SBA recently issued its 11-page Paycheck Protection Program Loan Forgiveness Application, linked here . The application walks borrowers through a step-by-step process to determine loan forgiveness amounts based upon the information the borrower enters. It is of note that the application does require borrowers to provide documentation to support the payroll and non-payroll costs paid using PPP Loan funds. This includes the following information to prove the funds were properly spent on covered liabilities incurred, or which became due, during the 8-week period following . . . Read More
On May 13, 2020, the Small Business Administration (“SBA”) and Treasury Department (“Treasury”) released new guidance concerning good-faith certification for Paycheck Protection Program (“PPP”) loan requests. This new guidance clarifies that businesses seeking a PPP loan of less than $2 million will have made their request in good faith unless proven otherwise. SBA and Treasury released this guidance because they believe that borrowers within this safe harbor threshold do not have as much access to other sources of funds that larger loan . . . Read More
GovCon Co., a successful government contractor, receives an email from the billing or accounting representative of a trusted vendor, subcontractor, or teaming partner asking for payment of an outstanding invoice stating, “Please note our new bank account information in your system for any current and future wire transfers.” GovCon Co. wires the money to this trusted business partner, believing it has satisfied its payment obligations. A few weeks later, the business partner calls and asks why its latest invoice has . . . Read More
On May 11, 2020, Congressmen Chip Roy and Dean Phillips introduced the Paycheck Protection Flexibility Act, new legislation meant to provide additional assistance to businesses impacted the coronavirus pandemic. This bill would make major adjustments to the current Paycheck Protection Program (PPP) should it become law. Some of the notable changes the bill would make to the PPP program include: clarifying that companies can spend the PPP loan funds past the initial 8-week period and still be eligible for forgiveness; . . . Read More
On May 8, 2020, Congresswomen Anna Enshoo and Cathy McMorris introduced the Caring for Startup Employees Act of 2020 , a bipartisan piece of legislation aimed at granting more economic assistance to startup companies through the Paycheck Protection Program (PPP). Should this bill become law, it would dramatically increase the number of companies eligible for PPP loans. Under current Small Business Administration (SBA) guidance and regulations—specifically the agency’s “affiliation rules”—many startups are unable to receive PPP funds because they do not have a majority shareholder. The Caring for . . . Read More
In light of the public health emergency caused by COVID-19, the Equal Employment Opportunity Commission (EEOC) announced that it will delay collection of EEO-1 Component 1 data until March 2021. Under federal law, businesses with at least 100 employees and federal contractors with at least 50 employees and a federal contract of $50,000 or more generally must file an EEO-1 form each year. This development gives government contractors a one-year extension to file their 2019 Component 1 data. Many employers . . . Read More
On May 6, 2020, members of the Senate Finance Committee introduced the Small Business Expenses Protection Act of 2020 (“the Act”), legislation that would allow some small businesses to deduct from their taxes expenses paid with their forgiven Paycheck Protection Program (“PPP”) loan. Should this bill become law, it would greatly modify current regulations surrounding tax-deductible expenses for small businesses. On April 30, 2020, the Internal Revenue Service (“IRS”) issued a notice stating that no tax deduction is allowed for an expense that results in PPP loan forgiveness. . . . Read More
The timing and substance of the next COVID-19 relief bill may hinge on the issue of liability. . . . The liability issue gathered steam with comments made by President Donald Trump before he signed an Executive Order designed to keep meat and poultry plants operating. Trump said the E.O. would “solve any liability problems” those companies are facing. Issued using the authority of the Defense Production Act, the E.O. “clarifies which safety standards companies must follow — those found in the joint . . . Read More
On May 5, 2020, the Small Business Administration (“SBA”) and U.S. Treasury Department (“Treasury”) revised their FAQ concerning the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and the Paycheck Protection Program (“PPP”). Of note, this new guidance clarifies PPP loan forgiveness amount calculations and extends the deadline for PPP borrowers to return loan proceeds. According to Question 40 of the FAQ, a PPP loan borrower’s forgiveness amount will not be reduced should the company make a good faith attempt, . . . Read More
