PPP Adds Flexibility, Federal Reserve Creates COVID-19 Relief Program
By Colin McEvoy on June 22, 2020
The deadline for the second round of the U.S. Small Business Administration (SBA)’s Paycheck Protection Program (PPP) financing is approaching, but changes have been made in recent weeks to simplify the process and add more flexibility for businesses seeking emergency COVID-19 relief loans.
The SBA, along with the U.S. Department of the Treasury, have released a revised, user-friendly PPP loan forgiveness application, also known as the “EZ Forgiveness Application.”
The application, which can be found here, requires fewer calculations and less documentation, which is designed to make the PPP application process less intimidating and more streamlined for small businesses seeking loans during the coronavirus pandemic.
“I’m sure this will go a long way toward improving access and helping us distribute the remaining PPP appropriations to support small business owners and their employees,” said SBA Regional Administrator Steve Bulger, who oversees agency operations in the Atlantic and Mid-Atlantic regions.
The SBA will continue to accept PPP applications through June 30.
The SBA and Treasury Department also recently agreed agreed with the leaders of the U.S. Senate Small Business Committee to make public additional data regarding PPP, to ensure the interests of both transparency and protections for small businesses are served.
“We are striking the appropriate balance of providing public transparency, while protecting the payroll and personal income information of small businesses, sole proprietors, and independent contractors,” said Treasury Secretary Steven T. Mnuchin.
The Lehigh Valley Economic Development Corporation (LVEDC) has been helping connect regional small businesses with emergency financing and information about available COVID-19 relief programs, including PPP. The organization also works actively with Lehigh University’s Small Business Development Center to connect businesses with PPP funding.
“It is crucial for companies that have closed or suffered revenue losses to find working capital to help create a financial bridge until they are cleared to operate again,” said LVEDC President & CEO Don Cunningham. “We’re working diligently to ensure the business community is aware of the resources available so they can get the financing they need during this difficult time.”
LVEDC previously submitted 26 loan applications on behalf of Lehigh Valley companies to the Pennsylvania Industrial Development Authority’s COVID-19 Working Capital Access Program (CWCA). The loan requests totaled $2.3 million in loan financing.
LVEDC has also been keeping companies informed about various other financing programs and options, including the Federal Reserve’s Main Street Program, which is designed to help credit flow to small businesses that were in sound financial condition before the pandemic but now face cash flow interruptions.
The program offers five-year loans of $250,000 to $3,000,000 with floating rates and principal payments deferred for two years and interest payments deferred for one year.
Visit here for more information about this and other financing programs, and visit lehighvalley.org/covid19 for other information and resources available to Lehigh Valley businesses during the coronavirus pandemic.
In April, Congress approved an additional $310 billion for PPP, a program of the federal CARES Act, to provide funding for job retention and other small business expenses.
Earlier this month, Congress approved changes to the PPP program allowing companies more flexibility in spending their loans. The changes extend the time period of use for the loan from 8 weeks to 24 weeks, and lowered the minimum percentage of funds borrowers must spend on payroll costs from 75% to 60%.
Additionally, the changes extended the deadline to rehire workers from June 30 to Dec. 31, lengthened the term of the loan from two years to five years, and allowed the deferral of employment tax deposits and payments for companies that receive loan forgiveness.
Lehigh University Team Working on Project to Disrupt Spread of Coronavirus
A team of Lehigh University professors is working on a project to develop new technology they hope will disrupt the spread of the coronavirus, and continue to have broader[...]Continue to Next Page