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Time is of the essence, which is why we are asking that you act expeditiously to address additional funding needs, the shortfalls of the CARES Act, and to take action on new measures that will assist in our recovery efforts. The immediate closure of large parts of our economy by this pandemic has resulted in unprecedented hardships.
With the second most cases of COVID-19 in the country, more than 1 million New Jerseyans have filed for unemployment insurance benefits since
The Paycheck Protection Program is a good first step in helping job-creators and the workers they employ. However, PPP rules that restrict how the loans can be spent have set an unrealistic eight-week timeframe for doing so and need to be changed immediately.
Many employees will not be able to come back to work within the eight-week timeframe required by the law and businesses that took PPP loans will lose the ability to apply for loan forgiveness. The PPP program needs to recognize the reality on the ground. To the extent that the original intent of the PPP was to keep these employees on the payroll and off unemployment, it has largely failed for those businesses that were forced to close. The 75% payroll requirement and eight-week expenditure from the receipt of money needs to be changed in light of current circumstances. The PPP should be refocused on the needs of small businesses that cannot reopen until governments allow.
Certain program changes are essential to help small businesses. We request the following:
* Greater flexibility in the permitted use of the funding by modifying the requirement that 75% of the monies be spent on payroll costs in order to receive loan forgiveness and clarification that failure to meet the payroll cost levels should result in prorated reductions of forgivable amounts not a complete denial. By design, every loan will fail the 75% payroll cost spend rule due to a mismatch of the costs that went into the loan amount calculation vs the loan forgiveness calculation. Example:
* An expanded timeframe to begin the loan forgiveness period beyond eight weeks, and allowing the forgiveness period to begin at a later date chosen by the small business;
* Additional startup funding to allow businesses to resume operations when the economy is reopened;
* Relax the requirement that an employer must maintain 100% of prior FTE level in order to receive full loan forgiveness;
* Extension of the
* Distribution of funding directly to the business community, in addition to the banking community;
* Re-evaluation of the affiliation rules so that additional businesses which have multiple locations can qualify for the program;
* Additional guidance on what makes up payroll costs included in forgiveness (75%/25% forgiveness and prorated amounts need more clarity);
* With the additional guidance issued, employers may find the loan they received is too large, as the original calculations issued were not as specific as they are now, specifically for the payroll for employees earning over
* Additional guidance is needed regarding how to determine what portion of allowable expenses are includable for purposes of the forgiveness calculations with respect to the “incurred and paid” language as it relates to the covered period; and
* Expanded eligibility to more organizations, such as the 501(c)6 nonprofits.
While we recognize that the PPP was recently reauthorized with
Thank you for your consideration of our comments and continued support of
Chief Government Affairs Officer
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The rule can be viewed at: https://www.regulations.gov/document?D=SBA-2020-0015-0001
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