PPP: While Congress Tries to Reach an Agreement, New Data Causing Concerns

PPP: While Congress Tries to Reach an Agreement, New Data Causing Concerns

12/18/2020 Tags: Announcements, In the News, COVID-19, PPP

Members of Congress are still hammering out the details of a $900 billion COVID-19 relief bill. As it stands now, the bill has more money for the Paycheck Protection Program, as well as funds for another round of stimulus checks and to help distribute the vaccines.

For the PPP portion of the bill, there’s about $300 billion that’s aimed at helping small businesses who can show they’ve suffered economic hardship because of the pandemic.

The new plan — called PPP2 — is meant for borrowers who exhausted the first round of funding. It also expands expenses that can be forgiven to include facility investments, personal protective gear, and supplier costs.

It’s possible borrowers will need to move quickly if and when PPP2 passes. If you’re thinking of applying for another round of PPP, start working with your financial professional now so you’re ready.

Meanwhile, earlier this month, the Small Business Administration released more data about businesses that received PPP loans. As happened previously, there were some concerning trends. Some applications didn’t list business names or addresses.

Other issues included wrong information on the applications, loans going to companies that were no longer allowed to do business with the federal government, and companies receiving more than one PPP loan.

As more and more businesses get ready to apply for PPP loan forgiveness, it’s important to be cautious.

The SBA has said that just because a lender OK’d a loan doesn’t mean the SBA will automatically forgive it.

“… [T]he lender’s approval does not reflect a determination by SBA that the borrower is eligible for a PPP loan or entitled to loan forgiveness,” the SBA wrote. “All PPP loans are subject to SBA review and all loans over $2 million will automatically be reviewed. Eligibility and compliance will be reviewed during the loan forgiveness process.”

If you have questions about your PPP loan or any other business-related issues, please let us know how we can help.

This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.

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