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New Legislation Improves PPP Rules for Event Businesses

Since its initial passage, one thing that has been clear about the Paycheck Protection Program is although it provided much needed financial support, the provisions of the program didn’t work for all businesses, especially in the events industry. Event businesses have found its requirements problematic, particularly the spending ratios and the timeframe for using loan funds at a time when businesses are forcibly closed, and gatherings are restricted.

In response to a growing chorus of concerns about the PPP, Congress passed additional legislation (H.R. 1710) to address the shortfalls. Last Friday, President Trump signed that new legislation, the Paycheck Protection Flexibility Act, into law. The PPFA includes key provisions that will make the PPP work better for events businesses, and others that are closed by regulatory authorities and restrictions. Some of the important changes benefitting events businesses include:

  • Businesses have 24 weeks to use the PPP funds instead of the 8 allowed in the original CARES act.
  • The payroll spend requirement has been lowered from 75% of the loan amount to 60%. This increases the amount available for rent and other operating expenses from 25% to 40%.
  • Loan forgiveness requirements have been loosened. A business may still qualify for loan forgiveness if it has made good-faith offers of employment that have been rejected; if it’s unable to find qualified employees; or unable to bring business operations back to February 15 levels.
  • Businesses now have until December 31, 2020, to apply for forgiveness – an additional six months.
  • The repayment window has been extended from 3 years to 5.

Businesses should contact their lender or financial advisor for a full review of the PPFA.

Where does Federal stimulus and business relief go from here? It’s hard to say right now. The House and Senate are in very different places on the size, scope, and priorities of any “Phase 4” stimulus legislation. While the House has passed a $3 trillion bill, Senate GOP leaders immediately declared it dead on arrival amid deep partisan divides. The Senate GOP, in turn, doesn’t expect to issue another stimulus bill until mid- to late-July. Real negotiation has not started.

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Lawrence Leonard

Lawrence Leonard, CAE, is the Executive Director of the National Association for Catering & Events. With nearly 25 years of experience, Lawrence has developed a deep understanding of the power of associations and the dynamic and complex events profession.

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