
Kriz said the SBA sent an email last week to anyone who applied for an Economic Disaster Loan (EIDL) but did not request the EIDL advance, which was to provide up to 10,000. $ economic assistance to businesses currently experiencing temporary difficulties.
This week, she said, the SBA is reinstating EIDL advance eligibility to those who have not checked the box to be considered for an EIDL advance.
“Your advance amount is based on $ 1,000 per employee, up to a maximum of $ 10,000,” she said in an email. “As a reminder, the advance does not have to be repaid and you do not have to be eligible for a loan to receive the funds for the advance. “
She noted that if a business also received a PPP loan from a participating lender, the advance amount will be subtracted from the recoverable amount of the PPP loan – “in other words, that part of your PPP loan will not qualify. at a discount. ,” she said.
She said the SBA will process the advance loans using the information provided in the original EIDL application this week.
“If they are able to verify and validate the information you provided in your application, your advance will automatically be deposited into your bank account,” she said. “If for some reason they fail to process your advance successfully, you will receive an email notification with a link to update your business and bank account information. “