All Small Construction Businesses Can Apply for a Loan Through the Paycheck Protection Program
With the passing of the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, people and businesses across the country will be receiving needed relief from the economic fallout of coronavirus disease 2019 (COVID-19). Small businesses, in particular, are being provided needed disaster relief in the form of forgivable loans through the CARE Act’s Paycheck Protection Program (PPP). However, there were certain companies at risk of being excluded from the PPP, including construction companies.
In this brief article, a coronavirus construction lawyer discusses new guidance from the Treasury Department that allows all small construction businesses to apply for loans through the PPP. If you have yet to apply for a loan, we suggest consulting with a Miami construction lawyer from Cotney Attorneys & Consultants who can discuss your options with you and prepare your initial loan application for you.
Editor's note: On the morning of April 16, the U.S. Small Business Administration announced that the PPP would no longer be taking applications. The White House and Congress are currently negotiating additional funding for the PPP as well as the Economic Injury Disaster Loan. Stay informed and be ready to apply for your PPP loan when funding is approved.
The New Guidelines
As reported by the Associated General Contractors of America (AGC), new guidance was released that now allows construction firms with 500 or fewer employees to qualify for a loan through the PPP. The prior concern was that construction businesses that meet the employees threshold would still not qualify for a loan due to their average annual income being too high. Once AGC raised concerns regarding the potential exclusion of small construction businesses, the Treasury Department clarified the requirements.
Please note, your business does not have to qualify as a small business concern in order to qualify for a loan. As stated on the PPP’s frequently asked questions page, “a business is eligible for a PPP loan if the business has 500 or fewer employees whose principal place of residence is in the United States, or the business meets the SBA employee-based size standards for the industry in which it operates (if applicable).” Bottom line: you are eligible for a loan through the PPP as long as your construction company has 500 employees or fewer.
Apply While You Still Can
Under the program, businesses are eligible for up to $10 million in forgivable loans as well as a $10,000 loan advance that doesn’t have to be paid back. It’s no wonder why so many businesses are applying during this difficult time. Loans will be given on a first-come, first-serve basis until the $349 billion program runs out of funding. If you are the owner of a small construction company, it’s imperative that you apply for a loan ASAP if you intend to do so.
At Cotney Attorneys & Consultants, our Miami construction lawyers are offering to assist construction companies with this process. For a fixed price, you can receive advice on credits, deferrals, and programs available under this new law, and if you decide to move forward with a loan through the PPP, we will prepare your initial application at no additional cost. Please review our COVID-19 Resources page for additional details.
If you would like to speak with a coronavirus construction lawyer, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.