The Paycheck Protection Program has been given new life just ahead of the “use it, or pay it back” deadline for the small business loans.
Small business loan program extended
Part of the economic response to the coronavirus pandemic, the Paycheck Protection Program offered businesses no-payback loans to cover eight weeks of payroll and other select expenses. Provided 75% of the money went to payroll and the other 25% to things like rent and utilities, business owners didn’t have to pay the money back. Money spent outside those parameters has to be paid back at 0.5% interest within five years.
But the money had to be spent within eight weeks of the program’s creation. Time was going to run out Friday. The Senate on Wednesday extended the period for using the loans to 24 weeks. Lawmakers also allowed PPP borrowers to defer payroll taxes through the end of 2020.
The new terms passed out of the Senate on Tuesday.
U.S. Sen. Steve Daines, a Republican co-sponsor of the Paycheck Protection Program changes, said many Montana businesses were shut down for up to half of the eight-week period in which PPP money had to be spent. Without the 24-week extension, the program wasn’t going to work for many businesses. There was also a deadline of June 30, by which businesses had to hire employees back. That deadline has been extended to the end of the year.
U.S. Sen. Jon Tester, a Democrat, also supported the changes to the program.
Montana businesses borrowed more than $1.73 billion in PPP loans, according to the U.S. Small Business Administration. As the program went on, changes were made to make it more workable for lenders and borrowers, including credit unions, nonprofit lenders and banks.
By: Tom Lutey
Source: Billings Gazette
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