Just days before the Paycheck Protection Program was set to run out on March 31, President Biden extended this vital program. Now, the program will accept applications through December 31, 2021. This is welcome news for small business throughout the US. But what exactly does this mean for small businesses that are still struggling during this year-plus pandemic?
Firstly, nonprofit organizations and small businesses, including agricultural businesses, in the US or its territories are eligible for this shot of financial relief. The goal is help these businesses that have experienced a temporary loss of revenue during the global pandemic through low-interest loans with a repayment timeline of up to 30 years.
What can I use Paycheck Protection Program for?
Under the Paycheck Protection Plan, funds may provide assistance small businesses and nonprofits to help with:
- Working capital.
- Normal operating expenses.
However, it’s important to note that “operating expenses” covers most areas of business! These include:
- Fixed debt payments
- Health care benefits.
How much is available under the PPP?
Starting the week of April 6, loans up to a maximum of $500,000 are available to use for 24 months of economic injury. However, interest rates differ for nonprofit organization and small businesses. But, these loans use fixed interest rates and that’s great news! This means that over the term of the loan, repayment won’t increase from rising interest rates. In addition, there are no fees or penalties for early loan repayment.
So is my business eligible to apply to the Paycheck Protection Plan?
The federal government has certain requirements in order for businesses and nonprofits to be eligible for this program. These are:
- Nonprofits or businesses suffered working capital losses due to the Coronavirus pandemic.
- Businesses with 500 or fewer employees or defined as small per the Small Business Administration Size Standards.
- Cooperatives with 500 or fewer employees
- Agricultural enterprises with 500 or fewer employees
- Most private nonprofits
- Faith-based organizations
- Sole proprietorships and independent contractors
Now Agricultural Businesses Are Eligible, Too
In earlier PPP rounds, agricultural businesses were not among eligible businesses. However, now they are. But, for agricultural businesses to be eligible they must:
- Have 500 or fewer employees
- Be engaged in the production of food and fiber, ranching, raising of livestock, or aquaculture.
- Be involved in all other farming- and agricultural-related industries, as defined by section 18(b) of the Small Business Act (15 U.S.C. 647(b).
- Not be engaged in illegal activities, loan packaging, speculation, multi-level sales distribution, gambling, investment or lending.
For more information on this Paycheck Protection Program extension or any of the over 900 COVID-19-related grants listed on GrantWatch.com, feel free to contact our customer support team. And, you can use our convenient contact form or call our team at (561) 249-4129.