Paycheck Protection Program loans are still available to small businesses struggling with the economic downturn caused by COVID-19.
Since its start on April 3, the Paycheck Protection Program has delivered more than 3.8 million loans to small businesses through two rounds of lending. The first round depleted its funds in 14 days and was bolstered by an additional $300 billion in small business loan assistance.
Since the second round of loans became available April 27, roughly 2.2 million loans totaling $175 billion have been issued to small businesses, according to the Small Business Administration (SBA).
More than 70 percent of the loans issued in the second round have been for $50,000 or less. The average loan size since April 27 is roughly $79,000, the SBA reports.
Currently, more than $120 billion in potentially forgivable loans are still available to small businesses, according to SBA data.
Though the program has proved popular, some argue ambiguity in loan definitions could pose trouble for business owners. Additionally, The New York Times reports some banks and borrowers are pushing the U.S. Treasury Department to “make forgiveness requirements easier to meet.”
Writing for Forbes, columnist Alan Gassman says some business owners could face unexpected repercussions from the program, including fines and imprisonment.
He describes the confusion regarding what constitutes a necessary loan, which “puts thousands of businesses in a quandary as to whether they should keep or receive PPP loan money to save their business, or give it back to reduce possible investigation and punishment,” writes Gassman.
For more information, visit the SBA’s Paycheck Protection Program FAQ. For insight into how the Paycheck Protection Program and other SBA economic injury loans could impact your business, Hardware Retailing recommends speaking directly with your personal financial and legal advisers.