The PPP (Paycheck Protection Program) sprang from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $350-billion program aimed at giving eight weeks of cash flow aid to American small businesses. The Paycheck Protection Program and Health Care Enhancement Act of late April 2020 extended the program by adding an extra $310 billion in financing and giving businesses more time to spend the cash.
The American Rescue Plan Act of 2021 (“ARP Act”) was signed into law on March 11, 2021, and an extra $7.25 billion was made aside for PPP Loans alone. The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “Economic Aid Act” or “PPP2 Act”) was previously approved on December 27, 2020. This was a part of the Consolidated Appropriations Act, 2021 (“2021 Appropriations Act”). Several modifications to forgiveness procedures and processes were introduced in the PPP2 Act and the 2021 Appropriations Act, and the Economic Aid Act made up $284 billion for PPP loans, both new First Draw and Second Draw PPP Loans.
With all of these facts regarding the PPP (Paycheck Protection Program) in the past, what are the actually positive benefits for very small businesses? (Micro Businesses)
Because 98 percent of small businesses in the United States have fewer than 20 employees, the federal government decided that micro businesses should benefit the most from the PPP. As a result, the federal government launched the PPP on February 24th and ran it for two weeks, giving priority to micro businesses (fewer than 20 employees) and sole proprietor individuals and assisting them in getting the most out of it, many individuals who were eligible and had the opportunity missed out because they were not kept up to date or were unaware of the possibility.
“With an average business size of just 20 people, PPP saved up to 55 million jobs, including up to 4.5 million in manufacturing,” stated by Marco Rubio (former Chairman of the Senate Small Business and Entrepreneurship Committee).
The PPP (Paycheck Protection Program) “offered small companies and their employees a fighting chance to survive the coronavirus pandemic,” according to Marco Rubio (former Chairman of the Senate Small Business and Entrepreneurship Committee). In the year 2020.
The PPP which ran from April 3 through August 8 alone offered $525 billion in government-guaranteed, forgiving loans (basically handouts) to firms with 500 or fewer employees, accounting for 47% of private-sector employment. Beneficiaries were expected to spend 60% of their loan on payrolls.
When we consider all of these measures taken expressly with the goal of keeping small businesses afloat, as well as the advantages that PPP has provided in the past, we can clearly see the use of PPP for small businesses and the huge beneficial influence that it can have.
However, the question to which many people are seeking an answer is ” How much money is left in the PPP program as of today 2021″, and the answer to that question is ” Nearly All Gone: Only $8 billion remains available.” Source: CBS News, April 6, 2021.
Learn more about PPP and the Small Business Assocation here.