A bill to move the Paycheck Protection Program (PPP) application deadline from March 31 to May 31 won approval in the U.S. Senate last Thursday. In short, this bill extends the filing deadline for PPP applications by 60 days and provides an additional 30 days for the SBA to finish processing applications received by May 31.
We believe these additional 60 days will greatly help small businesses, non-profits, and those that are completing their existing PPP loan applications or filing new ones. The PPP extension also provides the SBA time to address significant loan challenges; which includes error codes, delayed guidance, and changes to the PPP loan amount calculation for self-employed borrowers.
Patrick Kelley, associate administrator for the SBA’s Office of Capital Access, stated, “Over 190,000 applications are still held up in the SBA due to unresolved error codes”. These error codes are related to properly validating checks, which help prevent fraudulent applications from being funded. Fraudulent applications were a huge issue we saw in PPP Round 1 with huge corporations taking advantage of a majority of the funding. This ultimately left hardly anything for small businesses and we expect to see a dramatic change in small business funding success for PPP Round 2.
As a reminder, your business can choose to spend the funds over any period of time between 8-24 weeks. At least 60% of the money must be spent on maintaining payroll in order to receive full forgiveness. You must be able to show you lost 25% of revenue at least one quarter in 2020 when compared to previous quarters. Your business may also not have more than 300 employees. The interest rate for the PPP remains at 1%.
The team here at Southern Payroll & Benefits will be closely monitoring any updates, and will promptly be notifying the public via our social media platforms.
If you need help with your PPP application or have any questions, please do not hesitate to reach out to us: 423-207-2497
Businesses in Chattanooga, TN, trust Southern Payroll & Benefits with a variety of outsourced HR services, from payroll, to insurance benefits, and tax processing. We partner with you to insure your comfort and to advise on best-practices and compliance requirements. Southern Payroll offers one-month free payroll to all clients, along with no annual contracts, to make sure that we exceed expectations daily. We are also extremely proud of our 2% initiative, in which 2% of all payroll proceeds will be donated to the 501(c)3 approved charity of each client’s choosing. For more information about how we can help your business, schedule a meeting or call (423) 207-2497 today.