Federal loan changes give some business owners a ‘sigh of relief’

Federal loan changes give some business owners a ‘sigh of relief’
Changes made to Paycheck Protection Program

MONTGOMERY, Ala. (WSFA) - Businesses are breathing a sigh of relief after President Donald Trump and Congress eased restrictions to the Paycheck Protection Program.

That program provides businesses impacted financially by the coronavirus with forgivable loans.

“It would have probably crippled one of my businesses," said Midtown Pizza Kitchen Owner Will Meacham.

That’s why he took out a PPP loan which helped save his business.

“Both of my businesses are open, operating and every day we’re getting a little better," Meacham said.

The loan is not forgivable if business owners do not follow certain criteria. But for weeks groups like the NFIB had been advocating for some changes to the criteria to make it easier for businesses to comply.

“I have talked to business owners that say it is such a big sigh of relief," said NFIB State Director Rosemary Elebash.

Businesses can now use more money for non-payroll costs like paying utilities and rent. Originally 75 percent of the loan had to be used for payroll but the new restrictions dropped it to 60 percent.

Business owners also have until the end of the year to bring back all of their employees. It also extends program duration from June 30, 2020 to Dec. 31, 2020, allowing businesses who have not yet applied additional time.

It also allows PPP recipients to defer payroll taxes, which they were previously ineligible to do, providing additional cash flow.

The changes give Meacham more hope that he can follow all of the guidelines and not owe any money.

“What it did for me as the business owner is I do have a lot more confidence in the fact that the majority of it will be forgiven," he said.

Even though more stores are reopening in Alabama there’s still a long road ahead.

For instance, one small business owner did not receive a PPP loan. Instead she applied for a different loan from the federal government just in case there was another surge of the coronavirus.

“I do feel more comfortable now that we do have it. But we’ve been fortunate with our business. Our customers are very loyal," said Apropos Owner Terri Owen.

About 60,000 businesses in Alabama have received a PPP loan.

Copyright 2020 WSFA 12 News. All rights reserved.