Coronavirus has left many small business owners fearful of whether or not they will be able to pick up their business once again. New rules in Richmond, Virginia have been implemented in order to help those needing loans, giving them easier access to money and more lenient borrowing requirements. Check out this article to learn more on what actions have been taken in order to support the reopening of small businesses in Virginia.
During the second round of the Paycheck Protection Program loans, the Small Business Administration (SBA) says they have seen an uptick in applications. So far, the SBA has given out $510 billion in the program and recently made a few changes to the rules, to give small business owners more options.
The SBA extended the forgiveness loan period.
The term for forgiveness will now go from eight weeks to 24 weeks. This allows borrowers to have six months instead of two months, to spend the money. And as long as borrowers spend enough of the funds on payroll and benefits, the entire loan will be forgiven.
The other new change involves how much of the loan borrowers can spend on payroll.
Before, small business owners had to spend 75 percent of the loan on payroll. But with the changes, they only need to spend 60 percent.
This would allow business owners the option to spend more of the PPP loan on rent, utilities, and other necessities.
SBA officials told CBS 6 they received feedback on how to make the PPP loans more helpful. for different types of businesses, mainly restaurants.
“They have been advocating for changes because during the shutdown period they have been closed. And what they want to do is use the PPP money to bring back their employees, as they start to reopen. So that they have funds coming in,” Steve Bulger, a Regional Administrator, said.
In a recent study, SBA officials said 75 percent of small businesses with employees, have been able to access the PPP loans. Even with that new information, they are continuing to work on different ways of helping borrowers, during the pandemic.
“There is a push,” Bulger said. “Congress has mandated this and we’re pushing on our end. To get money into low-income communities. Minority communities. Because they are the ones who traditionally have had the hardest access to get capital access from lenders. So we’re pushing through in a variety of ways to make that money available.”
The SBA also created an EZ Forgiveness Application to help more borrowers in unique situations. For example, those who are self-employed did not reduce their salaries or saw a reduction in business due to health issues related to COVID-19.
Applications close on June 30.