This week, Senate Republicans have proposed the Health, Economic Assistance, Liability Protection and Schools Act (HEALS) in response to the federal governments handling of the COVID-19 crisis. The nearly one-trillion bill will be comprised of a number of components meant to assist small businesses with recovering from this pandemic.
In addition to potentially expanding unemployment assistance, aiding state & local governments, and assisting renters and homeowners facing eviction, expansion of the PPP Loan and new rules on forgiveness are also in discussion.
If passed, the HEALS Act could:
- Allow PPP loan proceeds to be used for operating expenditures such as software, human resources and accounting services; costs related to property damage that occurred in 2020 (not covered by insurance) and worker protection expenditures related to Personal Protective Equipment.
- PPP Loan borrowers can select to end their covered period once the funds have been exhausted, but no earlier than 8 weeks after date of fund distribution but before December 31, 2020.
- It would simplify the loan forgiveness process for businesses who received not more than $150,000. These loans would be forgiven in full if the recipient certifies they have made a good faith effort to comply with the PPP Loan requirements.
- PPP Second Draw Loans may be offered for those specific businesses that have less than 300 employees and demonstrate at least a 50% reduction in gross revenue in the first two quarters of 2020 as compared to the same time period in 2019.
- Would allow business owners to temporarily take a 100% tax deduction on business meals provided by a restaurant incurred before Jan 1, 2021.
The continued ongoing discussion will hopefully lead to the passage of this act in the next few weeks. Our goal is to always understand and interpret the legislation to provide the best and most up-to-date information to assist our small business clients. Additional business related COVID-19 knowledge can be found on our website.