Paycheck Protection Program (PPP) Ended Saturday, With No Extension In Sight
1% loans in exchange for not firing workers were very popular and drew millions of applications from small businesses
August 9, 2020
The program that the US Congress set up to loan as much as 1.3 trillion to small businesses, appears to be ending on Saturday, August 8th. The end of the Paycheck Protection Program (PPP) has not been much discussed. Congress could extend it, but with an apparent deadlock over the $600 weekly unemployment benefit extension, that appears unlikely for now.
President Donald J. Trump extended several other Covid-19 relief programs by executive order on Saturday. Unemployment claims, for example, were subject to a $400 a week Federal boost. But the PPP was not extended, at least not by Trumpian decree on Saturday.
Lending resources such as http://www.lendio.com, http://www.fundbox.com, and http://www.bluevine.com, have notices like the following: "The Paycheck Protection Program is scheduled to end on August 8, 2020. While Lendio will be taking applications through August 8, 2020, due to limited lender resources, we cannot guarantee we will be able to find a lender for your application in these final days." This from Lendio.
Lendio, Fundbox and Bluevine are not lenders themselves, but accept applications from small businesses and then refer them to banks and other institutional lenders.
The PPP loan program lends up to 2.5 times a businesses monthly wages, as reflected on their IRS Schedule C. The interest rate is 1%, and there is an understanding that most of the lent amounts will be forgiven if workers are not terminated by the small businesses.
The PPP program was approved in April 2020, to relieve some of the economic downturn caused by the worldwide Covonavirus pandemic. Covid-19 has not ended, but the lockdowns in most US jurisdictions have eased.