The U.S. Small Business Administration (SBA), in consultation with the U.S. Treasury Department, opened the Paycheck Protection Program (PPP) loan portal today — Monday, Jan. 11, 2021 — at 9 a.m. Eastern time. The PPP loan portal system will initially accept First Draw PPP loan applications from participating Corporate Finance Institutes (CFIs), which include Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs) and Microloan Intermediaries.
Please note: guidelines have changed this go-round. Loans are limited to business owners with 300 or fewer employees instead of 500. To qualify, applicants must also show a revenue reduction of 25% (gross receipts). The guidelines are clear that this reduction needs to compare the same time frame in 2020 as 2019. For example, Q1 2020 vs. Q1 2019, or the entire year of 2020 vs. 2019.
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Call it PPP federal rescue loans, Version 2.
For design and construction firms still struggling with the economic uncertainties brought on by the COVID-19 pandemic, the rules of the federal Paycheck Protection Program will be clearer in its revision.
The loans are covered by a federal year-end legislative package that provides funding for a $284.6-billion second draw.
After Congress pushed through the initial $659-billion forgivable loan program in April with limited details, many construction companies grew frustrated as the guidance trolled out over the following months, including some onerous provisions, says Jimmy Christianson, vice president of government relations at Associated General Contractors of America.
But after nearly eight months of working through the program, he says the new effort will offer a lot more clarity about the application process. Click here to read the entire article.
Over the weekend, President Trump signed a massive $2.3 trillion coronavirus relief and government funding bill, averting a government shutdown that was due to start on Tuesday if an agreement was not reached beforehand.
The bill includes a $900 billion COVID-19 relief package, which extends unemployment benefits for millions of United States workers. U.S. citizens will also receive $600 in stimulus payments. The package also contains several key benefits for construction firms. Click here to read entire article.
The United States Internal Revenue Service (IRS) has released several items containing guidance related to Paycheck Protection Program (PPP) loans—specifically for businesses planning to seek forgiveness for the loans.
In short, the IRS says that since businesses will not be taxed on the proceeds of a forgiven PPP loan, if a business reasonably believes the loan will be forgiven in the future or the business qualifies for forgiveness, costs related to the loan can not be used as a tax deduction for federal taxes. If the business expects the loan to be forgiven, and the loan is not, in fact, forgiven, the business will be able to deduct the costs from its taxes.
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Last week, President Trump signed into law a new bill that effectively relaxes Paycheck Protection Program loan requirements for many small businesses—the Paycheck Protection Forgiveness Act.
The law allows businesses a bit more leeway concerning where the money coming from the loans, part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, are spent, as well as a few other key points. Click here to read the entire article.
It hasn’t been an easy ride for those applying for or administering Paycheck Protection Program loans since the program went into effect on April 15. A lightning-fast rollout, differing interpretations of the rules, a steady stream of updates, warnings to recipients about audits and penalties, and negative press about public companies that received money while small business applications were held up in lender logjams frustrated many potential borrowers to the point that some withdrew their applications or returned the money. Click here to read the entire article.
On May 15, the Small Business Administration (SBA) released the long-awaited Payroll Protection Program Forgiveness Application. Under the Payroll Protection Program (PPP) entrepreneurs may apply to have up to 100 percent of their loan forgiven.
However, the SBA has failed to give clear guidance on the details of loan forgiveness, and this has caused entrepreneurs to question what they need to do to prepare for PPP loan forgiveness. The new application provides clarity on a few points. Click here to read the entire article.
So you received your funds from the Paycheck Protection Program, now what? The next step is to make sure you spend the funds in a way that maximizes the forgiveness of the loan. That will take some planning on the front end and monitoring of regulatory guidance during the next eight weeks. Click here to read the entire article.
Democrats have released another sprawling stimulus package, known as the Health and Economic Recovery Omnibus Emergency Solutions or HEROES Act. The legislation includes $875 billion for cash for state and local governments and Democratic leaders say is the centerpiece of the fifth coronavirus relief package. The package also includes $20 billion each for tribal nations and for U.S. territories and provisions to support multi-employer pensions.
"We can all agree that we must open our economy as quickly as we can but we must do so based on science and data," Pelosi said. "The key to opening the door is testing, tracing, treatment and social distancing."
The legislation also includes a slew of liberal priorities left out of previous bills, including $75 billion for mortgage relief and $100 billion in assistance for renters, $25 billion for the U.S. Postal Service and $3.6 billion to shore up elections. Click here to read the entire article.
The novel coronavirus (COVID-19) has had a major impact on organizations and operations across all industries—construction is certainly no exception. As construction executives grapple with the unprecedented impact COVID-19 will ultimately have on their businesses, a great deal of uncertainty remains. Many question marks still exist around the ultimate scope of the pandemic and what recovery will look like in the construction sector and the economy at large.
From a risk management perspective, these uncertainties make planning for the future particularly challenging. Yet the recent Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, offers a glimpse at the future in terms of what relief will be available and opportunities for new projects in a post-coronavirus world. The $2 trillion act is the largest relief package in U.S. history, and the third stimulus effort dedicated to combatting the economic impact of COVID-19. Click here to read the entire article.