In Question 80, the IRS declares that in a case where two or more companies are aggregated and treated as a single employer because they are under common ownership, and one company receives a PPP loan, all companies within the aggregated group are prohibited from claiming the employee retention credit.

The aggregation rule, explained in Question 25 online, treats all companies under common ownership as a single employer for purposes of the credit.

Source: National Law Review

The bill passed easily by a vote of 417-1.

The legislation expands the terms of the loans from the Paycheck Protection Program, which was created by the $2.2 trillion coronavirus relief package that Congress and the Trump administration enacted in late March.

But lawmakers say that additional changes to the program are needed following complaints from small businesses that they’re not able to take advantage of the loans under the current terms, particularly those that still face coronavirus-imposed safety restrictions. They are not in a position to rehire all their employees in the time currently required to qualify for loan forgiveness.

The bill would give small businesses up to 24 weeks, up from the current eight weeks, to use the loans and extend the deadline for rehiring workers from June 30 to the end of this year.

It would also allow small businesses to spend more of the money on non-payroll costs. The current terms of the loans require recipients to use 75 percent of the funds on payroll and up to 25 percent on other costs to qualify for loan forgiveness. But the legislation would change the ratio to at least 60 percent on payroll and up to 40 percent on rent, overhead and other costs.

The bill now heads to the Senate, which left for its Memorial Day recess last week before taking action on its own version of legislation to make changes to the small business loans.

The Senate version is largely similar to what the House has passed, but it only extends the timeframe for small businesses to spend the funds to 16 weeks instead of 24.

Source: The Hill

Currently, the government will forgive PPP loans after eight weeks if businesses use the funds to maintain their workforce. But recipients of the funds have been lobbying Congress and the administration to give them more time to spend the money, along with more flexibility about how to use it. For now, 75 percent of the funds must be spent on payroll.

There is growing support among lawmakers for extending the timeline to 24 weeks.

Making the change “should be easy,” Trump said Monday, adding, “That’s like one of the easiest requests I’ve ever heard.”

Mnuchin said officials are working on a “technical fix” that has bipartisan support in Congress, though he wasn’t sure if 24 weeks was the best window.

Source: Politico

Observers expected a repeat with the second round of funding that launched April 27, but two weeks after Congress injected another $310 billion into the program, there is plenty of cash left.

As of late last week, more than 40 percent of the funds remained available in the Paycheck Protection Program. Lenders had approved nearly 2.5 million loans worth more than $185 billion, leaving at least $125 billion remaining, according to the Small Business Administration (SBA).

Part of the diminished demand could be a response to public outcry over multi-million-dollar companies tapping the aid, which was designed to help small businesses. Or, it could be the growing concern among small business owners that the PPP loans simply do not meet their needs.

In order for the money to eventually be forgiven, owners must spend at least 75 percent on maintaining payroll. The remaining 25 percent can be spent on operating costs like rent and utilities, but may not go toward mortgage principal or pre-payments. Money spent on non-qualifying expenses must be repaid at an annual rate of 1 percent within two years.

Information on the forgiveness process has caused confusion, hence creating worry among business owners that they may be on the hook for the money.

As a result, some banking groups are pushing the SBA and Treasury Department to issue a standard forgiveness form for borrowers and to create a calculator so that every bank produces the same outcome, Reuters reported.

“From a banking perspective, we are really acting as a middleman here. We don’t want to carry these loans on our books,” David Pommerehn, general counsel of the Consumer Bankers Association. “We see this as potentially a bigger mess than the funding process.”

Source: Fox Business

Proposals include extending the number of weeks that small businesses can spend money from the government’s forgivable loans under the Paycheck Protection Program and allowing businesses to use more of the funds for overhead costs.

Some lawmakers want to create new funding vehicles, including allocating aid to local governments to disburse as they see fit amid the coronavirus pandemic.

“What I know now for sure is Congress has to do more to promote the agenda of the smallest of the small businesses in the next coronavirus package,” said Sen. Ron Wyden (D-Ore.).

Wyden said the smallest businesses have struggled to access loans through the PPP. He has proposed direct cash payments equal to 30 percent of gross receipts, up to $75,000, to firms with $1 million or less in gross receipts and 50 or fewer employees.

The Senate returns to Washington this week, while the House delayed its return date due to health concerns over the coronavirus pandemic.

Business groups say the PPP, which provides forgivable loans to small businesses, is flawed. They are calling for measures that would ease the program’s mandate that employers maintain payroll and provide more generous forgiveness terms.

“This is a much larger and more systemic crisis than PPP was designed for,” said John Lettieri, chief executive of the Economic Innovation Group, a bipartisan think tank. “It needs to be a broader, more flexible program and a longer-term program to help the business meet its entire range of costs and challenges,” he added.

PPP borrowers must spend 75 percent of their loans on payroll expenses to have them fully forgiven, which is proving a challenge for small businesses that are still navigating state-mandated closures or have funding needs beyond employee pay.

Another PPP limitation, advocates say, is that forgiveness applies to eligible expenses—including payroll and certain overhead costs—during an eight-week period that starts once the loan is made. With social-distancing measures, staffing up to pre-pandemic levels in eight weeks is not feasible.

The Small Business & Entrepreneurship Council has suggested the window of time allowed for loan forgiveness be expanded at least 24 weeks; the Economic Innovation Group has called for 20 weeks.

Looking ahead, other lawmakers have issued proposals that envision small-business aid outside the PPP’s bounds.

Sens. Steve Daines (R-Mont.) and Cory Booker (D-N.J.), for example, crafted a measure that would complement PPP by sending $50 billion to cities, counties and states for creating and expanding local coronavirus relief funds that could offer small businesses financing options such as grants and loans.

The PPP’s first $350 billion appropriation was quickly exhausted, and businesses have already snapped up $175 billion of the additional $320 billion that lawmakers provided, raising questions about whether the program can meet small-business demand.

Treasury Secretary Steven Mnuchin has said he doesn’t expect the program to receive an additional round of funding. Larry Kudlow, President Trump’s top economic adviser, said Sunday on CNN he wouldn’t rule out the possibility of allocating more money to PPP, but that the administration wants to focus on other measures, such as a payroll tax holiday for workers.

Some lawmakers have called for wage subsidies in the next wave of relief. Such aid could offer a lifeline to small firms. Nearly 50 percent of small businesses had a cash buffer of less than 15 days, according to research from the JPMorgan Chase Institute.

Source: Wall Street Journal

The Senate passed the $484 billion bill and sent it to the House. President Trump is expected to sign the legislation quickly.

Funds for the first Payroll Protection Program, a $350 billion allocation established to help small businesses make payroll during statewide shutdowns, were depleted last week. The bill in the works now replenishes that fund with $320 billion.

Analysts anticipate that the new fund could be depleted by early next week. Association members who have not yet pursued the loans, which carry a 1 percent interest rate but are forgiven if business owners use them primarily to keep their workforce employed, are urged to act quickly. A new member benefit that offers no-cost consultations with experts on the loan process can help. (See next story.)

Of the $310 billion that will be available for loans, $60 billion will be set aside for small, midsize and community lenders. The loans are intended for businesses with fewer than 500 employees, but language in the first round allowed restaurants and hotel chains to participate regardless of how many people they employ. That led to tens of millions of dollars in loans going to national companies. Rules are tightened on this round.

A separate program, the Economic Injury Disaster Loan (EIDL) fund, aimed at quickly delivering a mix of grants and loans, gets $60 billion in the new legislation. EIDL funds will be available to farmers after lobbying by the American Farm Bureau Federation. Farmers and ranchers were previously only eligible for the PPP loans, but some had been turned away by confused lenders.

The package, which lawmakers dubbed an interim emergency bill, also includes $75 billion for hospitals and $25 billion for testing.

Source: Wall Street Journal

If you have received funds through the Payroll Protection Program (PPP) or hope to secure a loan in this next go-round, you likely have questions about the right ways to spend the money to assure the government forgives the loan.

Kcoe Isom has compiled answers to frequently asked questions related to PPP. PDF Link

Wells Fargo announced Sunday it was bowing out of the Payroll Protection Program (PPP). The bank on Saturday accepted loan applications but on Sunday it said customers and other businesses that hadn’t yet applied would have to go elsewhere.

Wells Fargo said it would target businesses with fewer than 50 employees and non-profits among the applications it had already received. The bank’s abrupt departure from PPP could shut out some of its small business customers, which is significant because the bank arranged more small business loans than any other lender in the U.S. last year.

Most U.S. banks are processing loans only for existing clients.

The PPP offers 1 percent interest loans to business with fewer than 500 workers. Borrowers who don’t lay off workers in the next eight weeks will have their loans forgiven, as well as the interest. On Monday morning, the Small Business Administration said more than 100,000 loans totaling $30 billion had been approved and funded under the program.

PPP is designed to limit the swelling number of workers applying for unemployment, with Congress aiming to distribute as much as $349 billion in aid to small businesses.

A number of the nation’s largest lenders on Friday delayed taking loan applications. Many bankers blamed the hitch on the U.S. Treasury Department not finalizing rules until less than a day before the kickoff.

As of Sunday evening, Citibank was still not accepting loan applications. But the bank said that once it began processing loans it planned to accept applications until June 30.

Members can find the PPP loan application at .
The Association has revised its online resource page that offers members tools and information in response to the pandemic. It is organized to offer state-specific information and a condensed menu of resources that includes templates and forms, answers to frequently asked questions, and the latest on federal regulations.

Sources: CBS, Wall Street Journal