HR Magazine quoted Haynes and Boone, LLP Associate Brent Beckert in an article about how businesses that received loans through the Paycheck Protection Program (PPP) may be eligible for a second loan if they meet certain criteria.
Here is an excerpt:
Congress passed the Consolidated Appropriations Act, 2021 (CAA) in December 2020, which included a $900 billion COVID-19 economic relief package. Among other provisions, the CAA extended and modified the PPP.
Applying for Forgiveness
PPP loans cover an eight- to 24-week period. Employers can apply for loan forgiveness if the following criteria are met during the covered period:
- Employee headcount and pay levels are maintained.
- Loan funds are spent on payroll costs and other eligible expenses.
- At least 60 percent of the funds are spent on payroll costs.
For the second draw, employee headcount and compensation levels must be maintained in the same manner as required for the first draw.
Employers should keep copies of canceled checks, bank statements, utility bills, mortgage statements and lease agreements to prove that payments were made for covered expenses.
"We always encourage employers to document, document, document," said Brent Beckert, an attorney with Haynes and Boone in Dallas. Borrowers also should keep an open line of communication with their lenders and keep them in the loop on any judgement calls made in the application or forgiveness process, he said. "This will allow borrowers to fix issues before submitting their applications to the SBA and avoid unnecessary surprises later."
To read the full article, click here.