U.S. SBA Corrects Rulemaking on Paycheck Protection Program Loans for Construction Businesses
In a whirlwind of legislation, rulemaking, guidance, and answers to FAQs on the CARES Act, inevitably confusion arose related to business eligibility for the Paycheck Protection Program’s (PPP). Under the PPP, $349 Billion in loan funding is available for businesses impacted by COVID-19. Eligible businesses can borrow up to 2.5 times their average monthly payroll to cover costs such as payroll (mostly), as well as rent, mortgage interest, and utilities. And if certain requirements are met by the business, all or almost all of the PPP loan will be forgiven. Even putting aside the potential forgiveness benefit, the PPP loans offer favorable terms for businesses – low interest, no collateral, and no personal guarantees. Construction businesses clearly have a need for these PPP loans in an effort to blunt the immediate economic impacts of delayed, slowed, or stopped projects.
However, in a seeming contradiction to the CARES Act statutory language, which allowed businesses with 500 or fewer employees to apply for the PPP loans, the U.S.