On Tuesday the U.S. Senate approved legislation that will provide an additional $310 billion in funding for the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security Act. CNN reports that the U.S. House of Representatives could vote on the bill as early as Thursday.
The government originally set aside $349 billion for the PPP but those funds were quickly depleted by businesses in need of relief. According to the Small Business Administration (SBA), which administers loans through the program, any loan received through the PPP will be forgiven fully if the funds are used for payroll costs, interest on mortgages, rent and utilities. Due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll.
Associated General Contractors of America CEO Stephen E. Sandherr reacted to the Senate’s approval, saying that the new funding will help thousands of construction firms to retain essential construction jobs amid rapidly declining demand for construction services.
“As one of the relatively few sectors of the economy still operating, construction firms still have significant payrolls in need of protection. But with more than 50% of construction firms reporting project cancellations or delays, construction employers are struggling to retain workers. This new proposed legislation will help protect thousands of construction jobs, providing relief for our already hurting economy,” he says. “We urge Congress to quickly pass this legislation so the president can sign it into law and reopen the loan program. At the same time, Congress and the Trump administration must begin work—now—on measures designed to rebuild our economy. These measures must include new infrastructure funding, relief for multi-employer retirement plans and compensation for cancelled or delayed federal construction projects. Preserving jobs now is important; but making sure there is a need for those workers after the pandemic is essential.”
At least one glass and glazing company received PPP funding after the first round of applications. Chuck Mowrey, CEO of JPI Glass, says the application process was “very easy.” The company applied as early as possible on April 3, the day applications opened, and it received an SBA number on April 8. JPI Glass received the necessary loan documents on April 13 and received its PPP funding on April 17, ten business days from the original application.
“We were ready to go from the jump as we were afraid of funds running out. If small businesses make up a third of the economy and if payroll as a percentage of revenue, on average, is similar to ours, then the total loan amounts, by my estimate, could be over $1 trillion. So we were not surprised that $350 billion went quick,” says Mowrey.
He adds that JPI Glass’ entire payroll (including the office, shop and field), rent and utilities will be covered for eight weeks “by a forgivable loan or, in a sense, free money.”
JPI Glass is still operating as construction is considered essential in Missouri, but work has been far from normal. The company is now working four, ten-hour days in both the shop and field to guarantee 72 hours for some shop and field surfaces to become virus free.