The minimal requirements for loan qualification, designed to speed relief, have allowed employers to obtain PPP loans even if they aren't in financial distress and have no need or intention to lay workers off.
On Tuesday the Senate passed a bill that provides another $310 billion for PPP. It places no further limitations on loan forgiveness, and the self-certification of economic harm required by applicants remains a nebulous statement that "Current economic uncertainty makes [the] loan request necessary to support the ongoing operations" of the business.
It may be too late to limit access to PPP loans to those who truly need to borrow, but it isn't too late to limit forgiveness.
Those in between would be eligible for forgiveness on a sliding scale: 10% of the loan if 2020 gross receipts are 90% or higher of 2019's; 30% forgiveness for 80% to 90% of 2019 gross receipts; 50% forgiveness for 70% to 80% of 2019 gross receipts; and 75% forgiveness for 60% to 70% of 2019 gross receipts.
In no case would forgiveness exceed the loan amount less after-tax income.
For tax-exempt nonprofits, loan forgiveness would be limited based on net assets.
No forgiveness would be available to entities whose 2020 net assets exceed those for 2019 or are more than twice the loan amount.
https://www.wsj.com/articles/ppp-loan-forgiveness-needs-limits-11587573118?mod=hp_opin_pos_2
On Tuesday the Senate passed a bill that provides another $310 billion for PPP. It places no further limitations on loan forgiveness, and the self-certification of economic harm required by applicants remains a nebulous statement that "Current economic uncertainty makes [the] loan request necessary to support the ongoing operations" of the business.
It may be too late to limit access to PPP loans to those who truly need to borrow, but it isn't too late to limit forgiveness.
Those in between would be eligible for forgiveness on a sliding scale: 10% of the loan if 2020 gross receipts are 90% or higher of 2019's; 30% forgiveness for 80% to 90% of 2019 gross receipts; 50% forgiveness for 70% to 80% of 2019 gross receipts; and 75% forgiveness for 60% to 70% of 2019 gross receipts.
In no case would forgiveness exceed the loan amount less after-tax income.
For tax-exempt nonprofits, loan forgiveness would be limited based on net assets.
No forgiveness would be available to entities whose 2020 net assets exceed those for 2019 or are more than twice the loan amount.
https://www.wsj.com/articles/ppp-loan-forgiveness-needs-limits-11587573118?mod=hp_opin_pos_2
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