Tag Archives: Paycheck Protection Program

Paycheck Protection Program: Is it Helping Small Businesses?

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The title of this post is a touch misleading. Of course the Paycheck Protection Program is helping small businesses. But is it helping the right ones, and is it helping enough of them? Our post last week on the Paycheck Protection Program elicited a lot of feedback. From this feedback and what we’ve heard anecdotally, it’s been tough for many small businesses to get these loans.

But there may be ways for Congress, the SBA, and lenders to make this program–or any similar program that Congress is considering–to help out small businesses more equitably. Below are some questions that policy makers should consider when modifying the Paycheck Protection Program or crafting a similar program in the future.

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SBA’s Paycheck Protection Program: What’s Going On with Affiliation?

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Since the SBA’s Paycheck Protection Program went into effect last Friday, there has been considerable confusion about eligibility and, in particular, what affiliation rules apply to program applicants. The affiliation rules are important for helping companies determine if they can seek out these important loans.

In this post, we’ll let you know which affiliation rules apply to the program’s applicants and explain some exceptions to the applicable affiliation rules.

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UPDATE: Paycheck Protection Program Form Now Does not Disqualify Businesses for Foreign Ownership

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UPDATE: The form this post references has been revised to ask whether the United States is the “principal place of residence for all employees of the Applicant included in the Applicant’s payroll calculation”.

Based on the text of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the fact that a company has foreign owners shouldn’t necessarily disqualify it from participating in the Paycheck Protection Program (PPP).

But the form used to apply says otherwise.

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Paycheck Protection Program under the CARES Act: Keeping Small Business Workers Employed

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In the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Congress appropriated $349 billion for loans to small businesses. These loans, issued under the Paycheck Protection Program, are aimed at helping small businesses keep their workers on payroll by providing loans, up to $10 million, that are partially forgivable.

Let’s explore some of the details of this important program instituted as part the U.S. Government’s response to COVID-19.

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