Federal aid for businesses struggling due to the COVID-19 pandemic will be available beginning April 3, 2020. Importantly, if you need help applying for this aid from an attorney, accountant, or other professional, you should know that you do not need to pay this help. Here’s why:
The US Treasury has announced that small businesses can apply for the Paycheck Protection Program (“PPP”) staring this Friday. This program will provide forgivable loans to small businesses to help cover expenses and prevent employee layoffs, and will be available through Small Business Administration (“SBA”) lenders. If a PPP borrower uses the loan proceeds for payroll costs and certain other approved purposes during an eight-week period after the loan is disbursed, the loan will be forgiven. Essentially, if the program’s forgiveness requirements are satisfied, the loan will become a grant.
Importantly, businesses that receive help preparing applications for this program from attorneys, accountants, or other professionals will not need to pay for this assistance. This is because the PPP was created under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act that became effective March 27th. The CARES Act includes limitations on the fees that agents – those who prepare an application on the borrower’s behalf – may receive for their assistance, and those fees do not come from the borrower. Guidance on the PPP released by the US Treasury confirms that agents will be compensated for their services through the fees that SBA lenders receive, not from applicants – and states that agents may not collect any fees from the applicant.
Therefore, businesses and organizations that need help from a professional to apply for this aid should not hesitate to ask. The PPP is a generous aid package for businesses that need help, and there are no costs involved in having a professional make sure your application is completed correctly.