Share this on FacebookApril 16th, 2020 | Published by NEW Construction Alliance
According to CNN, “the $349 billion emergency small business lending program officially tapped out. The Small Business Administration officially ran out of money for the Paycheck Protection Program (PPP), according to a message for lenders posted on the administration's website.”
There are talks on Capitol Hill about doing a second round of funding and Treasury Secretary Steven Mnuchin is in discussions with legislative leaders to that end. But that would require Democrats and Republicans to find a solution to their current stalemate about the best way to throw more money at the situation.
Based on recent reporting, it appears though the best solution would be reopening our local, state and federal economies as soon as possible—with proper safety measures being taken.
Meanwhile, Construction Dive reports that all that glitters may not be gold when it comes to taking PPP monies.
The “Coronavirus Aid, Relief and Economic Security Act (CARES Act) offers several tax-based incentives to business owners based on retention of employees. Another bill passed prior to the CARES Act, the “Family First Coronavirus Response Act,” likewise ties some tax benefits to treatment and retention of the company’s workforce.
But as the article points out, “all of these benefits may go away if you've received a loan under the $350 billion pot of money the stimulus created to help businesses cover their operating expenses during the downturn.
“Tax specialists say the exact interplay between the forgivable loans, which are available to companies with 500 employees or fewer, and the tax benefits, which are for all employers, big and small, won’t be known until the IRS and Small Business Administration (SBA) put rules out. But based on statutory language, the two programs don’t fit well together in some respects.”
Be sure to check with your tax advisors to make sure you are protecting your company from any unforeseen consequences from utilizing this program. If you don’t have a tax specialist, the Alliance has two great members who can help you out: Baker Tilly and Wipfli.
You can read the full CNN article here and Construction Dive’s coverage here.