A rescue plan especially for you

  • All small businesses — including non-profit organisations, veterans organisations, tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors — with 500 or fewer employees can apply. Businesses in certain industries with more than 500 employees may apply if they meet the applicable SBA employee-based size standards
  • The loan has a maturity of two years and an interest rate of 1%
  • No loan repayment required for the first six months
  • No collateral or personal guarantees required
  • The loan covers expenses for eight weeks starting from the loan origination date (if the obligations began before 15 February 2020)
  • The loan can be forgiven and essentially be turned into a non-taxable grant
  • No prepayment penalties or fees
  • Messy rollout
  • Banks’ concern about whether due diligence has been conducted and likely fraud/default
  • Lending limits
  • Non-SBA partners were largely non-starters
  • Systems have been overloaded
  • The PPP Flexibility Act amends the PPP to give borrowers more time to spend loan funds and still obtain forgiveness
  • Borrowers now have 24 weeks to spend loan proceeds, up from 8 weeks
  • The Act also reduces mandatory payroll spending from 75% to 60%
  • The two new exceptions let borrowers obtain full forgiveness even without fully restoring their workforce
  • Time to pay off the loan has been extended to five years from the original two
  • The Act now allows businesses to delay paying payroll taxes even if they have taken a PPP loan

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Acuity Knowledge Partners

Acuity Knowledge Partners

We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/