CORONAVIRUS

PPP loan extension: update and dates you need to know

Donald Trump signed a new law that will allow people to take advantage of the PPP for another week with the deadline now set to 8 August.

PPP loan extension: update and dates you need to know
Kevin Lamarque REUTERS

The Paycheck Protection Program — PPP — application process has been extended until 8 August after Donald Trump signed a new law that would allow people to take advantage of the program into the first week of August.

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll according to the Small Business Association’s official website.

The Paycheck Protection Program resumed accepting applications July 6, 2020, at 9:00 AM EDT in response to President signing the program's extension legislation. The new deadline to apply for a Paycheck Protection Program loan is August 8, 2020 -- the website says after Trump signed the bill into law.

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Why was the PPP introduced?

The program was introduced as part of the CARES Act at the beginning of the coronavirus pandemic and was introduced to provide American small businesses with eight weeks of cash-flow assistance through 100 percent federally guaranteed loans. According to the SBA and the Treasury Department, 4.9 millions have been issued so far.

"The average loan size is approximately $100,000, demonstrating that the program is serving the smallest of businesses," Treasury Secretary Steven T. Mnuchin said. "Today’s release of loan data strikes the appropriate balance of providing the American people with transparency, while protecting sensitive payroll and personal income information of small businesses, sole proprietors, and independent contractors."

The PPP has been tweaked to support main street businesses as well as their larger counterparts. The Paycheck Protection Program Flexibility Act was signed off early June and extends the amount of time, and broadens the use of the loan. The repayment period has been changed from two to five years while you can now choose to spend as little as 60% rather than the previously stated 75% on payroll expenses. The Flexibility Act also increases the time to use the loan from eight weeks to 24 weeks, helping borrowers to reach full forgiveness.