APA Advisory - President Signs COVID/Omnibus Package

December 29, 2020

TO:             , 

SUBJECT: Package Includes Additional PPP and Enhanced Unemployment to Help the Hardest Hit Businesses

As mentioned in APA’s December 23rd Advisory the House and Senate approved a COVID/Omnibus legislative package on December 21. On December 27, President Trump agreed to sign the COVID Relief bill although he directed Congress to revisit and increase the stimulus checks to be issued to individuals and families. The House approved increasing stimulus checks to $2,000, per eligible recipient, however, as of this morning, the Senate as not yet voted on that measure.

As previously noted, the APA has diligently advocated for a second round of the Paycheck Protection Program (PPP) and for enhanced unemployment insurance. We are pleased that the COVID relief package includes these two key components.

With regard to the PPP program, several substantive changes were made.  We are grateful to the K&L Gates PPP team for providing the following highlights: 

•           The program is reinstituted until March 31, 2021 for new loans and second loans;

•           The computation for wages is based on 2.5 months (3.5 months for restaurants);

•           Set asides for CDFIs, small businesses;

•           Streamlined forgiveness procedures for loans under $150,000;

•           Expenses paid with forgiven PPP loan proceeds are deductible; and

•           Second loans, which are capped at $2M, are available to a subset of recipients, e.g., a fewer than 300 employee threshold rather than 500, must demonstrate at least a 25% decline in gross receipts compared to the same quarter last year.

The legislation also gives the Small Business Administration (SBA) considerable flexibility in administering the program. The SBA is required to issue guidance on the new rules within 10 days, a very heavy lift even without major holidays in between.  Given the way the SBA guidance unfolded during the first round of PPP (sometimes retroactive changes and unclear policy), the flexibility afforded to the SBA in the statute, and the tight timeline, appears like a certain recipe for less-than-fully-developed policy, gaps, and unclear procedures. However, we will continue to stay on top of this and share important information with the membership.

Attached is a summary of the 5500+page COVID relief package. The sections pertaining to unemployment, PPP, and loan forgiveness are highlighted.

While the APA is pleased that at least some relief package was obtained during the Lame Duck Congress, we will keep pushing for RESTART to obtain the long-term solution that our hardest hit industry members need. RESTART would come in the form of a 7-year, 1% interest loan, with no payments in year one, interest only in year two, and amortization of the loan in year 3 to 7. We believe that this is the only path for most companies and people in the fireworks entertainment and live events industry. Accordingly, that makes it more important than ever that we continue our efforts to gain RESTART in early 2021.

Thank you to all our APA members who have worked so hard to help push this COVID relief package out during the past several months.

Wishing all our members and their families a happy & healthy New Year!

Advisory #2020-52