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  • Writer's pictureCounsel


On July 3, President Trump signed the PPP Extension Act, lengthening the deadline to apply for a PPP Loan until August 8, 2020. The loan program was designed to help keep businesses afloat, and keep paychecks going to employees. With Congress still working on a second funding program to help small businesses and the economy, this extension gives small business owners more time to apply for relief through the PPP Loan.

A few things to consider if you haven’t been approved for a PPP Loan yet:

  • About $130 billion in PPP funds are still available.

  • If you received your PPP Loan but returned the funds, you can apply again.

  • If you applied for a PPP Loan and were denied, you can apply again. Speak with your lender so you understand why you were denied. If you were rejected because of eligibility requirements, you may want to apply with a different lender.

  • At this time, you cannot use multiple PPP Loans (however, that could change).

As a reminder:

-The amount of your loan can be forgiven up to the amount of acceptable expenses (listed below) and payments made during the 24-week period (covered period), which begins on the date of the receipt of the loan from the lender.

-To maximize loan forgiveness, at least 60% of the loan amount must be used for payroll costs. Not more than 40% of the loan can be used on non-payroll costs.

-The amount of your loan forgiveness will be reduced if you don’t maintain the same number of full-time employees during the covered 24 week period, or if wages are decreased by more than 25% for employees making less than $100,000 per year. If you have laid off employees or reduced their wages, you should hire them back and reinstate their salaries.

-If you follow these guidelines, your PPP Loan can be forgiven up to the full amount of the loan, as well as any accrued interest.

Acceptable Expenses:

-Payroll costs (including payroll benefits)

-Interest payments on any covered mortgage obligation incurred before 02/15/2020

-Rent payments under a lease beginning prior to 02/15/2020

-Utility payments for services that began prior to 02/15/2020 (It is unclear at this time what utilities are eligible for forgiveness; we are waiting for further direction from the SBA)

It is not required, but it would be smart to open a separate bank account so it’s easier to track PPP Loan funds. Make sure that you start tracking your expenses as soon as you receive the funds from your loan; your books should be accurate and expenses categorized, including dates. Remember that while the SBA oversees the Paycheck Protection Program, the loan comes from your lender. Make sure you understand your lender’s rules for loan forgiveness, and don’t forget to apply for loan forgiveness when the time comes.

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