There is still time to apply for the Paycheck Protection Program, the federal-loan initiative from the Small Business Administration that incentivizes small businesses to keep their workers on the payroll. And, as of last week, $130 billion still remains available to distribute to small businesses in need. Reason being, a number of businesses have returned their approved loans on account of the confusing rules and regulations for guaranteeing that their loan will be forgiven.
So, the SBA recently updated its loan-forgiveness criteria to make PPP more favorable for businesses. Key changes include:
—The time period during which the proceeds must be used has now expanded to 24 weeks (from eight weeks)
—The borrower is only required to use 60% of the proceeds for payroll (previously it was at 75%)
—The repayment period for unforgivable loans has now stretched from two years to five years (for loans approved after June 5, 2020)
—The period to rehire employees has extended from June 30 to December 31, 2020
—If the SBA determines that a business must repay the loan, the deferral period for loan payments has been extended to 10 months (from six months)
—New exceptions will be considered for borrowers that are unable to return to the same level of business activity because of COVID-19 regulations and workplace safety
The best way to apply is to reach out to your bank, but you can also download the application from the SBA.