Payment Protection Plan Round Two

As we head into the weekend there is continued pressure for Congress to pass another relief bill. Current negotiations on the Emergency Coronavirus Relief Act of 2020 appear to be getting closer to passage. Major components of this relief include another round of Paycheck Protection Program (PPP). While this legislation is still being negotiated the PPP section of the Act will be very similar to the first relief program. Eligibility of the proposed PPP loan are:
  • Limited to small businesses with 300 or fewer employees.
  • Sustained a 30 percent revenue loss in any quarter of 2020.
  • Expansion of qualified forgivable expenses to include supplier costs and investment in facility modification.
  • Loan forgiveness is simplified for borrowers of $150,000 or less.

The objective is to make the application process similar to the first program. We want to alert you to this proposed legislation to prepare the documentation needed for the application of a new loan. The program will be handled by local banks so documentation may vary from bank to bank. The legislation in its current form has no restriction on prior recipients of a PPP loan as long as you meet the eligibility rule of the current loan program.

Another important item for prior PPP loan recipients is the deductibility of the expenses of a forgivable PPP loan. Congress has stated their intent was to make these expenses deductible but the Treasury Department has been pushing back on this item. We will continue to monitor this legislation and will provide additional guidance if passed.

William Steinhart, CPA
Tax Director
cHb Advisors, LLC
4111 Telegraph Rd. Suite 300 | 3rd Floor PNC Bank
Saint Louis, Missouri 63129
Phone (314) 845-6680 Ext 3
Fax (314) 845-6682
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