What Goes Down…
…goes back up – the EIDL amount has been increased and it may be retroactive.
In this Report:
• EIDL goes back up
• Banks liquidity loosened
• Restaurant Revitalization Fund
• Covered Period Changes on PPP Forgiveness
• So Cal Economy
The SBA announced Wednesday that the EIDL is raising its ceiling from $150,000 to $500,000 effective immediately. The SBA has said they are going to do a look back to determine who could receive an increase and will be emailing those borrowers. Don’t call us, we’ll call you. Remember, this is a loan, NOT a grant. It has to be paid back.
Under the category of Things You Did Not Know About the Covid Era… early last year, the fed restricted the ability of banks to pay dividends or buy back stock in an effort to preserve liquidity. They will be lifting up that restriction on June 31. Evidently the Fed believes things are looking up, like interest rates. Just kidding, they don’t think rates are going to go up. But I think they will. I can’t wait to get a one year CD at 10% like we did in the 70’s.
Restaurant Revitalization Fund - RRF – For the restaurants that are left, this is huge. The SBA is coming out with a program to replace the revenue that restaurants lost due to the pandemic. I’m not sure how they are going to document that, but a restaurant will be able to get up to $5 million per location. Over the next seven to 10 days, the SBA will begin posting RRF information, such as guidance and required documentation, relevant to potential applicants. The program would then move to a pilot phase, in which the program would begin accepting applications based on prioritization established in the American Rescue Plan Act, which sets aside $5 billion for the smallest applicants ($500,000 or less in 2019 gross receipts) and requires that during the first 21 days of the grants, the SBA will prioritize applications from restaurants owned and operated or controlled by women, veterans, or socially and economically disadvantaged individuals. Click here for more information: SBA eyes early April to begin Restaurant Revitalization Fund rollout - Journal of Accountancy
Going once, going twice… gone! So goes the alternate covered period for PPP Forgiveness. I have had clients working on-and-off on their forgiveness, using the Alternate Covered Period and now the SBA has removed that option from its forgiveness forms. Instead, your covered period begins the day your received the PPP funds and can end on any date you select, up to 24 weeks later. So you can end the covered period on a date that coincides with the end of a payroll period.
Courtesy of Beacon Economics for the California economy…
• Over 141,000 non-farm jobs were added in February in California
• California unemployment rate dropped to 8.5% from 9.0% - Yes!
• The US unemployment rate is 6.2%. Oh.
• Click here for the full report.
Thursday is April Fools Day. Watch out for pranks!
