With enactment of the Paycheck Protection Program and Health Care Enhancement Act (H.R. 266) during the week of April 20, the PPP, which provides potentially forgivable loans to small businesses affected by the COVID-19 pandemic, received an additional $310 billion in funding. SBA began accepting applications April 27 to allocate the additional funds through the PPP to qualifying employers.
Loans made via the PPP are made on a first-come, first-served basis, and any roofing industry employers interested in applying are urged to do so as quickly as possible. The additional funding provided by Congress is expected to again be fully allocated before it meets all demand. View more information about the PPP.
Additionally, the Department of the Treasury and SBA released additional guidance regarding the Paycheck Protection Program that includes an FAQ document, which now contains Question 31 regarding the borrower’s certification that the loan is “necessary” with respect to other sources of liquidity to support the ongoing operations of the business. The answer to Question 31 notes that:
“In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must access their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application. Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere (as defined in section 3(h) of the Small Business Act), borrowers still must certify in good faith that their PPP loan request is necessary. Specifically, before submitting a PPP application, all borrowers should review carefully the required certification that ‘[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.’ Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business … Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith.”
Employers who already have received a PPP loan, as well as prospective applicants, are urged to review the FAQ document in its entirety. Further guidance from SBA still is expected regarding the potential forgiveness of PPP loans.
