Government measures in key jurisdictions 4th edition - Flipbook - Page 155
United States ofAmerica
Contributor: Nixon Peabody
Loans and
financial
support
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The U.S. federal government has embarked on several initiatives to support businesses.
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The Paycheck Protection Program (PPP) incentivized employers to continue to
employ workers and pay employee benefits.
PPP was administered by the Small Business Administration (SBA) and offers employers
unsecured loans at a nominal interest rate, with a streamlined closing process. The program is
available to companies with less than 500 full-time equivalent employees. The deadline for new
applications was August 8, 2020; however, the program still has over $130 billion in funds not
expended. There is conjecture that the remaining funds will be part of a new program – perhaps
targeting restaurants or retail stores, which have both been very hard hit by the lockdowns.
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Companies that accept PPP funds can’t take advantage of some of the tax benefits rolled out by
the U.S. government (see below). While struggling businesses have grappled with the complex
qualification and application rules of the PPP, those businesses have considered the Employee
Retention Credit (ERC). In many instances, the ERC was a better choice. For more details, please
refer to our client alerts here & here.
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The Main Street Lending Program (MSLP), facilitates low interest lending to small and
medium-size businesses. On Monday, June 8, 2020, the Federal Reserve announced it would be
expanding the Main Street Lending Program (the Program) to permit smaller and larger loan
facilities, extend repayment terms, and make other changes to expand the number of small and
medium-sized businesses that would be eligible to receive financial support under the
Program. For more details, please refer to our client alert here.
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The SBA is once again (as of June 15 2020) accepting applications for its Economic Injury Disaster
Loan (EIDL) Program. This program is geared at small businesses and has a maximum loan value of
$2 million and has no forgiveness aspect. For more details, please refer to our client alert here.
Has the
government put in
place any new
bank funding
schemes?
Employment
What financial
support is
the government
providing to
businesses and to
individuals on
employment
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•
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155
David Kaufman | dkaufman@nixonpeabody.com | +1 415 244 2224
David Brown | drbrown@nixonpeabody.com | +1 312 977 4426
The U.S. federal government created the Federal Pandemic Unemployment Compensation
program, which provides an additional $600 weekly in special unemployment compensation for
individuals receiving as little as $1 in standard unemployment benefits. The law also extends the
maximum duration of benefits by 13 weeks, which means that in most states, employees who have
lost their jobs, or been placed on furlough, will be able to collect for up to 39 weeks. The new rules
also include compensation for individuals who are not traditionally eligible for
unemployment benefits, including independent contractors. These benefits expired at the end of
July 2020.
President Trump on August 8, 2020, signed an executive order moving disaster relief funds from
other programs to support a program that provided an additional $300 a week to unemployed
workers. Congress may also still act to increase this amount.
The Families First Coronavirus Response Act created mandatory employer-paid leave related to
Covid-19.
For more details, please refer to our client alerthere.
Government measures in key jurisdictions