On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act” or the “Act”). The Act is a $2.2 trillion swiss army knife of economic relief provisions meant to reduce the impact of the COVID-19 pandemic on various parts of the U.S. economy. Among these provisions is the $349 billion Paycheck Protection Program (the “PPP”), an expansion of the Small Business Administration Economic Injury Disaster Loan program (the “SBA”). The purpose of the PPP is to help small and middle market businesses pay their employees and otherwise keep the lights on during the economic slowdown. As entertainment productions grind to a halt worldwide as a result of COVID-19, the PPP may be a welcome boon for entertainment businesses trying to stay afloat during this challenging time.
Before addressing the rules, it should be emphasized that taxpayers should file their PPP loan applications ASAP. It is anticipated that the $349 billion allocation to the PPP will be quickly absorbed and accounted for by applications submitted by this Friday (April 3), which means that applications filed next week may be out of luck unless Congress elects to expand the size of the PPP fund. With that as our background, we continue with a general description of the PPP.