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Small Business Association To Wind Down Paycheck Protection Program, Ending Historic Relief Program
The Paycheck Protection Program helped buoy millions of small businesses during the COVID-19 pandemic—and now it's coming to an end.
As Politico reports, the Small Business Association (SBA) on Wednesday announced the beginning of the end of the historic, nearly $1 trillion program, announcing in its stead an online loan forgiveness platform that will accept applications from small borrowers.
This initiative will encourage borrowers with loans of $150,000 or less — accounting for more than 90 percent of the pandemic-era program — to apply for loan forgiveness.
The ability to turn PPP loans into grants in exchange for maintaining payroll was a key component of the small business rescue initiative. However, nearly 7 million of those loans have not been forgiven.The SBA's new platform will accept applications from small borrowers directly in a format that officials estimate will take businesses just a few minutes to go through.
What's more, they plan to spare certain borrowers who received second PPP loans this year worth less than $150,000 from having to supply documentation proving that they suffered a 25 percent revenue reduction in 2020 that was required to receive the aid.
The SBA plans to launch the site on a pilot basis on Wednesday (7/28) and have it go live around August 4. This development will be germane to many music creators, who may be considered sole proprietors, independent contractors, or self-employed businesses—which is exactly who the PPP was aimed at in the first place.
Last February, the Biden Administration and SBA jointly announced changes to the PPP, adding increased access to essential financial relief for the creative workforce. Formed as part of the CARES Act, the PPP has enjoyed overwhelming bipartisan support due to its ability to rapidly deliver relief to qualified small businesses, sole proprietors and independent contractors.
While the PPP will soon be a thing of the past, the Recording Academy's Advocacy wing urges those still in need to access the upcoming portal and pursue PPP loan forgiveness if they meet the qualifications.