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Paycheck Protection Program Application Period to Close after June 30

June 19, 2020


More than two (2) months have passed since federal aid programs were created to fund struggling businesses and individuals. The Paycheck Protection Program (“PPP”), a loan program under Section 7(a) of the Small Business Act and created by the Coronavirus Aid, Relief and Economic Securities Act (“CARES Act”), assists borrowers – individuals and businesses – in surviving the economic harm caused by the Covid-19 pandemic. Upon receipt of the PPP funds, the amount spent on payroll, mortgage interest, rent and utilities may be entirely forgiven.

As more businesses enter New York’s reopening phases and enhanced unemployment is set to expire in July, lending popularity has expanded once more as businesses and individuals seek to submit applications for PPP funds. However, the PPP officially closes to new applicants after June 30, 2020, meaning any interested individuals or business owners should apply as soon as possible to secure a spot in the federal aid program. As of June 12, 2020, only $136 billion of the original $649 billion in funding remained for distribution to approved individuals and businesses.


As aid programs like the PPP evolve, and billions of dollars in aid funding are dispersed to companies, rules and additional guidance continue to be released by the United States Small Business Administration. On June 5, 2020, Congress passed the PPP Flexibility Act of 2020 (“The Flexibility Act”) which made significant changes to the legislative text of the CARES Act by extending the time in which the funds can be used and reduced the amount of funding that needs to be spent on payroll, in addition to other provisions. The covered period over which a loan borrower may accumulate forgivable costs was extended from eight (8) weeks, to twenty-four (24) weeks. This extension still covers approximately eight (8) weeks of expenses, but what has changed is that those who receive this funding have a longer time period to spend the loan money. Essentially, borrowers have six (6) months to spend the PPP money, meaning that those individuals and businesses could potentially have until the end of 2020 to use the loan funds.

The U.S. Department of the Treasury, in coordination with the U.S. Small Business Administration (“SBA”), announced that The Flexibility Act permits borrowers to show that only 60% of PPP funds were dedicated to payroll, rather than the 75% required when the program was first initiated. Additionally, the SBA streamlined the process of qualifying and receiving PPP funding by creating a separate application form for certain applicants. Per the official announcement regarding the revised PPP application, “These changes will result in a more efficient process and make it easier for businesses to realize full forgiveness of their PPP loan”.

Other changes include: 40% of a borrower’s forgivable costs may be attributed to non-payroll costs. Additionally, the safe harbor for borrowers who cut headcount or salary throughout 2020 was also extended to December 31, 2020. Importantly, the stimulus programs have served 4.61 million American businesses.

Should you have any questions regarding your eligibility for PPP funding, please contact Tiveron Law Attorneys at Law, 716-636-7600.

DISCLAIMER: This article has been published as a service to the general public, and, as such, is intended for general purposes only. The information contained within this article should not be considered and/or construed as legal advice. Each reader is advised to consult legal counsel to determine how the contents of this article may apply to their particular facts and circumstances.

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