Congress Approves Additional Time for PPP Loan Forgiveness

By Gary Thill.

Roofing professionals now have extra time and more flexibility to use PPP funds.

New guidance regarding the PPP (Paycheck Protection Program) loan forgiveness was announced by the federal government. The amount of time and flexibility to use these funds is being extended based on new legislation. This information is much-welcomed as roofing professionals continue moving forward with recovery from the economic shutdown caused by the coronavirus.

“NRCA commends the Senate for approving the Paycheck Protection Program Flexibility Act of 2020 (H.R. 7010), bipartisan legislation that would make significant changes to loans made to employers under the Paycheck Protection Program,” said Duane Musser, NRCA’s vice president of government relations. “NRCA is pleased to support this legislation to provide more flexibility to employers with PPP loans and has been advocating for its passage in recent weeks.”

Musser said the legislation will:

• Extend the current eight-week covered period to 24 weeks that businesses have to use the funds and restore laid off employees in order to qualify for loan forgiveness.

• Extend the PPP program deadline through December 31 (currently under the CARES Act, the program runs through June 30).

• Change the 75% payroll costs/25% non-payroll costs rule regarding how loan proceeds must be used to qualify for forgiveness to 60%/40%.

• Extend the term of the loan repayment on funds not forgiven from 2 years to 5 years.

• Ensure full access to payroll tax deferment for businesses taking PPP loans (currently under the CARES Act, an employer can’t defer payroll taxes if receiving any forgiveness on PPP loan).

The new terms apply to at least 40% of roofers who took PPP funds, according to an April NRCA survey. Overall, construction took $44.9 billion or over 13% of total PPP funds. 

With the original eight-week spending period starting to expire last Friday for the first loan recipients, those extra weeks are crucial to roofers, Musser said. That’s because while most never fully shut down — even in restricted states such as Pennsylvania where essential work on buildings such as hospitals continued — the recovery is taking longer than expected. 

“More time is the bigger issue for roofers,” Musser said. “When CARES originally passed on March 27, it was thought that in two months we were going to be back up and going full speed. Well, we’re not. Things are still very uncertain.” 

Other industry leaders also praised the new legislation. “This new law improves upon the original Paycheck Protection Program...Its enactment will save many construction jobs and allow thousands of construction firms to remain in business,” said AGC CEO Stephen E. Sandherr.  Even with the new guidance, Musser said it’s essential for roofers to document all their spending around PPP funds. He encouraged roofers to consult with attorneys or accountants to ensure proper documentation is being done. “You have to prove to the bank that you followed the rules,” he said. “If you can’t document that, you might not get your loan forgiven.” 

About $130 billion remains from the second round of $320 billion that Congress approved for PPP.

Rather than providing additional recovery funding, Sandherr urged Congress to help the industry in other ways. “Having fixed several problems with a measure designed to help firms survive, it is time for Congress and the President to put measures in place to rebuild our economy,” he said. “These measures include providing liability protection for contractors and other businesses that are taking steps to protect workers from the coronavirus, new infrastructure funding and measures to stimulate broader, private-sector demand for construction and development.”

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Original article source: International Roofing Expo

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The International Roofing Expo is the must-attend event for commercial and residential roofing professionals to stay abreast of market directions, trends and cutting-edge technology. The official show sponsor is NRCA; the official show publication is Roofing Contractor; and the digital destination and official residential publication is Replacement Contractor. Formerly owned by NRCA, the show was sold to Hanley Wood Exhibitions in May 2004. Hanley Wood Exhibitions was acquired by Informa Exhibitions U.S. in December 2014.