There is one week left for small businesses, nonprofits, independent contractors and other eligible borrowers to access a forgivable loan through the Paycheck Protection Program (PPP). June 30, 2020 is the last day the U.S. Small Business Administration (SBA) can approve PPP loan applications. More than $128 billion in PPP funds are still available.
The PPP is a loan designed to provide a direct incentive for small businesses and nonprofits to keep their workers on the payroll. The SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
PPP loans are made by more than 4,500 participating PPP lenders nationwide; and, guaranteed by the SBA. Interested borrowers apply with local lenders who then submit the application to the SBA for approval.
“The SBA has streamlined many of its lending processes to accommodate the high volume of PPP loans. Yet compiling paperwork for a commercial loan still takes time. That’s why we urge small business and eligible organizations who can benefit from this forgivable loan to apply now,” SBA Pacific Northwest Regional Administrator Jeremy Field said. “If you wait to start the process June 30, it will be too late. I don’t want to see any of our valuable local businesses leave money on the table.”
As of June 20, the SBA has approved more than 4.6 million PPP loans valued at nearly $515 billion. The following is a summary of approved PPP loans in the Pacific Northwest Region:
|Loan Numbers||Loan Volume|
|Pacific Northwest||196,508||Nearly $23 billion|
|National||4.6 million||Nearly $515 billion|
Support to Smaller Businesses
Most PPP loans are going to smaller firms. The average loan size is $110,000; and, two-thirds of PPP loans are for $50,000 and under.
Support to Underserved Businesses
The SBA has also placed special focus on reaching underserved small businesses to ensure accessibility to all firms that can benefit from the PPP.
More than one million loans have been disbursed by lenders who specialize in helping underserved communities; and, 45% of PPP loans have been made in low-income counties.
Additionally, the SBA launched a dedicated online tool for small businesses and non-profits to be matched with Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs), Farm Credit System lenders, Microlenders, as well as traditional smaller asset size lenders in the PPP.
Lender Match is an additional resource for pandemic-affected small businesses who have not applied for or received an approved PPP loan to connect with lenders.
PPP information and forms are translated into 17 languages including Spanish, Arabic, Chinese (Mandarin/Cantonese), French, German, Gujarati, Haitian Creole, Hindi, Italian, Japanese, Korean, Polish, Portuguese, Russian, Tagalog and Vietnamese.
With the enactment of the PPP Flexibility Act, it extends the covered period for loan forgiveness from eight weeks after the date of disbursement to 24 weeks, providing substantially greater flexibility for borrowers to qualify for loan forgiveness.
It also adjusts the minimum amount of loan proceeds borrowers use for payroll costs to qualify for forgiveness from 75% down to 60%.
And, it gives safe harbor from reduction in loan forgiveness as it relates to the inability of a business to return to previous business levels that operations were before February 15, 2020. This can be due to requirements and guidance from HHS, CDC and OSHA. Or, it can be due to demonstrated difficulty in rehiring or finding new qualified employees to match employment levels on February 15. This safe harbor is through December 31, 2020.
More information about the PPP – including how to find a PPP lender, application forms, and the new simplified forgiveness and EZ forgiveness applications – is available at www.sba.gov/paycheckprotection