NEW YORK – Small businesses can still get help from the government’s coronavirus relief plan after Congress extended the Paycheck Protection Program until Aug. 8.
The program that was set to expire Tuesday still has nearly $132 billion left after giving out more than 4.8 million loans since it began April 3. Loan recipients included companies as varied as restaurants, dental offices, retailers, construction companies and manufacturers that were devastated by the virus and shutdown orders that state and local governments issued in hopes of containing it. Nonprofit organizations were also eligible.
The House gave final approval to the program's extension last week. President Donald Trump signed it over the weekend.
The PPP is part of a $2 trillion coronavirus aid package passed by Congress in March. On Monday, the Small Business Administration, which oversees the program, disclosed the names of companies that received loans of more than $150,000. They accounted for less than 15% of the loans.
Some questions and answers about the PPP:
WHAT DOES THE PPP AIM TO DO?
The program aims to motivate small businesses to retain their employees or, if they have laid them off, get them back to work. The primary incentive for companies to seek PPP loans is the offer of forgiveness if most of the money — originally 75% but later revised to 60% — is used for payroll. Businesses can borrow up to $10 million based on their payroll costs; the loans carry a 1% interest rate and deferred payments for six months. Owners can also use the money for rent, mortgage interest and insurance. If businesses cut jobs or employees’ pay, they’d have to repay some of the money.
HOW DO COMPANIES GET FORGIVENESS?