Let us talk through each of the points of the Paycheck Protection Program Flexibility Act that bring up new concerns:
The Paycheck Protection Program Flexibility Act “extends the window businesses have to use the funds from eight weeks to 24 weeks”
This is a great thing that should have been established since the beginning. Instead they will wait to pass this till thousands of businesses have already pass their 8th week. This is not fair for those businesses.
For Sole-Props who previously calculated their forgivable amount as
100,000 x (8/52) = 15,385 is that now 100,000 x (24/52) = 46,153
More importantly, by now you know there will be new strings attached to this generosity. See below…
The Paycheck Protection Program Flexibility Act pushes “back a June 30 deadline to rehire workers to December 31, 2020”
Cool, so you got the money but NOW to obtain loan forgiveness you will need to retain the same FTE count or greater as of December 31?
Does this mean that all businesses that are already 1/2 into the 8 weeks need to lay everyone off again and save the money until December 15 to bring people back to ensure they hit the FTE head count?
What other regulations will be tied to this?
The Paycheck Protection Program Flexibility Act “provides more leeway on loan forgiveness for business owners who show they could not rehire workers or reopen due to safety standards”
How does this play out with a December 31st date? How about they just make this much easier and anyone who received less than the average loan amount of $114,000 is automatically forgiven?
The Paycheck Protection Program Flexibility Act “extends the time recipients have to repay the loan”
These loans can be sold to the third market, a fact that no one is talking about. In other words, the big banks made 1% to 3% per loan based on the size. The banks who processed those loans can now sell them off at a discount to smaller lenders who will be responsible for assigning loan forgiveness. If it benefits the new lenders to make money of the interest of the loans, why would they consider forgiving the loans? Wouldn’t they make more money if the loans were stretched longer?
The Paycheck Protection Program Flexibility Act “lets companies that get loan forgiveness defer payroll taxes”
My parents always taught me you cannot get blood out of a turnip, well wake up small business owners, you are being bled dry right now!