A couple of days ago, President Trump signed into law a second stimulus package for COVID relief. This legislation includes $600 stimulus checks, more funding for the Paycheck Protection Program, along with some updates to the rules, changes to the regulations related to loan forgiveness, tax deferrals, healthcare, and more. Throughout the episode, Grant dives into what these new updates are, how they relate to individuals, business owners, employees, and how you can take advantage of the provisions in the new stimulus package.Continue reading
Another week, another round of updates to the Paycheck Protection Program. This week’s revision comes in the form of an entirely new (albeit brief) piece of legislation called the Paycheck Protection Program Flexibility Act of 2020.
The Act is mostly good news for business owners. This post covers what you need to know about the changes, and what the current opportunities are.
A lot has happened in the past week. And now that we’ve had an opportunity to read through more details of the Paycheck Protection Provision, it’s become clear that the program’s rollout will be messy. In fact, it already is.
Last week I wrote a post outlining a few of the provisions in the CARES Act meant to provide economic relief to small businesses. What we’ve come to realize in the last few days is that the Treasury Department has a great deal of latitude in how these programs will actually be offered.
For example, the permits the Treasury Department to issue up to $349 billion of loans to small businesses through the Paycheck Protection Program. Businesses with fewer than 500 employees can apply through an SBA approved lender for loans up to either 2.5x their average monthly payroll over the previous year, or $10 million (whichever is less). The bill stipulates that the pay back period for the loans may be stretched out to up to 10 years, with an interest rate no higher than 4%.
Then, early last week, the Treasury Department stepped in and communicated that all loans will have a two year amortization period and 0.5% interest rate. And on Thursday, Secretary Mnuchin announced another interest rate revision to 1%.