Don’t be shocked now, the Paycheck Protection Program has changed… Again!
Following the rules, regulations and processes for the Paycheck Protection Program (PPP), Congress’ lifeline of working capital for small businesses, has been akin to trying to follow a superball bouncing in a small room. At least this most recent change is a positive one.
The U.S. Senate passed by unanimous consent a 5-week extension of the PPP late last night just a few hours before the application window on the program was scheduled to close.
The House of Representatives would have to pass the measure and the President would have to sign it before the extension will take effect. Both chambers of Congress are expected to adjourn by the end of the week for a two-week recess. While there is by no means a guarantee, it is considered likely that the legislation will be passed and signed.
The surprise move is intended to provide more time for small businesses to apply for the approximately $129 billion in PPP funding remaining. The PPP was launched in early April as the COVID-19 pandemic thrashed the U.S. economy forcing many businesses to close. The program provides forgivable loans that small businesses can use to cover payroll and other select costs.
The U.S. Small Business Administration (SBA), which oversees the program with the Treasury Department, stopped accepting loan applications at midnight Tuesday, June 30. This new plan approved by the Senate Tuesday night would extend the application period until August 8.
Haven’t applied yet? Get your application set now.
As we issue this newsletter, the ability to apply for a PPP loan has passed and the SBA Website, as well as those of the lenders, will not accept applications. However, this will change once the bill is signed into law.
One group of small businesses seems to be the most likely to have missed out on applying for PPP assistance, that being self-employed individuals with no employees. We continue to receive calls from new clients and the press inquiring about the PPP for these businesses. If you have a profitable small business which you report on Schedule C with your annual tax return, you likely qualify for a PPP loan. Don’t hesitate if you are in this category, apply right away.
More assistance may be on the horizon.
An extension of the PPP until August 8 basically buys Congress time to pass other legislation to further target funds in whatever form that may take. So far, members of Congress have proposed legislation to send the leftover aid to especially hard-hit businesses. One bill proposed by Senate Democrats would earmark the funds to businesses with fewer than 100 employees who have also taken an over 50% revenue hit. There have also been reports on details of a new proposal from Senator Rubio that would include parceling off $25 billion in funds for businesses with fewer than 10 employees, among other changes.
Stay tuned here with us. We will let you know how things are unfolding as Congress and the White House continue to try and keep small businesses, and the overall economy, from reversing course. As we see some states rein in on their phase three and four reopening – some even scaling back – there will be tremendous pressure on Congress to act in support of small businesses. Scholl & Company is here to help you.
Scholl & Company is here to help you.
If you need help, or know of someone who does, we are ready to assist you. Just give us a call at (831) 758-5966 or email us at info@schollcpa.com.