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By John-Mark Hack
Contributing columnist

As the COVID-19 pandemic continues to spread through our communities, the federal government has extended its offer of fully forgivable loans for small businesses and non-profit organizations through the Small Business Administration Paycheck Protection Program (PPP). The PPP has been extended through August 8, 2020 for those who have not yet applied. The loans are fully forgivable if funds are used for approved purposes. Importantly, sole proprietors, businesses and organizations without employees, and non-profit groups may also qualify for this program.

The program had a rough launch back in April. Many business owners found the requirements confusing or assumed they would not qualify, and the first round of funding quickly ran out. Since then, there have been several key changes to the program in response to what small business owners and nonprofit leaders have said they need. Nearly 50,000 Kentucky businesses or organizations have now received PPP loans and as of early July, there were still billions of dollars remaining for new applicants under the extended deadline.

Here’s a quick breakdown of the recent updates to the PPP. To qualify for full forgiveness, borrowers must allocate at least 60 percent of their PPP funds for payroll expenses, and may use the rest to pay for overhead costs such as rent, mortgage interest and utilities. Businesses and organizations that receive the loans must get back to the average number of employees they had on staff before the crisis by December 31, 2020, and they must be paid at the same rate. Full forgiveness may also be available when a business or organization can’t hire back their full staff because of COVID-related workplace safety requirements that mandate they operate at less-than-full capacity. Borrowers have 24 weeks from the day they get their PPP funds to use them. If the loan is not fully forgiven, repayment periods have now been extended to five years. For full details, please refer to the Small Business Administration website.

The Mountain Association for Community Economic Development (MACED) offers loans and business support to businesses and organizations throughout Eastern Kentucky, including those that may not qualify for traditional financing. As lending experts, we have helped several small businesses in Eastern Kentucky determine their eligibility for the PPP, navigate the application process, and receive much-needed financial assistance from this program. The dollars extended to these businesses have been the difference between staying in operation and closing their doors.

The Paycheck Protection Program can help maintain momentum toward a bright future many have been building in Eastern Kentucky for decades. We strongly encourage all organizational leaders to investigate eligibility. We know these loans can help many more businesses and organizations make it through this challenging time, and we want to make sure every leader has the information they need to take advantage of these fully forgivable loans. We invite any business or organization based in the 54 Appalachian Kentucky counties to contact us with your questions. If you are outside of this service area, please know that most financial institutions should also be able to assist with your questions.

Small businesses and non-profits are powerful engines for building a more diverse and sustainable economy in Eastern Kentucky. From the farmers markets and coffee shops, to the music venues and hiking trails, to the retirement communities and specialty clinics – food, recreation, entertainment, housing and healthcare all contribute to a quality of life that many people want in their communities. If you own a business or lead a non-profit in Eastern Kentucky, then you owe it to your staff, your community and yourself to investigate what assistance might be available to you through the PPP.

John-Mark Hack is the Lending Director at MACED. He can be reached via email at john-mark@maced.org.