Businesses with fewer than 20 employees have until 5:00 p.m. Tuesday to take advantage of a special window set aside for them to apply for Paycheck Protection Program (PPP) loans.
As part of the most recent changes to the COVID-19 relief program, the Small Business Administration (SBA) set aside an exclusive application period for small businesses during which only those with fewer than 20 employees would be permitted to apply.
SBA created the special application period hoping that eligible businesses would apply for either their first or second PPP loan.
As part of its continued effort to assist in the administration of PPP loans for Alabama small businesses, the banking industry has been running radio ads across the state urging participation in the program.
The Alabama Bankers Association, along with the American Bankers Association, has sponsored the ads, the content of which is as follows:
Is your small business still struggling because of COVID-19? America’s banks want to help. Banks of all sizes have thrown a financial lifeline to millions of small businesses by providing forgivable loans through the government’s Paycheck Protection Program. Your business could be next. Contact your bank or find a local PPP lender at aba.com/paycheck. That’s aba.com/paycheck. This message brought to you by the American Bankers Association and the Alabama Bankers Association.
After Tuesday’s deadline, the program’s original eligibility criteria resume. Businesses with fewer than 500 employees may apply for a first-time loan, while businesses with fewer than 300 employees may apply for a second loan. PPP is set to expire on March 31.
Funds may be spent over any period of time between eight and 24 weeks, and 60% of the money must be spent on maintaining payroll to receive full forgiveness. The interest rate is still 1%.
Additional SBA revisions to the program now allow sole proprietors to receive more funding. Under the updated regulations, independent contractors who file a Schedule C may calculate their maximum PPP loan amount using gross income rather than net profit.
A total of $1.77 billion in PPP funds have been loaned to 30,599 small businesses in Alabama this year, according to SBA.
Tim Howe is an owner of Yellowhammer Multimedia
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