Paycheck Protection Program
Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020, the Paycheck Protection Program (PPP) was established with the intention of providing federal financial relief to businesses facing economic hardship due to COVID-19. Administered by the Small Business Administration (SBA), the size of a PPP forgiveable loan is determined by a business' payroll costs multiplied by two and a half or a maximum of $10 million, whichever is lesser. The loan may be fully forgiveable if businesses use no less than 75% of the loan to maintain payroll costs and no more than 25% on routine financial obligations like mortgage, rent, and utility payments.
As an Owner or Operator, How Does this Affect My Business?
Per SBA guidance and the CARES Act, multifamily businesses and their workforces are largely excluded from the relief provided by the PPP, despite Congressional intent to serve all businesses facing economic hardship. Not only are multifamily employers precluded from the PPP, the industry is also excluded from alternative sources of federal support, like the Economic Injury Distaster Loan (EIDL) and the Main Street Lending Program (MSLP), per recent guidance. With limited options to obtain capital, employers are forced to make the difficult choice of missing routine financial obligations or laying off valuable members of their workforces as renters become increasingly hard-pressed to meet their rental payment expectations.