What Should Business Owners Do After They Run Out of PPP Loan Money?

June 29, 2020

By Billie Anne Grigg, Accounting Today

Just a few short weeks ago, businesses that received funding during the first tranche of the PPP loan program were considered fortunate. But now, many of those businesses have reached the end of their loan money, and business still isn’t back to normal.

There are a number of reasons why the loan money might not have been enough:

  • Full or partial shutdowns continue in some parts of the country, preventing businesses from rebounding. Even though experts warned us COVID-19 would be with us for some time, shutdowns and their economic impact are lasting longer than many expected.
  • The states that have reopened have seen a dramatic increase in the number of COVID-19 infections. Although some customers are happy to return to their pre-shutdown habits regardless of increasing case numbers, others are making the decision to stay at home a little while longer. This is slowing down the rebound many clients were counting on when their states allowed businesses to reopen.

  • Many business owners who received funding during the initial rollout of the PPP loan program made spending decisions based on the guidance that all PPP funds would need to be used in an 8-week period in order to receive loan forgiveness. These guidelines have since changed to give loan recipients 24 weeks to use the funds, but not until after many business owners had spent most of their loan money.

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