Small businesses can still take advantage of a government program that encourages companies to retain employees during the COVID-19 pandemic.
$129 billion remained in the Paycheck Protection Program coffers as of June 30, which was when the program was planned to expire. Lawmakers extended the program for five weeks, and now small businesses can apply through August 8 for a portion of the remaining funds.
The Paycheck Protection Program, part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, encourages employee retention by tying loan forgiveness to staffing levels. The loans cover payroll and other costs and are forgivable – they don’t have to be repaid – generally as long as staffing levels are retained.
Once a company starts letting go of employees, however, parts of the loan must be paid back. Effectively, the program provides funds to cover payroll, but laying off employees will mean watching free money walk out the door behind them.
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