Construction Firms Struggle with PPP Loan Forgiveness
The year 2020 was a roller coaster for all of us, especially specific industries. Even though the construction industry still stayed afloat, some firms needed extra funds to help them through the tough times.
The government tried to step in and help struggling businesses by offering the Paycheck Protection Program loan. But now is the time to review and apply for the PPP loan forgiveness and some construction firms are being denied.
PPP Loan Forgiveness
The PPP racked up a total of $780 billion in loans given out, $12 million was to contractors.
Borrowers can apply for forgiveness, but it isn’t an easy task. Documentation is needed and businesses need to prove that they used the loan properly under the program’s guidelines.
- 60% of the funds from the loan needed to be used for payroll
- 40% of the funds from the loan needed to be used for rent, utilities, etc.
Businesses that spent all of the loan funds have 10 months to apply for forgiveness. Partial forgiveness is also an option.
Start by getting all of the paperwork needed to the lender. They have 60 days to review. Then, it will need to be approved by the Small Business Association, which could take them 90 days to decide.
If a business has been turned down, it can contest the decision and launch an appeal. A petition to do so must be done in 30 days.
If you are a construction firm and need advice on construction law or need a referral for a lawyer that can help with the PPP loan forgiveness, speak with a construction lawyer in Phoenix for proper guidance.
The Good News
There is still some good news surrounding the construction industry. The industry continues to boom, especially for those states in the southwest such as Arizona and Nevada.
The only thing stopping the construction industry is the lack of supplies. Many projects are taking much longer to finish, backing up projects. This is because contractors are having a hard time getting the supplies they need to finish projects.
Things should start to change though, speeding up construction projects in the near future. This is promising for those in the construction industry. With so much work, but lack of supplies has forced these contractors to pick and choose which projects to take on. But now that supplies are coming back around and more people are looking for work, helping the construction industry with the labor shortage. It looks to be a good end of the year for the industry.