Last night (Monday, April 6, 2020), the U.S Treasury and the Small Business Administration (“SBA”) released 18 answers to frequently asked questions (“FAQs”) about Paycheck Protection Program (“PPP”) loans.
The PPP is an important part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), enacted March 27, 2020. The PPP provides loans to small to mid-sized businesses (including certain not-for-profits). Part or all of the loan may be forgiven on a tax-free basis, if the borrowing business maintains its employee count and uses the loan for specific expenditures, of which at least 75 percent must be for payroll costs.
The PPP was hastily drafted in response to the dire need for funds to keep businesses open and their employees paid during this crisis. The wording of the statute raised many questions. Last week, the SBA issued a lengthy Interim Final Rule and released the loan application (Form 2483) and instructions on April 2. Yet, many questions remained.
Lenders, primarily banks, administer the program. They were supposed to start taking loan applications on April 3. Many did so. Many more did not, earnestly protesting that they needed more than a few hours to interpret the new guidance and adapt their systems. Each bank was, for the most part, on its own when it came to deciding the guidelines for accepting, documenting, and approving the loans.
The FAQs bring much clarity to the process. For the most part, the FAQs are friendly to borrowers. They are friendly to the lenders, too, as they remove many of the impediments to quickly throwing lifelines in the forms of the PPP loans to businesses and their employees.
The FAQs did not address every possible matter. Treasury and the SBA know that. They say that the FAQ document will be updated on a regular basis.
Kudos to the Treasury, the SBA, the conscripted lenders and the advocacy groups like the American Institute of Certified Public Accountants, who have lent considerable time and talent to the cause of battling this financial crisis.
The FAQs and their answers are pretty straightforward. You can find them by clicking the button below.
Treasury PPP FAQsIf you have questions after you read the FAQs, let us know. We’ll either answer your questions or pass them along to our advocates.
For more information check out HM&M’s COVID-19 Resources page.
HM&M COVID-19 ResourcesRelated Posts
Yesterday, the Senate passed the PPP Extension Act of 2021, which had previously been approved by the House, sending the Bill on to President Biden for his expected signature. This bill extends the time businesses ...
Addressing the Paycheck Protection Program (PPP) of the CARES Act — Many Changes and Clarifications from Prior Guidance. More Questions, Too. If you are anticipating applying for a PPP Loan, you need to understand these ...
Here is an overview of key provisions in the recent COVID relief legislation that affect individuals. The legislation is the COVID-related Tax Relief Act of 2020 (the “Act” or COVIDTRA) and the Taxpayer Certainty and ...
The United States Supreme Court has agreed to hear California v. Texas (known as Texas v. U.S. in previous litigation) Docket No. 19-840, in which several states are arguing that the individual mandate in the ...
Latest Blog
As this reminder was going to press, a Texas-based federal court issued a preliminary injunction prohibiting the federal ...
The landscape of gift and estate tax planning is experiencing significant shifts, with the upcoming 2026 sunset looming ...
Are you planning to make a Qualified Charitable Distribution (QCD) in 2024? Yes? Then read on … A ...
HM&M Updates
DALLAS, Dec. 11, 2024 – Springline Advisory, a trailblazing financial and business advisory firm, is proud to announce its partnership ...
Last month, Senior Manager, Pearl Balsara was invited to speak at the 2023 FPA DFW Annual Conference in ...
We are pleased to announce the winners of the 2022 HM&M Excellence Awards. Ronna Beemer, Keith Phillips, and ...