Paycheck Protection Program

The Paycheck Protection Program

About the Act 

The paycheck protection program provides small businesses with the resources they need to maintain their payroll, hire back employees that may have been laid off, and cover applicable overhead. It is a federal relief program intended to provide small businesses with forgivable loans to keep workers employed during the COVID-19 crisis.

The Paycheck Protection Program Flexibility Act recently passed the Senate and House of Representatives and President Trump is expected to sign the act to law.

This act would make numerous technical changes to the Paycheck Protection Program loans.

On May 28, the House of Representatives passed the Paycheck Protection Flexibility Act (H.R. 7010) by a vote of 417-1. This bill was introduced by Congressmen Dean Phillips (D-MN) and Chip Roy (R-TX). This bill was signed into law by President Trump on June 5th.

This act would make numerous technical changes to the Paycheck Protection Program loans. For instance, it will be easier for current PPP borrowers to use the loans and receive forgiveness. Initially, borrowers had eight weeks to spend PPP funds, and only 25% of those dollars could go to non-payroll costs. Now, it will allow borrowers 24 weeks to use the funds and for up to 40% of loan funds for non-payroll costs. After the period is over, you can keep the money they gave you as a low-interest loan that you start paying back at the beginning of 2021 and you can use that money to help fund your business. They are trying to build it so you do get forgiveness. Anyone who is below $2 million is free from audit but those above will be audited.

This was established by the CARES Act and was implemented by the Small Businesses Administration with support from the Department of Treasury

The Program provides small businesses with funds to pay up to eight weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities

It prioritizes millions of Americans employed by small businesses by authorizing up to $659 billion toward job retention and certain other expenses

The new bill provides $30 billion specifically for community lenders, small banks and credit unions. An additional $30 billion will be allocated for medium-sized banks and credit unions.

Who Qualifies?

Small businesses, with 500 or fewer employees, and eligible nonprofit organizations, Veteran organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards. Small businesses in the hotel and food services industries, and that are franchise according to the SBA’s guidelines, may qualify if they have more than 500 employees. One loan will be granted per business, and a taxpayer identification number (TIN) is required to apply.


Both the Senate and the House have voted on and approved an additional coronavirus relief package, which provides $310 billion more in funding for the Paycheck Protection program. The program ran out of the initial $349 billion the federal government earmarked for it in 13 days.

The Senate Democrats have proposed legislation that would allow small businesses to take out a second PPP loan if they have 100 or fewer employees.

The House of Representatives passed a bill extending the timeline into next month for small businesses to apply for forgivable loans, building on a surprise vote in the Senate a day earlier.



Sophia Tuszynski is a rising senior at Furman University studying Politics and International Affairs with a minor in Women’s, Gender and Sexuality Studies. At Furman University, Sophia is involved in organizations which are Alpha Delta Pi, the Pre-Law Society, and CHAARG. Outside of school, she is a member of the ASPCA, PETA, and the Humane Society. Her passions include politics, human rights and animal rights. After graduating from Furman University, Sophia hopes to pursue a law degree and provide a voice to the voiceless.

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