How did the historic $669 billion Paycheck Protection Program (PPP), intended to be a lifeline for small business owners during the COVID-19 pandemic, go from being salvation to the opposite?


At the center of the program are Secretary Steven Mnuchin and other politicians and pundits who (in their haste) did not anticipate or take into account every scenario when launching the billion-dollar program. Rules were changed and modified and without much clarity into loan forgiveness.

For example, the PPP allowed borrowers to use its low-interest, forgivable loans of as much as $10 million for a range of expenses that stretched well beyond just paying employees. These expenses (at the time) could be used for essentially any operating expense including the refinancing of debt. However,  since then, the Treasury Department and Small Business Administration have issued rules that limit spending mostly to payroll.

Furthermore, the law cited no restrictions on public companies seeking to access loans. This oversight led the way for corporations such as Ruth Chris Steakhouse, Shake Shack, and even the Los Angeles Lakers to access millions reserved for small business owners. Only after public outrage reached the mainstream, did the Treasury and SBA on April 23rd issue new guidelines.


Small business owners should know that the deadline for the Repayment of PPP Loans has been extended from May 7 to May 14. Small business owners need to be current and up to date with the program rules.

The SBA advises that:

  • SBA is extending the repayment date for the safe harbor to May 14, 2020.
  • Borrowers do not need to apply for this extension.
  • The extension will be promptly implemented through a revision to the SBA’s interim final rule providing the safe harbor.
  • SBA intends to provide additional guidance on how it will review the certification prior to May 14, 2020.


Borrowers of PPP loans should consider carefully both the new deadline and the expected additional guidance on how the SBA will review certifications; However, the speed of PPP funding needs to get better to help struggling businesses, many of which need the assistance before closing their doors. As bills mount and less revenue coming in for small business owners, the PPP program can’t risk being a day late or a dollar short.

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