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The PPP Dilemma: 24 vs 8 Weeks

By: Business Advisor Peter Harriman

Nothing is as confusing as when a newly rolled out program experiences the growing pains of change. Many business owners had just become comfortable with the 8-week PPP Covered Period when suddenly they were confronted with an unexpected twist – 24 weeks? 

Many of my clients at the Maine Small Business Development Center (SBDC) have come to me confused – which time period should I use? At the SBDC, we offer no-cost, confidential one-on-one advising. Business owners often turn to us for answers, especially as they navigate the ins-and-outs of the myriad of programs developed to help businesses navigate the COVID-19 pandemic.

The answer to the question is straightforward – use the longer 24 week period if it would benefit you. The intention of creating a longer period was to help ensure that businesses would be able to have their full PPP loans forgiven. This is easier to do if you have 24 weeks of expenses to consider when compared to 8 weeks. 

A very basic example: Let’s say you had a PPP loan of $10,000 that was based on 2 months of expenses. Because of COVID, you cut back on your normal expenses and ended up only using $8,000 during this period. Worse still, you didn’t meet the 60% threshold in payroll so you are looking at the possibility that this “forgivable” loan is going to actually be just a straight-up loan. 

Now comes the 24-week provision – your PPP loan is still $10,000, but rather than looking at just an 8 week period of expenses, you can now look at 24 weeks. Assuming you continue spending $4,000/month ($8,000 every 8 weeks), at the end of 24 weeks you would have $24,000 worth of expenses to apply towards the forgiveness of that $10,000 PPP loan. Even with possible reductions, it is much more likely that you will have the loan forgiven versus when we looked at the 8 week period only. 

So my word of advice – unless you know for certain that you followed all the PPP guidelines and rules and will be fully forgiven under the original 8-week Covered Period (assuming you had a PPP loan prior to June 5th) then go with the 24-week period to be safe.

Looking for more PPP Forgiveness information? Check out our video series!


Have a question? We’re here to help.

Reflections on a Challenging Year

 By: Brad Swanson, Business Advisor

For many small businesses, 2020 was a year that started with promise and great potential for continued growth and success. As we reflect on the year, it is very easy to get caught up in thoughts about the world health crisis that swept into our lives in March. In particular, the specter of COVID-19 has shocked and staggered our small business economy here in Maine. It is impossible to ignore the struggles that this pandemic has brought to so many. None of us has endured a time like this, where all aspects of our communities are so impacted, so challenged.Read More

How to Survive and Thrive this Holiday Season

Holiday Season Prep for Maine Small Businesses

By: Maine SBDC Business Advisor Alison Lane 

As we close the year with the same uncertainty that plagued our Spring, Summer, and Fall, small business owners hope to capitalize on the season that is “merry and bright”.  However, changes to consumer behavior, recovering markets, and the scars from many rough months make the success of Black Friday, Christmas, and the other major spending holidays unknown.  How can businesses make the best of the 2020 holiday season with their marketing efforts?Read More

What If Someone Tests Positive

With the amount of time the Coronavirus has endured, business owners might have started asking themselves not if a positive case will occur in their business, but when. On the occasion where someone has become infected, it is important to know where to look and what to do. Fortunately, there is guidance out there to help.Read More

Long Shot Revival Homestead

The Long Shot Revival Homestead, in Orland, is a family farm owned and run by Joe and Haley Brown. Joe is an Army National Guard veteran and initially thought farming and raising pigs would be a good therapeutic outlet as he transitioned back to civilian life. Starting off with just a few piglets, Maine SBDC at CEI Business Advisor Shannon Byers helped them get organized and explored options for expansion, leading to the addition of poultry to the farm. Joe also gained support through a nonprofit called United Farmer Veterans of Maine, aimed at helping Maine veterans navigate and succeed in agriculture and business success. Throughout this growth, he has continued to show commitment to this community in a variety of ways including a 10% discount to fellow veterans.

Read More

Hero’s Pizza & Breakfast – Skowhegan, ME

Derek DeFelice is a decorated Purple Heart veteran and owner of Hero’s Pizza & Breakfast in Skowhegan. Derek and his wife Aaron have worked hard to build this local pizzeria since they purchased it in 2018. Through long hours and sheer determination, they have rebranded and remodeled the restaurant, increase sales, and hired new staff.Read More

Getting Started with QuickBooks

By: Christina Oddleifson, Maine SBDC Business Advisor 

Covid 19 has made it more important than ever for small businesses to have up to date information about their financial performance.

If the Covid 19 pandemic has taught us anything, it’s that small businesses with up to date and accurate financial information have fared better than those without. The ability to quickly access tax returns and financial statements has meant that these businesses were able to obtain grants and loans much faster. They could also quickly understand the impact of the pandemic on their business, leading to better and faster decision-making.Read More