Today we say goodbye to the SBA’s Paycheck Protection Program as the deadline for applications is tonight at 12 PM eastern. Our update today will recap a little about and the program and what the future may hold for a re-do. There are some other little pieces of info added as well.
Goodbye for Now to PPP
As we move into July the PPP program will end after distributing over $500 billion to almost 5 million companies. With that said, the program does still have a fund balance of about $125 billion. After a reloading, fears were that the second round of money would go just as fast, but that never happened.
Lawmakers should start the conversation soon about what to do with that remaining balance as money has been long exhausted for those most in need. Additionally, with the current trend of cases spreading through various parts of the country, a new program has recently surfaced.
The Prioritized Paycheck Protection Program Act (otherwise now known as P4) would extend the application process out until December 30th or possibly into the next year. It would still fall under the direction of the SBA and would only be available to those companies that have already received PPP funds. The program would be much tighter on qualifications and create specific amounts to those devasted by the pandemic. Here are some highlights of the talked about details of P4:
- Small businesses–including sole proprietors and self-employed individuals–with 100 or fewer employees may access the program. The original PPP allowed companies with 500 or fewer employees to participate.
- Businesses must already have exhausted a PPP loan or be on track to do so.
- Companies need to demonstrate that the pandemic caused revenue loss of 50% or more. It is unclear over what period businesses would need to show the loss. Under the original version of the PPP, companies needed only to show that they expected to be harmed by the pandemic.
- The lesser of $25 billion or 20% of P4 funds would be earmarked for businesses with 10 or fewer employees, as well as for small businesses in underserved and rural communities.
- The SBA would be directed to issue new guidance, giving priority to businesses with 10 or fewer employees. The agency must also request demographic information of P4 and PPP loan recipients.
- Eligible small businesses could access as much as 250% of monthly payroll costs worth up to $2 million. Hospitality and lodging businesses with multiple locations would be limited to an aggregate loan amount of $2 million. The original PPP offered loans of up to $10 million.
- P4 recipients could apply for loan forgiveness as soon as eight weeks after the loan disbursement.
This measure is expected to fit into a larger Phase 4 bill currently being considered by Congress.
The Wait for IRS Refunds
Taxpayers that waited to file under the extended deadline may be in for a long wait for refunds, as an estimated 4.7 million returns were backlogged at the IRS by mid-May because of the agency’s employee evacuation for the coronavirus pandemic.
Update on Evictions
Millions of tenants are at risk of receiving eviction notices in late July as protections from the CARES Act stimulus program are set to expire. CARES included a moratorium on evictions for tenants in units with federally backed mortgages or other assistance who were unable to pay rent. But with no agreement in Congress on an extension of the moratorium, families hit hard by the coronavirus pandemic may soon have to make new living arrangements.
Backtracking on Reopening
The governors of New York and New Jersey said they were reconsidering plans to allow indoor dining because of concerns over the surges in the West and the South. As new studies have found that most transmission of the virus comes from a small number of so-called super spreaders, municipalities are reconsidering the loosening of restrictions. Now scientists are trying to figure out why — and how they can stop these so-called super spreaders who tend to be much younger than the original typical patient.
Who’s downsizing or dumping the whole idea of having a traditional office? Employers like Facebook are becoming excited about the long-term prospect of remote working, mostly because of the money it saves. However, decades of setbacks suggest a bumpy road ahead. In the past, IBM, Best Buy, and other companies scrapped work-from-home experiments after finding that telecommuting diminished accountability and creativity. Maybe this time really is different, because of the combination of a major health crisis and better technologies like Zoom.
Finally, a little something different to share today as a wrap up. The Irish once again kissed the Blarney Stone this week, continuing a tradition that has lasted for nearly 600 years. The traditional was halted for obvious reasons on March 13, but it now a sign of getting back to normal.
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry
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