As the deadline for small businesses to apply for federal relief draws near, requirements for the forgivable loan program called Paycheck Protection Program continue to change, as have applications.
The deadline for small businesses to apply for PPP loans is June 30.
The U.S. Small Business Administration, which runs the program, said changes made by Congress offer businesses more time and flexibility to keep employees on their payrolls and ensure continued operations. The announcement is here.
The covered period for loan forgiveness has been extended from eight weeks to 24 weeks after the date of loan disbursement, the SBA said.
Also changed is the requirement that 75% of a borrower’s loan proceeds must be used for payroll costs and 75% of the loan forgiveness amount must have been spent on payroll. Those thresholds have been changed to 60%.
Also under the new rules, loans issued on June 5 and thereafter mature at five years.
In addition, the government changed the eligibility threshold for people with felony criminal histories. The look-back period has been reduced from five years to one year to determine eligibility for applicants who have been convicted of non-financial felonies. For financial felonies, the period remains five years.
In other news, the SBA on June 15 reopened applications for Economic Injury Disaster Loans (EIDL) and EIDL Advances. Details are here.