New guidance from the Trump administration clarifies that US construction firms with 500 or fewer employees and that meet small business size standards qualify for new Paycheck Protection Program loans that are part of the recently implemented CARES Act for coronavirus relief.
PPP loans are intended to help companies avoid layoffs. The US government will forgive the loans if the employer maintains head count and salary levels.
The Associated General Contractors of America (AGC) reported it raised concerns over the original guidance which appeared to exclude many firms from the program.
“Administration officials have done the right thing and revised their guidance to allow, as Congress intended, for firms that employ 500 or fewer people to qualify for the Paycheck Protection Program loans,” said Stephen E. Sandherr, AGC chief executive officer. “This change means the program is now more likely to help smaller firms continue to operate and retain staff.”
On April 2, the Small Business Administration issued an “interim final rule” to the effect that a business must have 500 or fewer employees and fall below the agency’s small business size standards—which for construction businesses are generally determined by an average annual income threshold, not number of employees threshold—in order to qualify for the new loan program. Congress, however, declared that the program shall be open to all businesses that have 500 or fewer employees or fall below those size standards.
“The U.S. Department of Treasury released new guidance that appears to clear the way for construction firms that employ 500 or fewer people to qualify for the new Paycheck Protection Program loans,” a statement from the AGC says. “The association will work with administration officials to ensure that the Small Business Administration’s regulations and guidance are harmonised with this new Treasury guidance.”