Jun. 6, 2020

Senate Passes Big Changes to the Paycheck Protection Program (PPP)

Senate Passes Big Changes to the Paycheck Protection Program (PPP)

We are hoping that you, your friends, and family have been safe and well during this very challenging and unsettling time. We know that so many people are confused by the numerous revisions in the PPP program especially the Forgiveness Portion. We have therefore created this hopefully easy to understand overview.
  • On Wednesday evening June 3rd, the Senate passed major changes to the Paycheck Protection Program which the House of Representatives passed last week, and it is expected to be signed into law shortly by the President.
  • Time for borrowers to use the funds for approved purposes are increasing from:
    • 8 weeks to 24 weeks
  • Percentage of Non-Payroll expenses are decreasing from:
    • 75% to 60%, meaning that MORE non-payroll expenses can be included when calculating the amount of forgiveness
  • Up to 40% of the following Non-Payroll expenses can be used in calculating the amount of forgiveness:
    • Mortgage Interest
    • Rent
    • Utilities
  • It is possible that the lenders will interpret sections of the law differently, for example the bill states:
    • Borrower shall use up to 60% of the covered loan amount on payroll costs, which could possibly be interpreted that if a borrower’s payroll costs are only 50% that “could possibly” eliminate the ability to have part of the funds forgiven
  • Our suggestion is when at all possible, during this 24-week period, keep payroll costs at least 60% of the funds received to avoid any confusion. It is important to maintain excellent books and records
  • Increase the time frame for rehiring full-time equivalent employees (FTE) from:
    • June 30, 2020 to December 31, 2020
  • If a borrower still is not able to rehire at its prior FTE level by December 31, 2020 the loan still can be forgiven if they can establish:
    • They were not able to rehire the employees that were working on February 15, 2020, or they were not able to rehire similar qualified employees by December 31, 2020
    • Their business revenue was not able to recover to the same level before February 15, 2020 due to the new regulations imposed because of the COVID 19 pandemic
  • Borrowers who received PPP funds can continue to defer 50% of their portion of the FICA tax until December 31, 2021 and the balance deferred until December 31, 2022
We recognize that there is significant disruption to the business community and general employment because of COVID 19. The harsh reality for some, is that business as usual may not be possible and every business owner will face a set of challenges which are individually unique.

Kensington has been a solutions provider for over 21 years; we welcome the opportunity to better understand your needs and how we can help you find the right solution that makes sense for you.

What does YOUR recovery look like?
  • Time to Re-Build in order to Continue Operations Long-Term
  • Time to Re-Build in order to Sell
  • Time to Re-Build in order to Acquire Competitors
  • Time to Re-Build in order to Acquire Synergetic Companies
  • Time to Close Down
We can help:
  • Sell your business - we have many active, serious, qualified buyers looking to acquire
  • Find investors - we have many active investors looking for passive, strong, business investments
  • Acquire - it might be time to acquire a competitor or synergistic business for your company
  • Re-Structure your debt
  • Re-Structure your long-term lease obligations
  • New Business - Help educate on many new business opportunities; many are COVID resistant
Most importantly whatever your plan is, please continue to stay safe and well.

Click here to read changes to the CARES Act as of June 3, 2020 -

Contact Adam Stein or Ken Stein to Learn More 

516-626-2211

Email: Ken_Stein@KensingtonCompany.com

 

The Kensington Company
185 Roslyn Road, FL 1
Roslyn Heights, NY 11577

516-626-2211

www.KensingtonCompany.com