With $129 billion left under the Paycheck Protection Program (PPP), lawmakers extended the application deadline through August 8, 2020. As of July 1, 2020, the House and Senate passed the extension, and the President is expected to sign it in the coming days.

The PPP loans have provided more than $520 billion in emergency aid to businesses with fewer than 500 employees across the country. Competitive loan forgiveness options allow borrowers the flexibility to avoid layoffs and the ability to operate at pre-COVID capacity. Since its inception, changes and updates have become the hallmark of the PPP, now including the PPFA.

Additional new legislation, Prioritized Paycheck Protection Program Act (P4), would offer another round of forgivable loans to smaller businesses. If passed, P4 would extend PPP loan applications through December 30, 2020, and would provide a second round of funding to companies with fewer than 100 employees. Businesses in underserved and rural communities would have 20 percent of the PPP funds reserved for them, or about $25 billion. As Congress heads into a two-week recess, no additional movement is expected on this in the short term.

The P4 Act is intended to provide targeted relief to small businesses that have already used their PPP funds and are still struggling due to the COVID-19 pandemic. Companies would need to show a 50% loss of revenue to qualify. Large, public companies will be ineligible for this loan, and small business applications will be prioritized for processing and disbursement to ensure the most urgent financial needs are met.

The Aldrich team is closely monitoring the PPP, PPFA, and P4 landscape. We’ll continue to post updates to our COVID-19 Resource Center as they become available. If you have questions about the PPP or how to take advantage of federal relief, please contact your advisor.