The U.S. Congress passed by unanimous consent a five-week extension of the Paycheck Protection Program (PPP), just a few hours before the application window on the program was scheduled to close.
The surprise move is intended to provide more time for small businesses to apply for the approximately $129 billion in PPP funding remaining.
The Illinois Hispanic Chamber of Commerce (IHCC) applauds and celebrates this decision.
The PPP was launched in early April as the COVID-19 pandemic battered the U.S. economy and forced many businesses to close. The program provides forgivable loans that small businesses and other qualifying entities 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. The plan would extend the application period until Aug. 8.
Until now, the SBA had approved nearly 4.9 million loans for a total of more than $520 billion.
If passed, many HBEs who have not been approved will have the opportunity to apply once again before the new proposed deadline of August 8, 2020.
The PPP in brief
Congress created the PPP as part of the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136. The legislation authorized Treasury to use the SBA’s 7(a) small business lending program to fund forgivable loans of up to $10 million per borrower that qualifying businesses could spend to cover payroll, mortgage interest, rent, and utilities.
The loans are available to small businesses that were in operation on Feb. 15 with 500 or fewer employees, including not-for-profits, veterans’ organizations, Tribal concerns, self-employed individuals, sole proprietorships, and independent contractors. Businesses with more than 500 employees in certain industries also can apply for loans.
Congress designed the loans to support organizations facing economic hardships created by the coronavirus pandemic and assist them in continuing to pay employee salaries.
PPP loan recipients can have their loans forgiven in full if the funds were used for eligible expenses and other criteria are met.
The amount of the loan forgiveness may be reduced based on the percentage of eligible costs attributed to nonpayroll costs, any decrease in employee headcount, and decreases in salaries or wages per employee.