1) Can my business borrow more money? Yes, if you have had a PPP loan in the past and you meet all the following requirements:
- There has been at least a 50% reduction in gross receipts from 1/1/20 to 3/31/20 or 4/1/20 to 6/30/20, as compared to the same period in 2019.
- Borrower employs no more than 300 employees.
- New loan cannot exceed $2,000,000 and total cannot exceed $10,000,000 in SBA Loans (including PPP loans).
2) Borrowers with
loans under $150,000 will
not be required to submit the current application for forgiveness. They must simply attest to a good faith effort to comply with PPP Loan requirements, but the attestation may be audited and reviewed by the SBA to ensure against fraud.
Borrowers with
loans between $150,000 and $2,000,000 will not be required to submit formerly required lender documentation, but must certify the existence of the documentation and retain this documentation etc. for 3 years after the application for forgiveness is filed.
So, this will not make things any easier for these businesses - just easier for the banks.
3) Permitted/Forgivable Expense List was expanded. 60% of the total loan amount still needs to be spent on payroll costs (payroll, group health insurance and pension contributions). The other allowable expenses for forgiveness were utilities, interest, and lease payments. These are allowable still, but the following would be added if this bill is passed:
- Software and cloud computing expenses
- Property damage expenses
- Supplies Costs – expenditures to a supplier pursuant to a contract for goods that was in effect prior to 2/15/20 that are essential to the business’s current operation
- Expenses to protect workers for health and safety guidelines related to COVID-19 between 3/1/20 and 12/31/20
4) Deductibility of PPP Forgivable Expenses was not addressed. The IRS came out with Notice 2020-32 that said that the PPP expenses that result in forgiveness are not deductible for tax purposes. This was not the original intent of the original act, and it has been thought that Congress might override this, however this proposed bill does not address this issue – so this will cause profit to be higher than you might potentially think.
