Here's why small businesses could still be in danger, even with an extended PPP deadline.
"The appetite seems to have dropped off significantly, otherwise round two would be exhausted," said Albert Campo, CPA and managing partner at AJC Accounting Services in Manalapan, New Jersey.PPP loans have undergone significant change since they came about.
A legislative tweak in late May gave firms 24 weeks to spend their PPP allotment and allow for forgiveness if at least 60% of the funding goes toward payroll.However, this — along with the additional time to apply for the loan — doesn't do much for businesses that used their proceeds in eight weeks. "My clients who received PPP kept people on payroll and did what they were supposed to do," said Markowitz. "But when the rules changed and you could use it for 24 weeks, they got screwed."
Those businesses paid workers even when they were closed so that they could meet the PPP's payroll requirements, he said. Now they're out of funding — and with"If you applied in the first month, it's all gone," Markowitz said. "It was used predominately to keep people off unemployment." Even lawmakers noted that there needed to be more PPP relief beyond giving entrepreneurs more time to apply for funding.Accountants are looking to the next piece of coronavirus relief legislation to grant more relief to small businesses. For instance,which was introduced by House Democrats in May, has a provision that allows small-business owners to use PPP and the employee retention tax credit.Markowitz has helped clients apply for local grants in Florida's Orange County.
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