How the Paycheck Protection Program PPP Affects You

How the Paycheck Protection Program PPP Affects You

I have some bitter-sweet news to bring to you about the Paycheck Protection Program.  I’m going to make this video as quickly as possible so you can get what you need and get right back to your day. 

On Tuesday night, the US Senate passed by unanimous consent a five-week extension of the Paycheck Protection Program (PPP).  Yesterday, the House followed suit and the bill is expected to soon be signed into law. 

The bill extends the deadline for small businesses and nonprofits to apply for PPP funding from June 30th to August 8th. 

The PPP provides forgivable loans to small businesses to help them keep employees on payroll during the pandemic.

Congress created the PPP as part of the $2 trillion CARES Act.  Since the program first started on April 3, approximately $520 billion has gone to small businesses.  That leaves more than $130 billion available a week before the June 30 final deadline for getting a PPP loan.  While this is good news for small businesses, it is also a short-term solution that will expire in just a few more weeks.

Restaurants also have five years to pay back their loan at 1% interest if they do not qualify for forgiveness.  With the PPP Twenty-five percent of the funding can be put toward fixed costs like mortgage, rent, and utilities.

Now, why did I call this move bittersweet at the beginning of this video?  Let me explain and how this actually may affect you.

Listen clear, I know that it’s hard for people out there right now.  But, I’ve said it before & I’ll say it again. Pumping money into the economy is only a temporary solution that will NOT solve the problem. This is the equivalent of covering a gunshot wound with a band-aid.

That’s why during the next few weeks if you don’t have an emergency fund start looking for ways to increase your savings.  You have to ensure that you have cash stacked back just in case this pandemic lasts longer than expected (which it already has).  

Cut your expenses and sell what you can and build your emergency fund in that way you are protected because the next few months have a big question mark over it.

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