JACKSONVILLE, Fla. – The deadline to apply for a federally backed Paycheck Protection Program loan is almost here.
Tuesday is the final day for businesses to apply for forgivable loans through the U.S. Small Business Administration’s PPP. There is plenty of money left for businesses to get in on, more than $134 billion, according to the most recent report from June 27.
Through Saturday, the program had backed 4.8 million PPP loans worth nearly $519 billion. Florida was second in the country behind California in the number of loans approved (384,197).
“I think a lot of people were really satisfied early on,” said Bernie Dandridge, Florida Capital Bank small business specialist.
A survey from the U.S. Census Bureau finds that 75% of small businesses reported applying for PPP loans, and 66.6% reported receiving the money.
While businesses are benefiting, Treasury Secretary Steven Mnuchin said around $12 billion dollars in loans were returned. Small businesses were concerned they weren’t going to meet the guidelines to make the money forgivable.
The Treasury and the Small Business Administration released a new set of guidelines under the Paycheck Protection Flexibility Act that made it easier for businesses to get their federal loans forgiven.
Outlined in the SBA’s and Treasury’s forgiveness application, here are some of the biggest changes made:
- More time to spend the money: Instead of eight weeks, borrowers now will have 24 weeks from the day they get their PPP funds to use them.
- Less money must be dedicated to payroll: To qualify for full forgiveness of their loans, borrowers now must allocate at least 60% of their PPP funds for payroll expenses instead of the 75% mandated before. The other money may be used to pay for overhead costs, such as rent, mortgage interest and utilities.
- More time to rehire staff: To qualify for full forgiveness under the old rules, business owners had to maintain the average number of employees they had on staff as of Feb. 15 and pay them at their same rate, or they at least had to meet those criteria by June 30. The new rules extend that safe harbor date to Dec. 31.
Full forgiveness might also be available when a business can’t hire back their full staff under COVID-19-related workplace safety requirements mandating that they operate at less than full capacity.
Dandridge says if you would like to apply for a loan, reach out to your bank immediately.