The PPP (Paycheck Protection Program) has had numerous flaws and complications since the beginning of the pandemic, approximately one year ago.
What We Know:
- Almost 100,000 small businesses in the U.S. have permanently closed since the beginning of the pandemic in 2020. Twelve months later, small businesses are finally getting the attention they deserve from the government. Monday, February 22, congress recently passed the “Economic Aid to Hard-Hit small businesses, nonprofits, and venues act,” in part to reauthorize the PPP that ended in August 2020.
- According to SBA.gov, “To reach the smallest businesses, SBA will offer PPP loans to businesses with fewer than 20 employees and sole proprietors only from Wednesday, February 24 through Wednesday, March 10, 2021. President Biden has also announced additional program changes to make access to PPP loans more equitable.”
- A few key facts about the first round of PPP loans would be that the interest rate is 1%, and business owners can get their loans forgiven if they used 60% of the money to cover payroll. The new round for PPP loans will now be available for people who have a green card or visa to get aid, sole proprietors, independent contractors, and self-employed people.
- Under the first Paycheck Protection Program, small business owners can get their businesses partially or fully forgiven if they spent their funds on rent, utilities, payroll cost, and mortgage as long as the business’s mortgage interest was signed before February 15, 2020.
- Under the second Paycheck Protection Program, there will be expanded coverage for rent, utilities, payroll costs, worker protections, and benefits cost due to Covid-19 making it easier to obtain partial or full loan forgiveness. The maximum loan amount is 2.5x the average monthly payroll cost, up to $2million.
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