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Articles Tagged with New Jersey Small Business Attorneys

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Following a $2 trillion plus stimulus bill passed in the Spring of 2020, the Congress has finally been able to come to terms on another economic stimulus and relief bill, and the president has finally signed it into law.  The bill is over nearly 5,600 pages long and has a whole host of miscellaneous provisions included therein.

However, for small businesses several issues were of particular concern.  First, there have been a host of issues, questions, and need for clarification on the small-business-300x215previously created Paycheck Protection Program (“PPP”).  Back in the Spring of 2020, that program was created to provide money to small businesses to help them pay their payroll while suffering from financial issues caused by the Covid-19 pandemic and widespread shut-downs and stay-at-home orders. The new stimulus bill clarifies that expenses paid with these funds may still be used in tax deductions and the amount of the PPP loan would not be considered in calculating the company’s gross income.

PPP funds were generally supposed to be used for (and would only be forgiven for) use in covering payroll, mortgage interest, rent, and utility payments.  The new bill should be expanding forgivable expenses to operational expenditures for software or computing services for business operations, property damage due to public disturbances that were not covered by insurance or other compensation, payments to suppliers where the supplies were essential to the operations, made pursuant to a contract prior to the covered period, or for perishable goods, or worker-protection costs required to comply with requirements of state or local governments, the CDC, OSHA, or the Department of Health and Human Services.

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As a result of the Novel Coronavirus (“COVID-19”), the federal government has passed significant legislation in an attempt to provide relief to businesses small-business-300x215struggling with economic hardships as a result of widespread closures and stay-at-home orders.  One major part of these governmental actions includes the passage of the Coronavirus Aid, Relief, and Economic Security Act (also known as the “CARES Act”) on April 2, 2020.

The CARES Act provides for approximately $2 trillion in aid through expanded unemployment assistance, individual relief checks, tax credits, loans, and grants to businesses which were closed or significantly effected by COVID-19, and funding to hospitals and health care facilities. Of this, approximately $350 billion was allocated to the CARES Act’s Paycheck Protection Program (“PPP).   When that money was almost immediately sought by the millions of businesses seeking assistance, an additional $175 billion was additionally allocated.

The PPP limited its funding to each company to two and a half times the company’s average monthly payroll costs.  While the PPP is considered a loan program, the funds may largely (or entirely) be forgiven as long as the company uses the funds for approved expenses. The details of exactly which expenses would be considered approved and how these funds could be used has been the subject of much uncertainty over the past several weeks.  Indeed, the SBA (Small Business Administration) has posted additional rules and guidance on the matter more than 10 times in two months.

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