A recently passed bill in the House of Representatives has many small business owners breathing a sigh of relief. This new legislation, the Paycheck Protection Program Flexibility Act, addressed concerns expressed by entrepreneurs across the country.
These business owners have been adamant that changes needed to be made around loan forgiveness – one of the main attractions of the Paycheck Protection Program (PPP). The PPP was initially created by the CARES Act, the $2.2 trillion coronavirus relief law. In early April, forgivable loans were first issued through this Act to small business owners struggling to stay afloat during the current crisis.
However, small business owners began to quickly run into a new set of problems: flexibility and payroll. This new bill provides a new solution for both. It not only extends the length of time businesses have to use the loans (from 8 weeks to 24 week), but also pushes back the June 30 deadline to rehire workers. The original 8 week time frame was simply too short for most businesses, as many still sit idle.
The bill also provides much-needed flexibility by reducing the share of funding that must be directed toward payroll costs from 75 percent to 60 percent. The original PPP terms required that 75 percent of funds to be used for payroll costs (the remainder could be used for other expenses like rent, mortgage, utilities, etc.). This was one of the top concerns for business owners who received a PPP loan; they expressed the issue of being unable to use their funds in a way that would be consistent with current loan-forgiveness rules.
“The [legislation] grants small-business owners urgently needed flexibility by extending the loan forgiveness period and reducing the payroll limitation of the program,” says Kevin Kuhlman, vice president of government relations at the National Federation of Independent Business, a trade group.
Small Business Owners Still in Need of Business Funding
The PPP loans have not helped all small businesses. Many small business owners have yet to receive any funding. Meanwhile, many of those who have received PPP loans according to the original forgiveness terms have likely nearly depleted their funding. This is where alternative providers like firstamericanmerchant.com can help.
FAM provides flexible business funding that allow business owners to avoid strict credit requirements, long wait times for funding, complicated contracts and extensive documentation. Your business can receive the funds it needs in as little as 72 hours, securing the cash it needs to cover expenses and payroll during these difficult times while also avoiding fixed monthly payments.
Get the flexible business funding you need to navigate these uncertain times and ensure your business’ long-term success.