Growth and Operations

Reconsider the Paycheck Protection Program for Your Small Business

Updated: June 11th, 2020

Reconsider the Paycheck Protection Program for Your Small Business

With states relaxing their shelter-in-place regulations, we see our small business friends are slowly beginning to reopen. While this is progress, it does not mean the fight to keep our businesses alive is anywhere near over! 

Thanks to the bipartisan efforts of Congress and the House, President Donald Trump signed a bill on Friday, June 5, to give recipients of PPP loans during the coronavirus pandemic more flexible terms when it comes to repayment and forgiveness.

This act of solidarity shows their commitment to the thousands upon thousands of small businesses that are the very make-up of the American economy and, even in these unprecedented times, continue to keep our communities running.

Obtaining funding during this time is an inevitability. And we realize with the rocky roll-out of the Paycheck Protection Program, during the initial stages of the COVID-19 crisis, some small businesses decided that they weren’t going to apply or didn’t have a chance to apply before that first round of funds ran out.

Lawmakers put another $310 billion into the PPP. There are literally BILLIONS left for: 

-the thousands of small business owners who had to make the tough choice to let go of their teams 

-the small business owners that are finding it nearly impossible to keep up with rent, utilities, and other expenses

-all of the small business owners that need to rehire their staff as they are allowed to reopen

The Paycheck Protection Program (PPP) Flexibility Act addresses many of the concerns of why some small business owners chose not to partake in the Paycheck Protection Program in the first place. Small businesses have been calling for these amendments to the PPP to ensure their businesses survive, and it is a triumph for the country. 

A quick run-down on the PPP Flexibility Act: 

  • Extended 24 week claim period: The 8 week expense forgiveness period has been extended to 24 weeks. Borrowers will now have 24 weeks from when they first received PPP funds to use them for forgivable purposes or until December 31, 2020, whichever comes earlier. If your loan was funded before June 5, 2020, you may elect to use the original covered period, which was the period from the date your loan was funded until the end of 8-weeks from that date.
  • 60% payroll ratio: The 75% payroll ratio requirement has been reduced to 60%. This means that in order to be eligible for a fully forgiven loan, no more than 40% of the loan forgiveness amount can be attributed to non-payroll forgivable costs.
  • December 31 rehiring deadline: The June 30, 2020 rehiring deadline to avoid reductions in forgiveness amounts for reductions in full-time employee headcount during the 24-week covered period has been extended to December 31, 2020.
  • Extended payment deferral period:The 6 month payment deferral grace period has been extended until the date on which the forgivable amount of the PPP loan is paid to the lender (with exceptions if you fail to apply for forgiveness by the date that occurs 10 months after the end of the 24-week covered period).
  • 5-year loan term: The loan term length has been extended from 2 years to 5 years for loans made on or after June 5, 2020.
  • Payroll tax deferment: PPP loan recipients will now be able to defer certain payroll taxes. 

These changes provide you extra flexibility to use your loan funds and fuel your business. It is important to note that while the PPP Flexibility Act purports to extend the PPP to December 31, 2020, media reports indicate that Congress has informed SBA that this provision was a technical error, so that extension is unlikely to be enforced. For the best chance of getting processed by the SBA, please complete your application and submit documents as soon as possible to meet the original June 30, 2020, deadline! 

Funding Circle has been approved by the SBA to issue the Paycheck Protection Program (PPP) loans, and we are working around the clock, accepting new applications!

If you have not applied for a PPP loan yet, WHY NOT?!

Apply now! 

All PPP loans are the same. All lenders are not. 

Here’s how we’re different:

  • Dedicated Account Manager. You’ll be assigned your own personal account manager who will work to understand your goals, explain your options, walk you through our process and find the best terms to suit your needs.
  • Multi-language support. Get support in English, Spanish, Mandarin, or Hindi.
  • Signatory of the Small Business Borrower Bill of Rights. Funding Circle is proud to be a founding member of the Small Business Borrower Bill of Rights, the small business lending industry gold standard of lending practices.
  • Quick application. The online application takes less than 8 minutes.
  • Fast, end-to-end support. After completing the initial online application, your dedicated Account Manager will reach out to complete your application packet. They will help gather supporting documents and submit your application to the SBA.

Apply now! 

The Paycheck Protection Program (PPP) offers forgivable, federally guaranteed small business loans that can cover payroll and operating expenses for those impacted by COVID-19. The SBA PPP program has the following terms:

  • 1.00% flat interest rate.
  • Borrow up to 250% of your average monthly payroll 
  • Payment deferral until the date on which the forgivable amount of the PPP loan is paid to the lender (with exceptions if you fail to apply for forgiveness by the date that occurs 10 months after the end of the 24-week covered period).
  • No collateral or personal guarantees.
  • Loan forgiveness of up to 100% of the principal amount to cover payroll and other operating expenses, learn more about forgiveness and the PPP here

We recommend applying now to meet the original June 30 deadline which is right around the corner. Our sources in Washington have said they do not anticipate the cutoff to change. 

Let us do the heavy-lifting so you can continue to focus on your business.

Apply now! 

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