Both the House of Representatives and the Senate have passed the PPP Extension Act of 2021, and the President signed the act into law, extending the deadline to file an application for a PPP loan from March 31 to May 31, 2021.

We previously noted that PPP loans are now explicitly available to housing cooperatives. The loan amount which may be applied for is 2.5 times the average monthly allowable payroll costs for 2019, 2020 or for the 12 months prior to the date of the application. A minimal certification of hardship is required, which states “current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant.”

PPP loan proceeds can be used to fund payroll costs, health and retirement benefits, mortgage interest, utility costs, and certain costs of operations. Usually, the entire amount borrowed can be forgiven, provided payroll levels are maintained for a designated period of time after the loan proceeds are received.

Cooperatives should consider applying for such loans if their proprietary lease maintenance payments have slowed due to financial stress that residents are suffering, or if operating costs have increased due to the need to assure social distancing or to satisfy other government directives, or if commercial tenants have stopped paying rent.

Other businesses that qualify should also apply for a PPP loan. If a business has already obtained a first draw PPP loan, has spent those loan proceeds, and has the need for a second draw PPP loan, it should determine whether it qualifies for this second loan and submit its application before May 31, 2021.

We are here to help you determine if you can apply for a PPP loan and with your other legal issues.