PPP LOAN- MORE QUESTIONS ANSWERED
We have received a lot of questions about the PPP loans/grants now that businesses are receiving them. Here are some answers:
1. You have 8 weeks from when you get your money to re-hire your employees and pay them with the PPP money.
a. You can hire the same employees or different employees, as long as you hire the same number of full time equivalents that you had Feb 15.
b. You can have your employees return to work even if you are a non-essential business as long as you practice safe workplace rules (see below).
c. You can pay your employees to stay at home or work virtually from home.
d. You can pay them additional wages if you want, but you cannot pay them more than 25% less than their normal wages.
e. Money spent on payroll includes wages, the employees payroll taxes, bonuses, commissions, health insurance, vacation and any other wage related expense.
f. At the end of your 8 weeks you apply for forgiveness immediately. You will have 60 days to submit your documentation proving that you used the funds like you are required. If you have to lay off your employees after the end of the loan, you will not be penalized- the loan will still be forgiven.
2. Businesses who apply for this will need to certify that they were affected negatively by the covid and that the funds are necessary to continue your operations. What does this mean? (in general, if you can continue operating without the funds, or can’t show a financial need, then you probably shouldn’t apply-even if you are eligible). Here is the Q&A from the Treasury:
Question:Do businesses owned by large companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan?
Answer: In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application. Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere (as defined in section 3(h) of the Small Business Act), borrowers still must certify in good faith that their PPP loan request is necessary. Specifically, before submitting a PPP application, all borrowers should review carefully the required certification that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification .Lenders may rely on a borrower’s certification regarding the necessity of the loan request. Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith.
SAFE WORKPLACE RULES TO FOLLOW WHEN RE-HIRING
The state Department of Economic and Community Development created guidance for workplace rules. These mandatory protective measures that every workplace in Connecticut
—and any other business or nonprofit allowed to remain open during the pandemic—must follow. This is not a procedure for you to OPEN YOUR BUSINESS. The first rule is: employees who are able to work from home SHOULD BE WORKING FROM HOME. If you are a non-essential business and are re-hiring your employees with your PPP loan, you can bring back employees to your workplace as long as your business remains closed to the public and you follow these safe workplace rules.
UNEMPLOYMENT FOR INDEPENDENT CONTRACTORS, GIG PERFORMERS, SELF-EMPLOYED FILING STARTS TOMORROW
The CT Department of Labor’s unemployment website will be able to take applications from the self-employed, gig performers, independent contractors and others who were denied regular CT unemployment benefits starting Thursday, April 30.
Info on the PUA (Pandemic Unemployment Assistance) is here:
Here are some basic things:
1. This is for individual NOT eligible for regular unemployment: exhausted benefits, self-employed, those seeking part-time employment, lacking sufficient work history, gig performers, independent contractors.
2. You are also eligible for the FPUC ($600 per week) from March 29 to July 31.
3. You must file for regular unemployment first. Once denied, you then file through the PUA system.
4. If you applied prior to April 30 you will not need to re-apply through the regular unemployment system. HOWEVER, you will need to apply through the PUA system.
5. You will need documentation on your earnings (taxes, schedule C).
6. You will be asked about the covid effect on your employment.
7. You must be able and available for work (unless you have covid or caring for those with it, or other acceptable covid criteria)
8. These payments are taxable income, and they may affect other benefits you are receiving that are based on your income.
SMALL BUSINESS EMERGENCY RELIEF
The City of New London announced that the application for the Small Business Emergency Relief Grant (S.E.R.G) is ready for download on the city website at
Applications will be accepted between (May 1st-8th) and Awardees will be notified via email by EOD May 14th.
UNEMPLOYMENT STATISTICS BROKEN DOWN
The Connecticut Department of Labor today launched a
containing spreadsheets that breaks down information on people who have filed for unemployment in the state by age, industry, gender, and town. The public release of the information will provide a valuable insight to municipal and state governments for planning and budgeting purposes, and for developing responsible strategies for re-opening the state during the COVID-19 pandemic.