Update: Trump Signs PPP Revision Bill Into Law
Updated June 5
President Donald Trump today signed the Payroll Protection Plan Flexibility Act of 2020 into law.
Updated June 4
The U.S. Senate passed the Payroll Protection Plan Flexibility Act of 2020 — a reform bill for the Small Business Administration Paycheck Protection Program that has been providing desperately needed funds to businesses affected by the COVID-19 pandemic — on June 3, meaning the bill is headed to the desk of President Donald Trump.
In its new modified form, the PPP program can be extended to 24 weeks or left at eight weeks, so that those receiving PPP loans can make sure they are spending the money as it is intended for full or nearly full forgiveness.
A key change in the new bill is a drop in the payroll expenditure requirement to 60% from the previous 75%, but the requirements for that expenditure is now less flexible for those seeking loan forgiveness. A source with knowledge of the matter told Pollstar there is an internal memo circulating among legislators that some aspects of the bill will still be modified, including providing more or less loan forgiveness depending on your payroll expenditure, rather than the all-or-nothing language in the current bill.
Other proposed changes in the bill include exceptions to provide forgiveness to businesses that were unable to find qualified employees to replace those lost or unable to restore business operations and a five-year window to repay the loan at a 1% interest rate instead of the previous two-year window.
A source with knowledge of the matter told Pollstar that an estimated $100 billion in PPP funds are still available and freelancers and independent contractors can apply for them as well as small businesses.
As the end of the covered period for the Paycheck Protection Program is approaching this month, a letter has begun circulating to extend the period live entertainment production professionals can be covered under the program.
PPP, an initiative of the Small Business Administration, has provided loans for businesses to keep their employees on payroll during the COVID-19 pandemic. Those loans will be forgiven if all employees were kept on payroll for eight weeks and money was used for rent, mortgage interest or utilities
The bill to reform the program and give business owners more flexibility has passed the House and is being put before the Senate. If it passes there it will be put before Donald Trump.
Jamie Cheek, of Flood, Bumstead McCready & McCarthy, Inc., recently said in a Pollstar Live! Digital Session that he encouraged all of his clients to apply for PPP loans to keep their touring crews on payroll for as long as possible, and it has helped, but only as a short term solution.
A source has informed Pollstar that PPP funds will start to run out for people around June 15 and there is a push to try to extend the period this aid can be available to production professionals, who may not be able to resume putting on events or receive income for the foreseeable future. The content of a letter live professionals are encouraged to send to their congresspeople and senators, who can be determined at https://www.usa.gov/elected-officials, is pasted below.
May 29, 2020
I am writing you concerning the survival of the Live Entertainment Production Industry. Please consider the following:
LIVE ENTERTAINMENT PRODUCTION INDUSTRY RELIEF PLAN
1.The Live Entertainment Production Industry is a 38 billion dollar a year industry with over 10 million people working in the industry.
2.The Live Entertainment Production Industry will have zero income until crowds of 10,000 or more are permitted. This is not anticipated before October 2020 at the earliest.
To survive, the Live Entertainment Production Industry must have the following Relief Plan from the Federal Government
1. Three (3) additional 8-week PPP tranches provided to all firms that received the initial tranches. These three (3) tranches will be provided up until the date that crowds of over 10,000 are allowed to gather nationwide and liability protection is in place.
2. Full liability protection from all COVID 19 legal actions.
The 3 additional tranches of PPP will not require any additional vetting, but simply the execution of new notes under the same conditions as the original notes. These 3 new tranches are needed for all the Live Entertainment Production Industry firms to survive while at zero income.
Absent this relief, the entire industry will cease to exist. The industry stands alone and away from the artists and promoters, who often can survive at zero income.
Time is of the essence of the original funding begins to expire June 15, 2020.