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Josh Crisp

The Paycheck Protection Program (PPP) has been an effective tool in helping Atlanta and Georgia businesses manage cash flow and working capital during the COVID-19 pandemic. In fact, the Small Business Administration (SBA) reported on May 31st they have issued more than 136,000 loans totaling more than $13B. These numbers are stunning and also reflect the immediate need faced by borrowers.

Right before the Memorial Day weekend, Treasury issued an updated Interim Final Rule on loan forgiveness requirements (the Rule). The updated rule includes information about the Alternative Covered Period, bonuses and hazard pay, full-time equivalent (FTE) reductions, and more.

At long last, borrowers now have the information needed to review spending policies and begin preparing the forgiveness application. There were a number of topics addressed including a new Alternative Covered Period, 75%/25% expense allocation update, documentation requirements, and a new FTE Reduce Safe Harbor.

For businesses and nonprofits, the Paycheck Protection Program has been a source of much needed funding to stabilize operations during the COVID-19 emergency. In fact, during the initial round of funding over 48,332 loans totaling $9.4B were approved for Georgia applicants alone. These loans have been essential in helping small businesses manage payroll and other necessary expenses. However, there was also unwelcome news when it was reported that publicly traded companies had received $365M in PPP loans.

Last week, on April 30th, the IRS issued Notice 2020-32 which offers important guidance on related tax issues for PPP borrowers seeking loan forgiveness.

The new round of funding means that businesses not able to previously receive a loan will now have the opportunity to do. However, the timeframe for application preparation is short as the SBA announced applications will start being accepted on Monday, April 27, 2020, at 10 EST.

The announcement that the initial $349B in funds had been exhausted also served as an important reminder to recipients about the loan forgiveness process. The rules require borrowers to spend at least 75% of funds on payroll expenses and no more than 25% on qualifying mortgage interest, rent, and utility expenses. However, many questions have emerged about best practices for managing loan funds to ensure loan forgiveness.

The challenges for certain Atlanta business owners continue to grow as the Small Business Administration (SBA) announced on April 16, 2020, the Paycheck Protection Program has exhausted it’s initial funding of $349B for COVID-19 business relief.

Atlanta businesses seeking a cash flow infusion due to the COVID-19 emergency have federal, state and local loan options. Since not every loan features the same terms and benefits it’s important to closely review terms to determine the best opportunity.

In the construction industry where finding skilled labor has been a persistent issue for years, it appears the disruptions are also taking a toll. According to the Associated General Contractors (ACG) Coronavirus Survey Results, construction employment has reduced by 29,000.