A Look at COVID Support Programs for Small Businesses: As of July 9th, 2020
We are over three months into the CARES Act being enacted. It’s been a whirlwind to say the least and there is no end in sight related to the COVID-19 impact. It’s very likely we see additional changes to the Paycheck Protection Program (PPP) in the coming weeks. The last major change we saw was the extension of the PPP application deadline from June 30 to August 8. We fully expect additional forms of federal stimulus for small businesses in the coming months as well. Just a few of the programs being discussed in D.C. are summarized below. Many of these have been floated before and are gaining some momentum again.
Prioritized Paycheck Protection Program (P4)
Consider it PPP round 2. Businesses that qualify could receive a second PPP loan. Qualifications are expected to include a limit on number of employees and meeting revenue reduction requirements.
Paycheck Protection Small Business Forgiveness Act
Blanket forgiveness of all PPP loans less than $150,000. Borrowers would have to complete a 1-page certification only.
New loan program that would provide more cash to small businesses to cover payroll, benefits and other fixed costs. The loan would likely include partial forgiveness opportunities. The loan would be capped at 45% of gross receipts and have a term of 7 years. To qualify it is likely you would have to demonstrate a revenue reduction of not less than 25%
Save America’s Main Street Act
Tax rebates to businesses with less than $1M in gross receipts and less than 50 employees. The rebate would be equal to 30% of gross receipts, capped at $75,000.
Jobs Credit Act
It would increase the Employee Retention Credit (ERC) credit percentage from 50 percent to 80 percent of eligible wages. It would also increase the wage maximum from $10,000 to $45,000. Qualifying for the ERC would be easier and it would allow those receiving PPP loans to also take advantage of the ERC.
It’s clear we will continue to work and operate in a constantly changing environment due to COVID-19. Will PPP change again? Which stimulus package will be supported? Will states implement new shutdown orders? Will federal unemployment be extended? We have to continue to be aware of what is going on around us and make decisions quickly that are in the best interest of our business and our employees. We will continue to monitor the environment constantly and keep you updated on all ever changing landscape.