Congress’ Flexibility Act will lessen restrictions on SBA’s Paycheck Protection loan program


CLARKSBURG, W.Va. — The Small Business Administration’s Paycheck Protection Program will see changes due to the passage of the program’s Flexibility Act, which passed Friday.

Steve Bulger

According to the SBA’s Regional Administrator Steve Bulger, companies seeking to have their loans forgiven will now have an easier time doing so due a change in the amount of time businesses have to use their funds and being less restrictive on what the loan proceeds will need to be used on.

Instead of the original eight weeks that businesses had to spend their PPP funds, businesses have now been given 24 weeks to spend that same amount of money, Bulger said.

The amount of money businesses had to spend on payroll and benefits has also become less restrictive, which means that the 75% of the money businesses used to have to spend their loan on payroll and non-cash benefits, has gone down to 60%, Bulger said.

“It will make it easier for small businesses to get forgiveness on their Paycheck Protection loan because there’s more flexibility in how they spend the money and its a longer time frame with which to do so.”

SBA Regional Administrator Steve Bulger

According to Bulger, this will allow smaller businesses and restaurants to benefit more from the PPP loans because they can now spend money on rent, utilities and mortgages, which will allow employers to spend more on fixed-cost areas.

The change affects all businesses which have received loans through the PPP program and businesses will not have to reapply in order to receive these new benefits, according to Bulger.

“All these changes go back to the very start of the program, the first day was April 3. So any Paycheck Protection loan now falls under these guidelines of 24 weeks and 60%. And that is something that a lot of businesses were advocating for, we’re happy that we got that feedback and congress listened and made the changes. So we think a good program will be even better.”

SBA Regional Administrator Steve Bulger

Also, the program still has more than $100 billion left, but June 30 is the last day applications can be filed for businesses to receive PPP, Bulger said, and that as of Saturday, West Virginia had 16,529 businesses receiving $1.77 billion dollars; nationwide 4.5 million businesses have received $510 billion.

The loan applications have slowed down a lot since early May because, Bulger said, that most of the businesses who wanted a loan have no received one. According to the NFIB, about three-fourths of all small businesses with employees across the country have gotten a PPP loan.

“It’s been the most successful and popular small business loan program in our nation’s history, by far.”

SBA Regional Administrator Steve Bulger

As a result of the PPP allowing companies to keep their employees on the job and paid as a part of this program, Bulger said, a lot of economists are stating that good job numbers coming out in the past few weeks are a result of that program.

Any unused money is not yet earmarked for any programs or other funding, and Bulger said that once the application process is over and all funds are dispersed, congress and President Donald Trump will decide how that money will be used, though Bulger said that he thinks it will go to small businesses in some way.

Churches and faith-based organizations are also able to use the PPP funds, as well as nonprofit organizations, according to Bulger, though the SBA doesn’t have the exact number of those types organizations which have received loan funding.

For businesses that do not reach the 60% of payroll/benefit funding or don’t spend the money within the 24-month period, the interest rate is fixed at 1% interest, Bulger said, and that all PPP loans from April 3 to June 4 carried a repayment period of 2 years.

However, for loans received after June 4, business have a 5 year period to pay off the funds and businesses which had received loans before that time will be able to work with their bank to request a 5 year repayment period, according to Bulger.

Also, if a business does spend less that 60% of their PPP fund, they can have the amount they spent on payroll forgiven and will only have to pay back the remainder of the funds, Bulger said.

“The two big points are forgiveness is now easier and we still have a lot of money left. And we just want to push out of much of this money out while it’s still there into the hands of our small businesses. I will say this, the lenders in West Virginia have been tremendous. They’ve done a great job across the state.”

SBA Regional Administrator Steve Bulger

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