By: Ashleen Sahni
New proposed legislation may allow business owners in the United States to take out a second Paycheck Protection Program (PPP) loan. The Prioritized Paycheck Protection Program (P4) Act is geared toward businesses with 100 or fewer employees who have used up or will soon finish the funds from their first PPP loan and who also have lost 50% or more revenue due to the coronavirus (COVID-19) pandemic. The bill would also extend the loan application deadline for businesses from June 30 to Dec. 31, 2020. The P4 Act has support from both political parties.
Eligibility and Funding for the Prioritized Paycheck Protection Program (P4) Act
The P4 Act is designed to provide additional support to small US businesses as the COVID-19 shutdown has lasted longer than originally anticipated.
If the legislation passes in Congress, it will set aside the lesser of $25 billion or 20% of PPP funds for businesses with fewer than 10 employees and businesses based in rural or underserved communities.
Under the P4 Act, publicly traded companies would not be eligible for a second PPP loan. Additionally, hospitality and lodging companies would have access to a maximum aggregate loan amount of $2 million.
Details on PPP Loans
After being approved for multiple rounds of funding, PPP loans have helped small businesses impacted by the COVID-19 pandemic to continue to pay their workers and cover other operating expenses.
If businesses follow forgiveness guidelines, PPP loans can be partially or fully forgiven. With the PPP Flexibility Act, the US government relaxed PPP loan forgiveness rules, making it easier for small businesses to get their loans forgiven.
For help applying for a PPP loan or understanding changing loan forgiveness guidelines, please contact your Chugh CPAs, LLP professional. We will continue to monitor the situation and provide updates on the Prioritized Paycheck Protection Program (P4) Act as they are available.