The PPP [Paycheck Protection Program] is NOT paycheck protection anymore. It is now a grant to small business to get the economy going.
That is basically the effect of recent legislation.
Many small businesses – INCLUDING sole proprietorships and partnerships that don’t have payroll – probably didn’t realize that they qualify.
Therefore, Congress JUST extended the application deadline to August 8. They want to give FREE money to those businesses that previously failed to apply.
And that is because the US Government still has $130 billion of left-over PPP [Paycheck Protection Program] funds to distribute.
The money is a ‘grant’ that doesn’t have to be paid back because it is still forgivable if spent by December 31.
And recent legislation provides almost a no-doubt “slam-dunk” 100% forgiveness of the debt.
And, obviously, businesses can spread the payment of payroll over the 24 weeks – or sole proprietor or partnership draws if you have no employees -- providing more flexibility and opportunity to productively employ workers and spur the economy.
The other main factor is that only 60% [instead of the previous 75%] of your payouts of the PPP loan money must go to payroll/sole proprietor draws (not counting payroll taxes).
NO PENALTY: Businesses may also defer federal payroll tax payments over the next 2 years without penalty. Therefore, there should be no tax notice from the IRS for any payment of 2020 federal payroll tax that may have been issued ‘late’.
BTW—we’ve assisted numerous small businesses with this application for a nominal fee, as well as the EIDL. We’re here to help, and to answer your questions.
P.S. Yes, as previously announced, the EIDL is again open to everyone for a guaranteed low interest loan with a long term payback.