Treasury Department Confirms Paycheck Protection Program Applies to Small Construction Firms
Good news for builders: Any small construction company can apply for the Paycheck Protection Program regardless of revenue, according to new guidance from the Treasury Department. Before, many builders were concerned that they would not be able to seek a coronavirus relief loan even though they had fewer than 500 employees because their companies made more money than the usual definition of a small business. This clarification is huge for builders looking to pay their employees while work slows down or is halted due to a local government’s shelter-in-place orders. The loan program allows small businesses to take out a forgivable loan of up to $10 million to keep employees on the payroll and pay rent, utilities, and mortgage interest.
New guidance from the Treasury Department appears to allow any U.S. firms with 500 or fewer employees to qualify for the Small Business Administration's Paycheck Protection Program regardless of revenue, according to the Associated General Contractors of America. The initiative was created as part of the $2 trillion coronavirus rescue bill enacted late last month.
President Donald Trump's administration released the new guidance yesterday after the AGC raised concerns that many small construction firms appeared to be excluded from the program. While Congress had earlier declared that the program be open to all businesses with 500 or fewer employees, the administration's “interim final rule” issued on April 2 stated that businesses must have 500 or fewer employees and fall below the agency’s small business size standards in order to qualify. The AGC claims the rule would have excluded many construction firms that have fewer than 500 employees but earn more than the SBA rules allow.