Auto Glass Safety Council™

Tag: PPP

  • Extension to Paycheck Protections Program Enacted

    Federal legislation was enacted earlier this week that extends the Paycheck Protection Program through August 8. The program was originally to expire on June 30.

    AGSC members seeking financial relief from the economic effects of the coronavirus crisis now have additional weeks to apply for aid from the program that provides loans that are potentially forgivable to qualified applicants.

    Approximately $130 billion in unused funds were said to be still available under the program.

    The PPP was enacted as part of the March 27 CARES Act to provide quick relief to small business owners experiencing economic hardship due to the response to the coronavirus. The program promised low interest, possibly forgivable, loans of up to $10 million, for eight weeks of payroll plus 25% more for rent, mortgage, utilities, etc.  The program has since been modified to allow for as little as 60% of the funds to be used for payroll and to allow for forgiveness for expenses beyond the original period through December 31, 2020.

    Exceptions are now also provided for businesses that cannot reopen fully due to restrictions, such as customer capacity with appropriate documentation of the inability to rehire employees or similarly qualified workers or because of compliance with government issued health and safety mandates and guidance.

  • Paycheck Protection Program (PPP) Flexibility Act enacted in Washington

    The Paycheck Protection Program (PPP) Flexibility Act was enacted in Washington last week to address concerns expressed by business owners and give borrowers additional time and flexibility to use the loan proceeds.

    The PPP was enacted as part of the March 27 CARES Act to provide quick relief to small business owners experiencing economic hardship due to the response to the coronavirus.  The program promised low interest, possibly forgivable, loans of up to $10 million, for eight weeks of payroll plus 25% more for rent, mortgage, utilities, etc.  However, struggling businesses quickly experienced real world obstacles in meeting the tight loan forgiveness period and the requirement that 75% of the loan be spent on payroll.  Businesses were given until June 30 to restore full-time employment and salary levels for any changes made between February 15 and April 26 and all loan amounts had to be expended within eight weeks of receiving the loan.

    The new law will provide greater flexibility to small business owners by:

    • Allowing forgiveness for expenses beyond the original 8-week covered period to 24 weeks (through December 31, 2020) and extending the rehiring deadline;
    • Increasing the current limitation on non-payroll expenses (such as rent, utility payments and mortgage interest) for loan forgiveness from 25 to 40 percent, but falling below the 60% threshold for payroll will eliminate, rather than reduce, loan forgiveness;
    • Extending the time to rehire workers from June 30, 2020 to December 31, 2020;
    • Providing an exception for businesses that cannot reopen fully due to restrictions, such as customer capacity, by allowing for documentation of the inability to rehire employees or similarly qualified workers or of compliance with government issued health and safety mandates and guidance;
    • Extending repayment deferment from six months until after a forgiveness decision is made or ten months after the eight or twenty-four week period;
    • Extending terms for loans made after June 5, 2020 from two to five years (terms for loans made prior can be renegotiated with lenders);
    • Ensuring full access to payroll tax deferment for businesses that take PPP loans.

    For a summary and text of the Paycheck Protection Program Flexibility Act of 2020 CLICK HERE.

  • Revised Paycheck Protection Program (PPP) Loan Forgiveness Application Form Released

    On Tuesday, the US Small Business Administration (SBA) and Treasury released the promised revised Form 3508 Paycheck Protection Program (PPP) Loan Forgiveness Application. Form 3508 can be found here, and its instructions here. The new streamlined form incorporates the PPP loan forgiveness changes contained in the recently enacted PPP Flexibility Act, including the expanded 24-week Covered Period for calculating qualified expenses for loan forgiveness and the new exemptions from FTE and salary and wage reductions. In addition, the much-anticipated new Form 3508EZ was also released, providing even greater simplicity for those Borrowers eligible to use it. Form 3508EZ can be found here and its instructions here. Those eligible to use the EZ version include:

    • Those who are self-employed with no employees, or
    • Those who did not reduce salary or wage by 25% or more during the Covered Period for any employee making less than $100,000 and there was no reduction in full-time equivalent (FTE) employees between January 1, 2020, and the end of the Covered Period (taking into account certain reduction safe harbors and exemptions), or
    • Those who did not reduce salary or wage by 25% or more during the Covered Period for any employee making less than $100,000 and the Borrower can certify that it was unable to operate during the Covered Period at the same levels as before February 15, 2020, due to compliance with government health directives related to COVID-19.

    The new PPP loan Forgiveness forms also take into account guidance contained in an Interim Final Rule (IFR) issued yesterday. The IFR can be found here. The IFR makes revisions to previously issued IFRs to bring them into compliance with the PPP Flexibility Act provisions. Of note, the IFR makes clear that when Borrowers use the 24-week Covered Period, the cap on compensation for non-owner employees is $46,154 – tripling the prior $15,385 cap based on the 8 week Covered Period. However, employee-owners are capped at $20,833 when the 24 week Covered Period is used. While these latest publications provide some answers to ongoing questions, more guidance is expected as has been the case throughout the PPP loan process.