New PPP Bill introduced in the Senate: On Tuesday the Senate passed a bill which extends the application deadline for the PPP an additional 5 weeks (recall that the deadline was yesterday and they still had about $130 billion in available funds). The bill still needs to go through the House and would need to be signed by the President to be passed into law. It is unclear how valuable this additional time will be as most believe that those businesses who wanted funds have already received them.
When will banks accept applications: Several clients have inquired regarding when they can apply for forgiveness and when banks will accept applications. We have heard that one bank has reached out to its clients to inform them that if they received their PPP loan in April, the bank will accept a forgiveness application in August. If the loan was received after April, the date the bank will accept the application is TBD. This is of course just one bank, but we have generally seen that banks are not in a position to accept applications currently and few have been explicit in how they will manage the process. We also have not seen any mechanism for a borrower to “declare” that they want to keep their 8 week covered period if they want to. At this point, borrowers will just have to be patient, we do not believe that there are any proactive steps required on the borrowers side right now other than being in consistent contact with their lender on the process.
Status of the P4 Bill: The P4 bill that was introduced by the House two weeks ago has not moved since it first came into play. This bill would allow certain borrowers to obtain a second PPP loan if they meet certain criteria (less than 100 employees, 50%+ reduction in revenue). We do not have much information on the probability of this passing or how it will interplay with the PPP extension bill noted above. We will monitor and report as we get updates.
Main Street Lending Programs: We reported on the general parameters of the MSLPs in previous emails, at this point the program is still not available to the public. Anecdotally we have heard mixed reviews from banks, many of which have indicated that they do not intend to participate in the program. We will continue to monitor.
New FAQs: It has been rumored for several weeks that a multitude of new FAQs are coming out in the near future to cover current open questions and to provide clarification. We believe this is correct but do not have insight as to when they are coming, it could be as soon as this week. As they come we will update you.
Reminder Section: (what should I be doing):
- Talk to your Payroll Company about claiming the payroll tax deferrals and employee retention credits that were made available in the CARES Act – see previous emails.
- Talk to your Payroll Company about claiming the qualified sick/family leave refundable tax credits (from FFCRA, passed prior to the CARES Act) – see previous emails.
- Consider speaking with your lender to discuss changes to terms of existing debt facilities.
- If you have already received a PPP loan, start forecasting how you intend to spend the funds and how you can qualify for the highest amount of loan forgiveness possible. If you are not forecasting 100% loan forgiveness, then most likely you should seek assistance regarding your particular situation. We believe the vast majority of borrowers should expect and plan to receive 100% loan forgiveness.
This information is provided by Withum. Visit Withum’s COVID-19 Resource Center for insights to help you and your business during this challenging time. Check out Withum’s Podcast Civic Warriors, a voice for nonprofits – Also on Spotify and Apple Podcasts!