By Stacy Cowley, Emily Flitter and David Enrich | New York Times
When a $192,000 loan from the federal government’s small-business aid program arrived in his bank account last month, George Evageliou, the founder of a custom woodworking company, felt like one of the lucky ones.
Under the program’s rules, Mr. Evageliou has eight weeks from the day he received the cash to spend it. But nearly three weeks after the clock started on April 14, he hasn’t used a penny.
His quandary? If Mr. Evageliou wants his loan to be forgiven, he must spend three-quarters of it paying the 16 workers he laid off from Urban Homecraft, his Brooklyn business, in late March. But bringing his workers back now, when they can’t work in their fabrication shop or install woodwork in clients’ homes, won’t help his business. And if New York City remains shut when his eight weeks are up in mid-June, Mr. Evageliou would have to lay off his employees again — something he wants to spare them.
“The parameters of “how to spend” the PPP loans are unclear, making it absolutely chaotic for the handful of businesses that have been lucky enough to receive some funding to understand how to deploy it. For instance, if you’re a small business that received the PPP loan after your monthly payroll, do you wait for the next payroll period or do you disburse the funds sooner so you are within the 8 week forgiveness period? Similarly, can you use the funds to hire new employees or must you hire employees you let go? With the rules on the “use of funds” evolving daily, it’s no wonder small businesses are worried they will run afoul of the rules and then be stuck with a loan obligation.” ~Shruti Gurudanti, Attorney at Rose Law Group