PPP and Other Pandemic Tips for Houston Area Businesses
The novel coronavirus pandemic has wreaked havoc on every sector of the economy. For-profit and not-for-profit businesses alike have been hurt by supply chain interruptions, lockdowns, and general economic unrest. Many companies have been able to take advantage of the Paycheck Protection Program (PPP) and other pandemic relief measures, but it can be difficult to know what to do now that the pandemic is (hopefully) winding down. Below, our experienced Houston business lawyer offers information about PPP loans and other pandemic-related tips for area businesses.
PPP Loan Forgiveness
The Small Business Administration established the Paycheck Protection Program to help small businesses weather pandemic-related economic troubles while maintaining their workforces. There were two rounds of PPP loans, and the program overall ended on May 31, 2021. The government has not announced any intention of issuing a third round of PPP loans.
One of the principal benefits of the PPP loan is that qualifying loans can be completely and totally forgiven. If your business applied for and obtained PPP loans during the first and/or second draw, you might be eligible for full loan forgiveness. The requirements for loan forgiveness under both rounds of PPP loans are the same.
To qualify for full loan forgiveness, the recipient must be able to establish that, during the 8-to-24-week period following loan disbursement:
- At least 60 percent of the loan proceeds were spent on costs relating to payroll
- All loan proceeds were spent either on loan proceeds or other eligible expenses, and
- Employee levels and compensation levels were maintained during the period
PPP loan payments are deferred for 10 months after the last day of the covered period; after 10 months, borrowers must commence loan repayment. Borrowers can apply for PPP loan forgiveness as soon as all loan proceeds for which the borrower is requesting forgiveness have been used. Borrowers can request forgiveness until the maturity date of the loan. Borrowers of $150,000 or less can benefit from a streamlined forgiveness request form and process.
Entities that do not plan to request loan forgiveness should account for PPP as debt, which may be helpful for tax and other purposes. If you are concerned about your accounting of the use of your funds or other forgiveness eligibility issues, reach out to an experienced business lawyer for advice and assistance. Your attorney can help you apply for loan forgiveness and resolve any concerns you may have.
Other Government Assistance
The state and federal governments offered a number of other assistance programs during the pandemic, some of which may still be available. These include:
Economic Injury Disaster Loans (EIDL). The EIDL program is another source of loans from the SBA to help businesses affected by the pandemic. The SBA is no longer accepting new EIDL applications as of this year, but they are entertaining reconsideration and appeal requests for EIDL applications received before January 1, 2022. They are also accepting requests for increased loan amounts for EIDL loans already approved.
SBA Debt Relief. The SBA is offering relief to SBA borrowers outside of the EIDL and PPP programs. The debt relief program is specific to other borrowers who received loan proceeds prior to September 27, 2020.
Other programs, such as Shuttered Venue Operators Grants, are no longer available, but one or more local and state-level initiatives might still be available. Talk to an experienced Texas business lawyer for advice on other programs that may be available to help your financial situation.
Find Exceptional Legal Help from a Seasoned Texas Business Attorney to Further Your Success
If your business entity faces legal issues in Harris County, get skilled and knowledgeable legal assistance by contacting the Houston business attorney Leigh B. Meineke at 832-706-0244.