In this 2-minute read:
- The PPP application deadline is being extended to 8/8/2020
- No other rules have been changed
- The need for “PPP3” to help support struggling businesses
Just before the Paycheck Protection Program application deadline at midnight on June, 30, 2020, the Senate passed a bipartisan measure extending the PPP loan application deadline to August 8, 2020.
The House passed the bill on July 1, sending it to the desk of President Trump to be signed.
The first round of ~$350 billion in emergency funding quickly ran out, and the PPP was re-funded with an additional $320 billion to help American small businesses struggling due to the effects of COVID-19.
Since then, demand for PPP loans has waned somewhat, and there is still roughly $130 billion in PPP funds not spoken for. Add to that the fact that the coronavirus pandemic has continued to severely impact American businesses, and you can see the need for an extension of the PPP application deadline to allow more struggling businesses time to apply.
The application, qualification, and PPP loan forgiveness process hasn’t changed
There have been several revisions to the PPP loan forgiveness requirements and extensions to the “covered period” and other rules over the past few months, but this application deadline extension doesn’t add any new rules, requirements, or restrictions over and above what has already been done.
Small business owners who have been indecisive about whether to apply for a Paycheck Protection Program loan now have another 5 weeks to apply, or leave that emergency business funding—which is 100% forgivable if you spend PPP the funds as intended and apply for forgiveness—on the table.
Will there be a PPP3 or “double dip” for struggling businesses?
At this point there is no “double dip” permitted for small businesses who already received a PPP loan, nor any increase in the amount that may be borrowed.
As the COVID-19 pandemic continues on and new cases are spiking, causing some states to “re-close” some businesses and spaces or tighten restrictions, there are concerns that the initial intent of the Paycheck Protection Program as a “bridge” to the summer months is inadequate to meet the serious financial needs of America’s businesses.
There is speculation about the need for a “PPP3,” or a bill allowing businesses to reapply for a second influx of cash even if they received a PPP loan. However that remains to be seen. Since demand for PPP loans appears to have softened dramatically since the initial few weeks of the program, it is questionable whether the theoretical PPP3 would have a significant benefit or widespread adoption without a much simpler application process or an increase in the available funding per business.
Without significant revisions to the PPP program that would allow easier access or additional funds under the CARES act, many of America’s small businesses will continue struggling under very difficult circumstances.
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