The Paycheck Protection Program (PPP) Has Been Extended
Congress has approved and the president has signed legislation extending authorization for the Small Business Administration’s Paycheck Protection Program (PPP) through August 8, 2020. The bill also decouples PPP authorization from the SBA’s 7(a) lending program, allowing regular 7(a) lending to continue once PPP has reached its authorization cap.
Round 2 of PPP was originally scheduled to end on June 30. The extension is intended to provide more time for small businesses to apply for the approximately $129 billion in PPP funding remaining. Now that the extension has been signed into law, we can continue making PPP loans to qualifying small businesses through the first week of August.
The Paycheck Protection Program (PPP) was established in late March by the CARES Act and implemented by the Small Business Administration (SBA) with support from the Department of the Treasury.
The Bank of Marion processed 457 applications in the two rounds of the Paycheck Protection Program for a total of $21.6 million in funding for area small businesses. This represents the retention of 3,098 jobs in our market.
PPP provides small businesses with the resources they need to maintain their payroll, hire back employees who may have been laid off, and cover applicable overhead. The program is intended as a bridge to help businesses stay open and keep their employees working during the economic downturn caused by the Covid-19 pandemic.
Small businesses use the funds for payment of payroll costs including benefits. Some of the loan funds can also be used to pay interest on mortgages, rent, and utilities. PPP loans can be forgiven, in whole or in part, when certain requirements are met.
Small business owners who had considered applying for a PPP loan but thought that time was running out on the program now have additional time to apply.