The Paycheck Protection Program (PPP) at the U.S. Small Business Administration can be used for payroll support, insurance premiums, and mortgage, rent and utility payments. While the initial $349 billion from the CARES Act was utilized within the first two weeks of the program, President Trump signed legislation on April 24, 2020 providing an additional $310 billion for this program. Community health centers eligible through the employee-based (500 employees or less) or revenue-based size standards (max net worth of $15M and average net income of $5M) can submit an application through SBA lenders. Additional information can be found on the PPP FAQs. CPCA also created a webcast alongside Melissa Schoen and MaryKate Scott to share how community health centers can calculate the Paycheck Protection Program loan, use the loan fund, qualify for loan forgiveness, and submit an application. BKD also released a set of FAQs based on the SBA’s second round of Paycheck Protection Program clarifications.
UPDATE: The U.S. Internal Revenue Service (IRS) released on April 30, 2020 Notice 2020-32, which “clarifies that no deduction is allowed under the Internal Revenue Code (Code) for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a covered loan pursuant to section 1106(b) of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).” It is our understanding that this means no deductions will be allowed for expenses that were forgiven under the PPP loan.
UPDATE: The Paycheck Protection Program Flexibility Act was
enacted on June 5, 2020 and made changes to the PPP. In particular, it increase
the amount of time borrowers have to spend loan funds (24 weeks vs. 8 weeks);
decreased the portion of funds that need to be spent on payroll (60% vs. 75%);
extended the deadline for returning to pre-pandemic staffing and payroll levels
(December 31st instead of June 30th); etc.
UPDATE: On Tuesday, March 30, 2021, President Joe Biden signed the PPP Extension Act of 2021 into law, extending the Paycheck Protection Program an additional two months to May 31, 2021, and then providing an additional 30-day period for the SBA to process applications that are still pending. Learn more here.