President, Congress Extend Application Period for PPP Loans

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On July 4, President Trump signed into law a bill extending the period during which borrowers can apply for paycheck protection program (“PPP”) loans from June 30 to August 8.  The PPP loan program is part of the governmental response to the adverse economic impact of the COVID-19 pandemic upon small businesses.  While the initial $349 billion of funding for the program was quickly claimed, Congress had previously appropriated additional funds for PPP loans and approximately $130 billion remains available.   Eligible borrowers that have not yet obtained a PPP loan may apply through their bank (or other financial institution).  These loans are forgivable, at least in part, so long as the proceeds are used to fund employees’ wages and to pay certain other allowable business expenses, such as rents, mortgage interest and utilities.  Despite this attractive feature, borrowers should consider that the Small Business Administration and the U.S. Department of Treasury continue to engage in rulemaking regarding these PPP loans, and these rulemaking efforts have often left borrowers confused as to how their PPP loan proceeds may be spent, particularly in order to maximize forgiveness.  If you have not yet applied for a PPP loan, we are happy to discuss whether a PPP loan may be an available and useful tool as you navigate these uncertain economic times.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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