On Saturday, July 4, 2020, President Trump signed an extension of the Paycheck Protection Program (PPP) into law, allowing businesses to apply for funding from the program until August 8. After the program expired on June 30, lawmakers moved quickly to extend lending through early August by passing the bill unanimously through the House and Senate last week.
This bill is the most recent legislation to modify the Paycheck Protection Program, which provides small businesses forgivable loans to maintain predominantly payroll costs. The program was originally created by the CARES Act in late March, but after funds had been exhausted several weeks later, Congress and the President moved to replenish funding in April.
While the program is popular, some of the requirements proved onerous. This prompted the passage of the Paycheck Protection Program Flexibility Act, which loosened some of the burdens for loan forgiveness, namely now requiring only 60% of funds to be spent on payroll while widening the timeframe to use the funds. Saturday’s signing now reauthorizes lenders to operate the Small Business Association (SBA) program that still has approximately $130 billion left of the total $660 billion appropriated.
The passing of this extension is another program modification to meet the needs of enterprises coping with the effects of the COVID-19 outbreak. More recently, the Paycheck Protection Program has been altered to provide more long-term recovery assistance to America’s small businesses. ABA continues to monitor the program and will provide further updates if necessary. For more information regarding the Paycheck Protection Program and other relief options, please visit ABA’s COVID-19 Relief & Support Hub or contact ABA staff for assistance.