We are reaching out with this updated bulletin as a result of substantive developments which impact numerous GST clients.
PPP: Round Two
The recent legislation by Congress authorizes a second round of PPP funding. We will send more information on this as we have it. We expect the SBA and Treasury to issue some guidance on this second round of funding.
The legislation reopens the Paycheck Protection Program so that some of the hardest-hit small businesses can apply for a second loan. The program stopped taking applications for the first round of loans in August.
The second loans appear to be limited to those with fewer than 300 employees that have seen drops of at least 25% of their revenue during the first, second or third quarter of 2020. It would also reduce the amount a borrower can receive from $10 million to $2 million, give businesses more flexibility on how they spend the money and simplify the forgiveness process for loans under $150,000.
Again, more details should be forthcoming later this week, or early next. Many GST clients will likely qualify for these funds, depending on guidance from Treasury/SBA around the qualifications. If you have not already applied for first round forgiveness, you should do so immediately.
Maryland Converts Relief Loans to Grants
Those Growth Solutions’ clients who applied for and received the $50,000 COVID relief loan through the State of Maryland, will now have those loans converted to grants, per Governor Hogan. It is important to note that many of these “loans” are still in process. Those who applied, should continue to follow up as more funding was added. Any funds still in process will be issued as grants.
We are reiterating our view that continued increases to monitored data points may lead to more restrictions or even a total rollback to “essential businesses being open” with possible shutdown of those deemed “non-essential”. We continue to believe significant risk from the incoming Presidential Administration which has repeatedly signaled shutdowns as a primary tool for reducing the spread of coronavirus. While these risks are somewhat mitigated by the two recently authorized vaccines, given the amount of time until ample supply is available, we encourage you to prepare and plan for potential restrictions on business.