The PPP Loan Program Is Extended – What Businesses Need To Know

President Trump recently extended the deadline for PPP loan applications from 30th of June to the 8th of August. The Small Business Association released the data for all Personal Protection Program loans, around 4.9 million, issued to date. Loans over $150,000 have extra data, including the company names, addresses, demographic information, NAICS codes, number of employees, congressional district, and the loan issue date. If the loan is under $150,000, then the company name and address will not be shared. You can hire the best lawyer for a car accident.

Steven T Mnuchin, the Small Business Association’s Treasury Secretary issued a press release which clarified that the average size of a PPP loan is $100,000 which means that small businesses are receiving these loans. The SBA made the decision to release the data so that there was maximum transparency while protecting sensitive data. Politicians and associations were among some of the groups asking for transparency. They were concerned the program might be suffering fraud. Many companies who legitimately received PPP loans but fear auditing and backlash, have returned their loans, which total $30 billion.

Other business groups have pushed for loan forgiveness on all loans under $1 million as long as the money is spent as per the guidelines. The guidelines state that 60% needs to be paid towards payroll, and the remaining 40% can be used for rent, utilities, mortgage payments, or loan interest.

Unfortunately, the data that was released was incomplete and caused PPP loan recipients a lot of anxiety as many of the figures were wrong. In some cases, the employee numbers were wrong, and loan recipients were worried about audits or negative backlash. In most cases, though, the incorrect data came from lenders who were trying to get as many loans as possible, as quickly as possible to businesses.

In most cases, independent contractors, sole proprietors, and businesses with ten or fewer employees will not be audited. PPP loan recipients who were granted more than $2 million are more likely to be audited, but the audit is designed to identify fraudsters, not catch out small business owners.

The program has received negative press due to confusion, constant updates to guidelines, and problems. However, it has met its purpose of keeping employees employed and giving the economy some liquidity. The government has moved at a quick pace with this program, they have issued 4.9 million PPP loans in three months, whereas the SBA usually only issues 1,000 loans a year. There is still $130 billion left in the program, which is why the deadline for applications has been extended to the 8th of August.

Economists theorize that funds are left in the program due to PPP applicants worried about audits. The government issued some new information on the 22nd of June that will hopefully calm the worries of businesses.

 

 

 

 

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