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The Paycheck Protection Program (PPP) is a part of the government economic stimulus package to curb the disastrous effects on the economy due to COVID-19. The program, designed to assist businesses by helping them keep their employees on the payroll, has been successful with thousands of small businesses getting assistance. Instead of businesses laying off and furloughing employees, it is intended to keep people employed and paid. 

As the program rolled out, the general consensus has been that your smaller community banks were much more efficient in getting these loans approved and closed with the SBA. The large national banks struggled, with most complaining about a lack of communication. This continues to reinforce how important it is to have a good relationship with your local bank. With a 1 percent interest rate and no personal guaranty, the loan can be forgivable as long as the borrower meets the SBA requirements. Those guidelines continue to be adjusted by the federal government. The form to apply for forgiveness is long and cumbersome, and for best results, it should be filled out by the company’s accounting firm or finance department. The funds from these loans not only are for paying employee payroll, but a portion of the loan, 40 percent, used for various expenses, such as mortgage, rent or utilities.

On June 5, President Trump signed into law the Paycheck Protection Program Flexibility Act (PPPFA) to address many concerns expressed by the small business community around the PPP. The original deadline to apply for the PPP was June 30. But $130 billion still remained in the fund, out of $660 billion apportioned. The new deadline is Aug. 8, 2020. 

Here is the summary of what this will result.

  1. Amount of loan needed for payroll to 60 percent;

  2. Extends time period to use funds from 8 to 24 weeks;

  3. The deadline to rehire workers is pushed back from June 30 to Dec. 31, 2020;

  4. Adds additional exceptions for a reduced head count. The law states a business can still receive forgiveness on payroll amounts if it:

• Is unable to rehire an individual who was an employee of the eligible recipient on or before Feb. 15, 2020;

• Is able to demonstrate an inability to hire similarly qualified employees on or before Dec. 31, 2020; or

•Is able to demonstrate an inability to return to the same level of business activity as such business was operating at prior to Feb. 15, 2020.

  1. Extends the repayment term from two years to five years.

Central Bank, an Indian-owned community bank with offices in Tampa, Winter Park and St. Augustine, had 100 percent success rate in securing these loans and funded over $55 million to small businesses to help keep over 5,500 employees working and paid. 

For more information, call Jon Morrell at (813) 549-4202, Nilesh Patel at (813) 549-4217 or visit

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