Promoting, protecting, and researching the optimal use of incentives, corporate gifts, rewards, recognition, promotional products and related promotions in business.

 Current Legal/Legislative Updates

Payroll Protection Program Application Deadline Extended to August 8, 2020

We previously reported to you that so far this year Congress has allocated up to $659 billion to small businesses in PPP covered loans that would be forgiven if the borrower meets various statutory and regulatory requirements regarding retaining its employees.  On June 5, we reported that Congress enacted the PPP Flexibility Act, which made it easier for small businesses to have their loans forgiven.  The PPP Flexibility Act did not extend the period for getting a PPP loan beyond the original June 30 deadline, however. See IFI’s Washington Update.

As the June 30 deadline passed, and a substantial amount (perhaps as much as $130-135 billion) of the funds Congress had allocated to PPP covered loans remained unused, Congress extended the period for getting a PPP covered loan from June 30 to August 8 and the President signed the bill. This extension gives eligible small businesses that have not done so already another five weeks to apply for PPP covered loans. If your company meets the guidelines and you have not applied for a PPP loan, please consider doing so.  For an application click here.

As of this writing, the SBA has indicated that it has approved 4,866,647 loans in the total amount of approximately $521 billion, with the average loan amount is about $107,000.

Important Legislative Changes to Small Business Assistance (PPP Loans) in the CARES Act of 2020

On March 31 and April 4, 2020 the Incentive Federation’s Washington Updates summarized the most important provisions of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) of 2020, an omnibus law aimed at providing relief to big businesses, small businesses, households, the unemployed, mortgage holders, and those with student loans, among others.  This update reviews Title I of the CARES Act, which provided relief to small businesses through Paycheck Protection Program loans, and it analyzes the important ameliorative changes Congress made in the Paycheck Protection Program loan process through the Paycheck Protection Program Flexibility Act (PPEF Act) enacted on June 5, 2020. Some key and favorable enhancements from the newly passed legislation are noted in IFI’s news release and below:

1. The most important such change is that the requirement that 75% of the loan forgiveness amount must be attributable to payroll costs has been amended.  Henceforth, an eligible small business recipient (borrower) is only required to use 60% of the covered loan for payroll costs to receive loan forgiveness.  This important ameliorative change allows small businesses to spend more on overhead and fixed expenses such as utilities and still receive loan forgiveness.

2. The new law permits current borrowers under the PPP to extend the eight-week period to 24 weeks if they elect to do so.   Small businesses that borrow under the PPP on or after the date of enactment of the PPPF Act (June 5, 2020) will have a period of 24 weeks, but the covered period must end on December 31, 2020.  Congress extended the period to 24 weeks to allow borrowers to have most, if not all, of their PPP covered loans forgiven.  Small business borrowers can use the period of 24 weeks to restore their workforce to levels before COVID-19 to achieve full loan forgiveness.  The period for doing so has been extended from June 30 to December 31, 2020.

The new rules also confirm that June 30, 2020, remains the last date on which a PPP loan application can be approved.

3. The PPPF Act has two new provisions that would assist borrowers in having the full amount of their PPP covered loan forgiven even if they are unable to rehire their pre-existing workforce.

4. The PPPF Act extends the minimum maturity term (repayment period) for PPP loans for new and existing borrowers from two to five years.

Other more flexible and favorable provisions in the PPEF Act are outlined and explained in the Federation’s most recent Washington Update of June 5, 2020, provided by IF’s Legal Counsel, George Delta, Esq. Note the last two pages of the Update for key changes. The original analysis of the CARES Act of 2020 can be reviewed below.

Small Business and Other Relief in the CARES Act of 2020

The recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) of 2020 is an omnibus law aimed at providing relief to big businesses, small businesses, households, the unemployed, mortgage holders, and those with student loans, among others.  It is a $2 trillion (and possibly up to $6 trillion) bazooka that Congress has aimed at the economic emergency brought about by COVID-19. 

IFI’s Legal counsel, George Delta, has written a detailed summary of the CARES Act that focuses on financial relief to businesses and individuals affected by the COVID-19. The CARES Act is a complicated and often overwhelming piece of legislation that is 880 pages long that will make fundamental changes to the U.S. economy.  Delta’s Washington Update is not intended to be exhaustive; it attempts to summarize the most important provisions of the Act to provide a road map for those trying to understand what the CARES Act contains and how it may help them.

This report may also help sort out some of the confusing information we all are seeing in the news. We’re all aware of the tremendous impact the COVID-19 pandemic is having on the broad promotional industry and the millions of customers this industry serves. We’ll try to keep up with any breaking news that may be helpful to you as you meet the challenges of managing your businesses and maintaining employment.