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Businesses Have More Time to Apply for Paycheck Protection Program (PPP) Loans by Joseph C. Leuchter, CPA


Posted on July 15, 2020 by Joseph Leuchter

Congress agreed to extend the timeline of the Paycheck Protection Program (PPP) to August 8, giving small businesses and nonprofit organizations an additional five weeks to apply for potentially forgivable government-backed loans.

The PPP was introduced by the CARES Act to help qualifying businesses, nonprofits and self-employed taxpayers maintain operations and retail employees through the COVID-19 pandemic. As of June 30, approximately $130 billion of the original $660 billion in funding remains available to qualifying applicants.

Borrowers may qualify for complete loan forgiveness when they use at least 60 percent of loan proceeds to cover payroll costs and no more than 40 percent on mortgage interest, rent and utilities. The amount of loan forgiveness will be reduced if borrowers spend less than 60 percent of funds on payroll, if they cut employees’ salaries, and/or if they reduce the number of their full-time employees. Any unforgiven balances will be subject to a five-year repayment period at an interest rate of 1 percent.

Businesses and nonprofits seeking to apply for PPP loans should first reach out to their existing banking relationships. For additional assistance, prospective borrowers should contact their trusted financial advisors and CPAs or visit the Small Business Administration’s website.

About the Author: Joseph C. Leuchter, CPA, is a senior manager in the Tax Services practice of Berkowitz Pollack Brant Advisors + CPAs, where he helps individuals and businesses grow their wealth and profits while maintaining tax efficiency and compliance. He can be reached at the CPA firm’s Miami office at (305) 379-7000 or at info@bpbcpa.com.