Paycheck Protection Program deadline extended until Aug. 8
July 6, 2020
President Donald Trump signed into law on Saturday, July 4, a bill that extends the deadline for small businesses to apply for a Paycheck Protection Program loan.
The bill, which was passed by the House last week, means the program will remain open until Aug. 8. As of last week, about $130 billion remained in the fund.
In April, President Donald Trump signed into law a bill that included $321 billion of additional funding for the Paycheck Protection Program. The first installment of the program, which was created in response to the economic woes caused by the COVID-19 pandemic, ran out of funds in mid-April.
The program has received some criticism, including in a report from the U.S. Government Accountability Office issued last week. Among the problems raised in the report was that the Small Business Administration wasn’t ready to address fraud risks within the program.
In June, Congress passed a bill aimed at providing more flexibility for businesses using Paycheck Protection Program loans.
Flexibility would be provided by lowering the amount of the PPP loan that must be used on payroll from 75% to 60%, by increasing the period businesses have to use the loan from eight weeks to 24, by expanding the two-year loan maturity to five years for new loans, and by allowing for businesses receiving a loan to take advantage of the employer payroll tax deferment.
The payroll percentage change is intended to allow businesses to use more of their loan to cover rent and utilities while still qualifying for loan forgiveness. Existing loans will not be affected by the increase of loan maturity to five years, but lenders and borrowers can renegotiate.
OOIDA said the bill was a step in the right direction and that the Association will continue to push for legislation that will specifically help small-business truckers.
Paycheck Protection Program loan data released
On Monday, July 6, the SBA released data involving the 4.9 million Paycheck Protection Program loans that have been made.
“The PPP is providing much-needed relief to millions of American small businesses, supporting more than 51 million jobs and more than 80% of all small-business employees, who are the drivers of the economic growth of our economy,” Treasury Department Secretary Steven Mnuchin said in a news release. “We are particularly pleased that 27% of the program’s reach in low and moderate income communities, which is in proportion to the percentage of population in these areas.”
According to the data, the average loan has been about $100,000. Mnuchin said that number demonstrates “that the program is serving the smallest of businesses.”
The data, including business names, addresses, business type and loan amount ranges can be found here.
“Today’s data shows that small businesses of all types and across all industries benefitted from this unprecedented program,” Mnuchin said. “The job numbers released last week reinforce that PPP is working by keeping employees on payroll and sustaining millions of small businesses through this time.”