The Paycheck Protection Program (PPP) recently started accepting applications again after the U.S. government signed legislation extending the program. The new deadline for applications is August 8. Nearly $32 billion has been distributed to more than 400,000 small businesses in Florida, saving millions of jobs.
PPP is designed to help small businesses — 500 employees or fewer– to retain employees. Portions of PPP money can also be used for rent, mortgage interest and insurance.The loans are administered by the U.S. Small Business Administration (SBA) and originated by approved third-party lenders. If you are interested in applying for a loan, visit SBA.gov/paycheckprotection for a list of lenders and necessary forms to start an application. Here is an overview of the program, based on information from the Small Business Administration.
Eligible businesses can borrow up to $10 million at a fixed interest rate of 1 per cent for a five-year term. The loan is based on payroll costs, and repayment is deferred for six months. No collateral or personal guarantees are required, and no fees will be charged.
Recipients must use the loan money within 24 weeks after receiving it. Congress recently extended the forgiveness period from eight weeks.
The loan will be fully forgiven if at least 60 per cent (revised from 75 per cent) of the amount is used for payroll. The rest can be used for expenses such as rent, mortgage payments, utilities and loan interest. After the money is spent, businesses can apply for forgiveness by documenting how it was used. Forgiveness is based on the employer maintaining or quickly rehiring employees and keeping steady salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
Where to get help:
The technicalities of PPP might seem overwhelming, but small business owners don’t have to navigate the process alone. In Florida, there are more than 40 Florida Small Business Development Center (SBDC) offices from Pensacola to Key West. The Florida SBDC employs certified business consultants who can help you apply for the PPP, EIDL, and navigate other COVID-related challenges. For more details about the PPP and how the Florida SBDC can help, visit www.FloridaSBDC.org.