Keiter Transaction Advisory & Tax Partner, Scott Zickefoose, shared insights on the impact of the PPP loans in the article, “$284 billion round of Paycheck Protection Program loans becoming available for businesses affected by the pandemic”, featured in Richmond Times-Dispatch.
The pace at which the funds for loans will be exhausted this time around is uncertain.
Some financial experts think the loan program will not be exhausted as quickly this time, in part because many businesses have been able to re-open since last summer.
“It is kind of hard to anticipate the demand with the qualifier of a 25% decline in revenue,” said Scott Zickefoose, a senior director for Henrico County-based accounting firm Keiter. “Fortunately, a lot of people I am speaking with did not qualify for that,” because their business results did improve over the course of last year as businesses were able to re-open.
“My expectation is that it should not move as quickly as the first round,” Zickefoose said.
The types of organizations that can qualify for loans also has been expanded in the latest round. For instance, housing cooperatives and certain media businesses are eligible this time, Zickefoose said.
Also included this time are 501(c)(6) organizations, which would include groups such as chambers of commerce. They can get loans as long as they are not engaged in lobbying, and so can “destination marketing organizations,” which would include tourism groups.
Business advisers, banks and other financial firms also are awaiting more guidelines from the federal government on what is expected to be a simplified process for businesses to apply for loan forgiveness if they borrowed less than $150,000, said Doug Jones, a managing director and fractional chief financial officer for clients of Fahrenheit Advisors, a Richmond-based consulting firm.
Additional PPP and CAA Informational Resources
- Congress Passes Second COVID-19 Relief Package
- Keiter Webinar-PPP Funding 2.0: What Small Businesses Need to Know
- Overview of CAA 2021 Tax Provisions for Businesses
The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.