What a Year: 2020 - Covid-19, Protests, PPP loans, the Economy, and More

What a Year: 2020 - Covid-19, Protests, PPP loans, the Economy, and More

June 09, 2020

The year 2020 has become a year that will have one of the largest impacts on our lives and lifestyle, with unprecedented events in history. Covid-19 has changed our lives forever and will continue to force us to make additional changes going forward. 


The graduation class of 2020 will never forget this year as they did not participate in the steps to maturity and the ritual of that celebration.  They missed Prom, Senior Trips, and Graduation commencement in person.  Many schools organized virtual celebrations and in my town of Sonoma, CA, the Graduation class drove through town, as a form of celebration.  Many people cancelled travel plans and others lost family members.  Our economy took a bad hit and hopefully people will be rehired or be retrained in other industries.


At the same time, we have Black Lives Matter, and our own soul searching about how we have contributed to the pain of minorities and underprivileged populations.  The need for police, government, and society reform will pave to the way to understanding how we can remedy the problems.  

Discrimination and hatred that exists in our world may force many to think about their contribution and solutions to the problems.  Listening still is one of the strongest behaviors that tells the other person we see their world through their eyes.  It requires focus, attention and real caring and love for the other person.


We have SBA PPP Loans, Economic Disaster Grants, and Economic Disaster Loans.  What does that mean to your business and what is happening to the legislation and rules to qualify for the forgiveness of these loans? 

The process is complicated for the PPP loan also known as Paycheck Protection Program which includes the Loan Forgiveness Application and PPP Schedule A. This is an 11-page application and you will need documents to support it. At this time there is legislation to make this less restrictive. Note: please don’t file too soon as you may miss this.  Also, the Consumer Bankers Association and the Bank Policy Institute, representing big banks, want Congress to issue blanket forgiveness of small loans. The request was sent to Sen. Marco Rubio, R-Fla., and other key lawmakers. Under the lobbying from the banks, those with under a $150,000 threshold, 26% of all PPP loan dollars would qualify for automatic forgiveness, according to the banking trade groups. But 85% of PPP loan recipients would benefit.

Since the banks will need to review the PPP Application for loan forgiveness, and because the interest they can make is only 1%, they may feel their time and resources would be better focused on getting the economy safely back up and running, not processing heavy paperwork. 

The Blanket loan forgiveness would help banks as they would not need to sit on the banks’ balance sheet. Banks will need to spend money to service these loans for only 1%. The loans less than $50,000 in the PPP Loan would cost banks about $500 million, based on analysis by the consulting firm AQN Strategies. This was cited in the letter sent to the lawmakers in the Senate.

In the PPP Loan existing rules, 75% of loan proceeds must be tied to payroll in order to qualify for forgiveness. The House-passed bill would reduce that threshold to 60%.

Senate Majority Leader Mitch McConnell has been checking with senators to see if the House bill can obtain unanimous support in the Senate, which could enable passage as soon as this week.

So, stay tuned to my blog as new information becomes available in the saga that is the year 2020!