Today, President Trump signed into law the $484B, “Phase 3.5” emergency interim coronavirus relief package.
For small businesses, the bill provides an additional $310 billion in funds for the CARES Act’s Paycheck Protection Program (PPP). The White House announced that lenders can, again, begin accepting applications next week for PPP loans. The PPP provides emergency funds for small businesses to continue to meet payroll and qualified expense obligations for up to 8 weeks.
We encourage you to connect with your lending institution today to make sure your loan application is complete and ready for processing.
The loan is secured through SBA approved lenders and is 100% forgivable if used for qualifying expenses. Current guidance is that at least 75% of loan dollars must go toward payroll expenses and the other 25% toward approved expenses in order to be forgiven.
We recommend placing PPP funds in a separate account to simplify tracking. We do not yet know how cumbersome the process is going to be to convert the PPP loan into a grant, but simple, clear proof of qualified transactions will help.
The PPP ran out of funding earlier this month, spurring Congress to pass the “Phase 3.5” relief package to replenish the PPP funds and fund other programs.
The federal government is considering a Phase 4 stimulus package which could include a payroll tax cut for employers. We will continue to track a possible Phase 4 stimulus package and keep our clients and colleagues informed of critical provisions.
As always, please reach out to a member of your client service team at FAL with any questions or for additional guidance. For general inquiries, please email us at info@falcpa.com.