On Saturday, July 4, President Trump signed a bill extending the deadline to apply for a Paycheck Protection Program (PPP) loan from June 30 until August 8.
In addition, on June 18, 2020, Democrat Senators Ben Cardin, Chris Coons, and Jeanne Shaheen introduced the “Prioritized Paycheck Protection Program (P4) Act,” which would extend the June 30 deadline to December 30 or longer to apply for a forgivable PPP loan, while creating a new option for a second loan for borrowers with 100 employees or fewer that have lost at least half of their revenue due to the pandemic.
A companion bill was introduced by House Democrat Representatives Angie Craig and Antonio Delgado. The bill, in its current form, includes the following provisions:
- P4 loans, a subset of the PPP, would be for borrowers that are self-employed or have 100 or fewer employees that have demonstrated a revenue loss of 50% or more due to the pandemic compared to a relevant period. To qualify, borrowers must have fully used an initial PPP loan or be on pace to use up their initial loan proceeds.
- P4 loans may be as large as 2.5 times monthly payroll costs, as was the case for the initial PPP loans, but may not be larger than $2 million.
- P4 loans would allow borrowers to apply for forgiveness as early as eight weeks after the loan is disbursed rather than waiting until the earlier of 24 week after disbursement or December 31, 2020, minimizing the cost of the loan by reducing the amount of interest that would accrue prior to loan forgiveness.
- P4 loans would not be available to publicly traded companies.
- The same terms, conditions, and forgiveness criteria as initial PPP loans are applicable unless otherwise mentioned.
- The lessor of $25 billion or 20% of PPP funds is reserved for employers with ten or fewer employees to increase P4 assistance to underserved and rural businesses, and priority processing would be provided for those borrowers.
Takeaways: Businesses that have not yet applied for a PPP loan now have until August 8 to apply—a deadline that could be further extended if the Prioritized Paycheck Protection Program (P4) Act or similar legislation is enacted.
Need help? Please give us a call today to discuss how we can help you and your business be prepared. Contact Allison Kierman at 480.719.7333 or visit Kierman Law, PLC at www.kiermanlaw.com.