Changes May Be on the Way to Improve the Paycheck Protection Program: How Could This Affect the Construction Industry?
The Paycheck Protection Program (PPP) was supposed to help small businesses – including those in the construction industry – stay afloat during the coronavirus. Unfortunately, it has had some issues. The good news is that the House has passed a Bill that would improve the PPP but it still needs to pass the other house of congress and be signed into law.
Keep reading to find out what is included in this Bill, how it can help construction companies, and what additional issues they may face. Then contact ECL Software at 800-625-5972 to learn how Just Do It Once can help you with all your fund control needs.
What the Loans Have Done and Not Done
The House has noted that they believe one of the items that must be followed through on to protect the economy from additional harm is improving the PPP. They say that the loans that have been issued have helped prevent layoffs all over the country – including countless construction layoffs – the benefits have remained limited by a number of issues that have become clear since the program was originally designed and implemented.
They point to the fact that the loans are supposed to only cover eight weeks, yet they are being issued for much more than this monetarily. The House notes that this makes it virtually impossible for companies to use them for payroll, as required, or even other legitimate expenses.
What the New Bill Would Do
The Bill that has passed the House would begin by extending the coverage period to 24 weeks, which would significantly increase the amount of time companies have to use the money for payroll. Second, it would revise the eligibility formula so that only 60% of the money be required to go to payroll, which is a 20% reduction from the current formula of 80% on payroll and 20% on on-payroll expenses.
The Bill would change the maturity period for the loans from just two years to five years, and allow those who received the loans to defer their payroll taxes through the end of the year. When you combine all of these measures, they could make a big difference and help protect many construction jobs – at least in the short-term.
What’s Next for the Bill
The Senate now has the Bill and is encouraged to pass it quickly. It would then reach the desk of Donald Trump to sign it. Experts say that delaying these changes to the PPP could have significant impacts on the economy. Remember that at ECL Software we can help with aspects of your fund control needs that could help you keep your projects moving forward more smoothly. Call us now at 800-625-5972 for a free demo.