Paycheck Protection Program (PPP)

This week has seen many rapid changes, and unfortunately much uncertainty remains about how certain relief programs will work. However, due to the rapid pace at which Paycheck Protection Program (PPP) loan applications are being submitted to the U.S. Small Business Administration (SBA), we wanted to send out an update specifically about that program. As you’ll recall from our earlier correspondence, the PPP is a loan program that is designed to provide an incentive for small businesses to keep their workers on the payroll. On Thursday, April 2, 2020 the SBA issued an interim final rule for the PPP detailing certain implementation guidelines and requirements.

•The SBA could potentially forgive the loan if all employees are kept on the payroll for 8 weeks and the funds are used for payroll (including certain benefits), mortgage interest, rent, or utilities. At least 75% of the forgiven amount must have been used for payroll-related costs. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining compensation levels.
•Payroll costs are capped at $100,000 annually for each employee.
•Independent contractors do not qualify as employees.
•The interest rate for these loans will be 1%. (This is a change from the .5% rate that was previously reported.)
•The loan will have a maturity of 2 years.
•Loan payments will be deferred for 6 months. Interest will continue to accrue during the deferment.
•No collateral or personal guarantees are required.
•Neither the government nor lenders will charge small business applicants any loan fees.

Consult your local lender to find out whether they are participating in this program. Certain banks that previously announced their participation in this program have temporarily stopped accepting applications, so it is important that you determine your specific bank’s current status.

A copy of the loan application and additional instructions for potential borrowers are attached.

PPP Application-(v2)

PPP Fact-Sheet

If you are interested in applying for the PPP loan for your business, please do not delay.

Information for this email was obtained from While we are providing this information to assist you with your application, Manley Garvin is not allowed to, and therefore does not, attest to anything related to the potential application, your company’s creditworthiness, potential loan qualification, or potential loan forgiveness.

CARES Act and other Small Business Opportunities

During this time of rapidly changing legislation, we have intentionally avoided disseminating information until key pieces were finalized. With the passage of the CARES Act on Friday, March 27th, we can begin to provide reliable information about that Act and other developments that may affect your business during this time. Please note that many of the regulations below contain clauses that can prevent one business from taking advantage of multiple relief provisions, which is why we want to provide basic information about the various developments in one place. As you are aware, these laws are changing rapidly, so we appreciate your patience as we take the time necessary to interpret these new laws in order to best serve you.

Coronavirus Aid, Relief, and Economic Security (CARES) Act

-The Small Business Administration (SBA) can assist with capital to cover the cost of retaining employees through the Paycheck Protection Program (PPP) and/or with a small infusion of cash to cover certain costs through an Emergency Injury Disaster Loan (EIDL).

• PPP Loans would provide assistance through loans that could qualify to be partially forgiven if employers maintain their payroll. This is expected to be a very popular program, and it is our understanding that the funds will be disbursed on a first-come, first-served basis. We would encourage you to begin preparing now if you are interested in taking advantage of this program.

• EIDL funds may be used to keep employees on payroll, to pay for sick leave, or to pay other business obligations including debts, rents, and mortgage payments.

-A refundable payroll tax credit is available for 50% of wages up to $10,000 paid by eligible employers to certain employees during the COVID-19 crisis. The credit is available to employers, including non-profits, whose operations have been fully or partially suspended as a result of a government order limiting commerce, travel, or group meetings. The credit is also provided to employers who have experienced a greater than 50% reduction in quarterly receipts, measured on a year-over-year basis.

-The CARES Act allows certain taxpayers to defer paying the employer portion of certain payroll taxes through the end of 2020, with all 2020 deferred amounts due in two equal installments, one at the end of 2021, the other at the end of 2022.

-Taxable income limitations have been relaxed to allow a net operating loss (NOL) to fully offset income, and NOLs arising in a tax year beginning after December 31, 2019 and before January 1, 2021 can be carried back to each of the five tax years preceding the year of such loss.

Expanded Unemployment Benefits

South Carolina law allows for the removal of charges from contributory employers when unemployment benefits are paid as a result of a national disaster, including the COVID-19 pandemic.

Families First Coronavirus Response (FFCR) Act

• Certain small and midsize employers can begin taking advantage of new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. This leave may be for the employee’s own health needs, to care for family members, or to take care of children under 18 whose school is closed or childcare is unavailable. The beginning date for employer and self-employed tax credits is April 1, 2020.

Additional Resources
The above is only a brief summary of the major provisions of the relief packages recently passed. Please do not hesitate to reach out if you would like more detailed information.

– A PDF is attached from the U.S. Senate Committee on Small Business & Entrepreneurship SBA Programs – CARES

As additional information becomes available regarding the application process for SBA loans, your banker can assist with the application process.

Over the next few days, we will continue to provide detailed information about the law in its final form. Please see our website and/or Facebook page for updates.

Even during these challenging times, we look forward to continuing to provide you and your business the client service you have come to expect and deserve from Manley Garvin. At this time, our lobby does remain closed to the public, but our associates are continuing to work remotely to serve you. We thank you for your patience and wish you all good health and safety during these unsettled times. Please do not hesitate to contact us if you have any questions or concerns.