New Paycheck Protection Program will have more restrictions than the first
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A big part of Congress’s latest relief package is a new Paycheck Protection Program to help small businesses through the pandemic. Until now, details of how exactly the program will work have been scarce.
This week, the Small Business Administration is unveiling some new guidance on how it’ll determine business owners’ eligibility.
The new Paycheck Protection Program has more restrictions than the first one. It’ll only be available to companies with fewer than 300 employees. The limit last time was 500.
Phil McCollum, a tax partner with the accounting firm Henry+Horne, said many of his clients’ head counts have shifted over the past year, which raises questions.
“Do you have to look at what the number of employees were last December? The fourth quarter of 2019? Or can you just look at what’s happening this quarter,” he said.
Applicants will also have to prove their businesses had a 25% revenue drop between the fourth quarter of 2020 and the fourth quarter of 2019.
But many of the smallest businesses only keep yearly records, said Diane Sumpter, who runs the South Carolina Minority Business Enterprise Center, which is funded by the Commerce Department’s Minority Business Development Agency.
“When I think of barbershops, when I think of hairdressers, I think of salons. They will never have those quarterly things because they don’t keep up with it in that same vein,” she said.
Sumpter said she’s telling businesses to start preparing.
“I’m trying to get something right as we speak out saying get ready, get ready, get ready. At least have your documents that was required the first time,” she said.
But once guidance on how the rules should be implemented is released, Peter Alden, CEO of the Bay State Savings Bank in Massachusetts, said there’s a chance some customers won’t qualify.
“The last thing you want to do is have a customer assume that they’re eligible, give you all the information, then you got to say, ‘Guess what? You’re not,'” he said.
On the plus side, Alden said the bank’s gone through this already. So this time, the process should be more efficient.
COVID-19 Economy FAQs
Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?
This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.
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India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy continues reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
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