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Daily Update COVID-19 From the Business Accountants at Wouch Maloney

Paycheck Protection Program Money Exhausted, What Options Remain?

Earlier today, news broke that funding for the Paycheck Protection Program was exhausted. The SBA posted the following message on their website“The SBA is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding. Similarly, we are unable to enroll new PPP lenders at this time.”

We have heard from clients, who were in different stages of the loan process, that their lender cannot proceed due to lack of funds. With the status of adding $250 billion in additional funding to the popular program in limbo, some lenders recommended that their clients contact their congress person. Many lenders continue to work on loan applications with the hope that additional funding will be approved.

Additional Relief Options For Businesses

Economic Injury Disaster Loans (EIDL)

The EIDL provides “vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing as a result of the COVID-19 pandemic. The Economic Injury Disaster Loan advance funds will be made available within days of a successful application, and this loan advance will not have to be repaid. This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by COVID-19.”

Main Street Lending Program

The Federal Reserve announced this program “will enhance support for small and mid-sized businesses that were in good financial standing before the crisis by offering 4-year loans to companies employing up to 10,000 workers or with revenues of less than $2.5 billion. Principal and interest payments will be deferred for one year. Eligible banks may originate new Main Street loans or use Main Street loans to increase the size of existing loans to businesses. Banks will retain a 5 percent share, selling the remaining 95 percent to the Main Street facility, which will purchase up to $600 billion of loans. Firms seeking Main Street loans must commit to make reasonable efforts to maintain payroll and retain workers.”

Employee Retention Credits

Employee Retention Credit applies to “qualified wages paid after March 12, 2020, and before January 1, 2021. The maximum amount of qualified wages taken into account with respect to each employee for all calendar quarters is $10,000, so that the maximum credit for an Eligible Employer for qualified wages paid to any employee is $5,000.”

If you do choose to use Employee Retention Credits, please know if the Paycheck Protection Program receives additional funding, you cannot take Employee Retention Credits and apply for a Paycheck Protection Program loan.

 

 

 

 

 

DISCLAIMER:  The WM Daily Update COVID-19, COVID-19 Business Resources and COVID-19 Client News Alerts and other related communications are 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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