Uncertainty Over PPP Loan Forgiveness Is Disruptive to Everyone, Not Just Loan Recipients
Whether or not you own a small business, you are probably very relieved that 2020 is over, and you probably can’t wait to get started on your plans for 2021. In 2020, business owners and employees alike were in survival mode, making the best decisions to get them through the next few weeks, with the unspoken understanding that we would worry about the long-term consequences later. In all likelihood, by this time next year, millions of Americans will have been vaccinated against COVID-19 and in-person social gatherings will no longer seem like something that happened in the old days, but no one is sure how many millions, and no one is sure when. In that regard, the small businesses that have managed to survive this long are still in survival mode. Congress is finishing the details on the next pandemic relief bill, but business owners are still wondering what will become of the Paycheck Protection Program (PPP) loans they have already received, and according to Nicholas Anthony of Market Watch, this is a major source of uncertainty for our entire economy. A Washington DC small business lawyer may not be able to find simple answers to questions that have no simple answers, but they can help you make the best decisions to keep your business afloat in 2021.
What Small Business Owners Need: Straight Answers About PPP Loan Forgiveness
PPP loans have enabled many businesses to weather the most restrictive economic shutdowns of the COVID-19 pandemic, when large areas of the country were under stay-at-home orders. Small business owners have expressed wishes to have more funds become available to them, and it appears that this wish will come true. Many of them also wish to have their loans forgiven, and in fact, hundreds of thousands of companies have applied for loan forgiveness, but which loans will actually be forgiven remains to be seen.
According to Anthony, Congress did not work out a clear strategy for PPP loan forgiveness in the original provisions in the CARES Act because there simply was no time to work out all the details. In fact, by October, 96,000 businesses had applied for PPP loan forgiveness, but not a single one had received a response. Anthony describes the fact that PPP loans and Economic Injury Disaster Loans (EIDL) can count against each other as an unforeseen glitch that is making PPP loan forgiveness policy more complicated. Meanwhile, business owners are holding their breath, unable to make major decisions, because they cannot safely assume that their PPP loans will be forgiven, and they cannot safely assume that they will not. This means that all the other entities that do business with PPP loan recipients are also in limbo, which disrupts the entire economy. Meanwhile, the banks that lent money to businesses under the auspices of the PPP must treat the loans just like any other business loan, at least temporarily.
Let Us Help You Today
A Washington DC small business lawyer can help you cope with the uncertainty about PPP loan forgiveness and help you make plans for a scenario where the loans get forgiven and for one where they don’t. Contact Tobin, O’Connor & Ewing for help today.