Extension of PPP Loan Program
On Wednesday, the Senate passed the fourth bill providing coronavirus-related relief to small businesses and providers. The $484 billion deal refills the Small Business Administration’s (SBA) depleted Paycheck Protection Program (PPP) by $310 billion. The House is scheduled to consider the legislation today. President Trump has signaled he will immediately sign the legislation into law.
Helpful links related to the interim deal:
Payroll Protection Program Refresher
The PPP is a new loan program for certain employers. Congress created the PPP by which small businesses and certain other employers could obtain loans through a new program administered by the Small Business Administration. Generally speaking, an eligible loan applicant could have no more than 500 employees. Eligible applicants would have to certify that the amounts borrowed would be used to do such things as maintain payroll and make rent or mortgage payments. Generally speaking, loans could not exceed the lesser of $10 million or 2.5 times the applicant’s average payroll costs during the previous one-year period. The bill also provides that loan amounts spent on payroll and certain other costs for eight weeks following loan origination would be forgiven. (Div. A, §§ 1102, 1106.)
AHCA/NCAL has also pointed out another path to qualifying for the PPP loans regardless of how many employees you have. A business can qualify for the PPP as a small business concern if it meets both tests in SBA’s “alternative size standard” as of March 27, 2020: (1) maximum tangible net worth of the business is not more than $15 million; and (2) the average net income after federal income taxes (excluding any carry-over losses) of the business for the two full fiscal years before the date of the application is not more than $5 million.
We encourage you to reach out to your lending institution to determine if you fall under this definition.
