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Paycheck Protection Program application deadline extended to Aug. 8

Small businesses affected by the COVID-19 pandemic now have until Aug. 8 to apply for the Paycheck Protection Program, which provides loans that are entirely forgivable if borrowers spend at least 60% of the loan funds on payroll expenses.

With more than $130 billion in PPP funding remaining and the original June 30 application deadline approaching, both the House and Senate last week unanimously passed legislation to extend the application deadline by nearly six weeks.

The overwhelmingly bipartisan support for the bill came as recent surges in coronavirus infection rates across the U.S. have prompted governors and county health officials to scale back reopening plans and tighten social distancing guidelines. President Donald Trump signed the legislation July 4 and the Department of Treasury on Saturday also released data on the distribution of PPP loans in all states and territories.

The federal CARES Act established the PPP in March to assist small businesses impacted by coronavirus-related state and county shutdowns. The program was replenished with $320 billion in funding in April after the program’s original $349 billion was depleted.

Other legislation signed in June relaxed the program’s terms by giving borrowers more time to spend the loan money in order to qualify for loan forgiveness and lowering the percentage of the loan (from 75% to 60%) that borrowers must spend on payroll costs to qualify for complete loan forgiveness. 

Those added flexibilities could especially assist dentists in California who, for example, were following county shelter-in-place orders that were stricter than the statewide order. Practice owners who have been slower to reopen their offices have continued to pay rent, mortgage interest and utility costs during closures. The program’s revised terms allow borrowers to spend 40% of the loan amount on nonpayroll costs, such as rent, and remain eligible for complete loan forgiveness.

Borrowers must complete and submit the Small Business Administration’s application to determine how much of their PPP loan will be forgivable and can visit the SBA’s website for more details and frequently asked questions about the program. SBA also has a free online resource that borrowers can use to be matched with prospective lenders.

Related articles:
Flexibilities added to Paycheck Protection Program to assist small businesses
SBA reopens Economic Injury Disaster Loan, EIDL emergency grants to all eligible applicants
Paycheck Protection Program loan forgiveness application, guidance now available

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