President Donald Trump has signed a new $900 billion coronavirus relief and stimulus plan law. The provisions include: extending last spring’s “Salary Protection Program”, allowing another $284 billion or so in repayable, federally-backed loans to troubled small businesses.
The original plan, under the supervision of the U.S. Department of the Treasury and the Small Business Administration, provided about $525 billion in funding to more than 5 million recipient countries, but loopholes and debts were everywhere, which triggered an already complicated process. Countless questions.
The new “Tough Small Businesses, Non-Profit Organizations, and Site Financial Assistance Act”
The following are answers to some of the questions that business owners may ask.
How is this round of loans different from the previous round?
Some aspects are roughly the same. Applicants have 8 to 24 weeks to use the funds, of which at least 60% is used for salary, and the rest is used for eligible expenses such as rent and utilities.
The upper limit of the new loan is $2 million, compared with the previous $10 million. The applicant must have no more than 300 employees instead of 500, and must prove at least a 25% decrease in income from the fourth quarter of 2019 to the same period this year.
The bill expands the types of insured expenses to include cloud computing or remote work software; and equipment used for government-specified health and social isolation, such as sneezing guards or air filtration systems. It even covers “property loss and vandalism or robbery due to public harassment that occurred during 2020.”
A significant aspect of the new bill that is not directly related to the new loan is the expansion of the employee retention tax credit, which is an aspect of the Coronavirus Assistance, Recovery and Economic Stimulus Act (CARES), which encourages employers not to lose their jobs. Initially, companies that received a “Payroll Protection Program” loan were not eligible to apply for this credit. Now they are.
If I have already obtained a loan, can I get another one?
Yes. These are called “secondary withdrawal” loans and you can apply for them as long as you meet the above conditions. The deadline for all new loans is March 31.
Is there a company that is eligible for more help than others?
The amount of the new loan is determined by a formula that involves multiplying wage costs by A kind The coefficient is 2.5 (again, $2 million). Restaurants and other hospitality industries may multiply these fees by 3.5 to qualify for more funding.
The bill restricts certain companies from applying for loans, including companies that specialize in political or lobbying activities, such as the Florida Democratic Party, which received and returned $780,000 last time. Also not including: companies with extensive business dealings in China or Chinese residents on the board of directors.
Concert halls, theaters, and museums that have long lobbied for additional assistance are not eligible for the new “Salary Protection Program” loan, but can apply for a “closed venue operator grant” worth not more than $10 million.
How will this affect my existing forgiveness application?
If your income exceeds $150,000, it may not. If the number is reduced, the process should be much easier.
A few weeks ago, the government simplified applications for forgiveness for companies with incomes less than $50,000, requiring only to state how much loan money was spent on payroll and how many employees the recipient can keep. The upper limit of the new bill is $150,000. Affected companies will not need to submit documents supporting their claims, but they should file for a full audit at any time.
If you have already applied for and received a forgiveness, then no new rules apply-complete. But you can try to get a second loan.