June 4, 2020 | By: LendVer Staff –
The House recently approved a bill to increase the flexibility of the Paycheck Protection Program (PPP), and yesterday (June 3, 2020) the Senate passed the bill with little opposition. Next, the bill will go to the President to sign into law, and once that occurs the remaining $100 billion of PPP funding will likely go quickly. Outlined below is an overview of the key improvements of the new PPP Flexibility Act:
Key PPP Improvements
Certain positive provisions of the original PPP have remained, such as the 1% interest rate, no personal guarantee or collateral requirement, and no application or loan fees charged to the borrower. The full text of the bill is here, but a few of the key changes are as follows:
- The “covered period” for forgiveness related to the loan funds has been increased from eight (8) weeks to twenty-four (24) weeks.
- Forgivable expenses that are not “payroll costs,” including rent, utilities, mortgage payments, and other interest, are now permitted to amount to up to forty percent (40%) of the forgivable amount, an increase from twenty-five percent (25%) under the original PPP.
- The deferral on payments has been extended from six (6) months to twelve (12) months.
- All new PPP loans originated after the enactment shall have a five (5) year maturity, an increase from two (2) years under the original PPP. Lenders shall have the ability to modify the existing loan terms to increase the maturity to five (5) years.
Where to Get a PPP Loan
If you would like to signup to secure your spot for the next round of PPP loans, and have access to an easy, automated application process, then the below PPP lender is an excellent option (the PPP expired on August 8, 2020 and further legislation will hopefully be approved to extend the program) .
The Loan Source is one of only 14 non-bank lenders approved by the Small Business Administration (SBA) to provide SBA loans, and has opened its PPP loan waitlist in anticipation of Congress approving an extension to the program. The Loan Source is part of the selective SBA Preferred Lender Program, which is the highest level of approval status that a lender can receive from the SBA. This status enables a lender to directly approve SBA loans, without having to wait for SBA sign-off. The Loan Source was one of the leaders during the first rounds of the Paycheck Protection Program, originating over 5,000 PPP loans totaling in excess of $500 million. Since The Loan Source is not a bank, it does not require an existing relationship, or that you open up an account or transfer funds or other business services to receive a PPP loan. Those businesses interested in applying for a first or second PPP loan once Congress approves an extension to the PPP program, should contact The Loan Source.
The relaxed PPP guidelines and forgiveness parameters that will likely be signed into law soon, have greatly improved the appeal of the program for existing PPP loan holders and those contemplating applying for a PPP loan. Although the demand for PPP loans has been languishing, this new legislation will likely accelerate the depletion of the remaining program funds. The more flexible provisions of this new bill will add a much needed boost to help small business owners survive the current economic conditions.
Don’t hesitate to contact us if you are unsure of which financing option is the right choice for you, or if you need additional lender recommendations beyond those mentioned in this article.