On Sunday evening, December 27, 2020, President Trump signed “H.R. 133 – The Consolidated Appropriations Act, 2021” (the Act). Included in the Act, is a provision to expand the Paycheck Protection Program (PPP).
It should be noted the Act now specifically includes cooperative housing corporations as defined in Section 216 of the Internal Revenue Code. Condominiums and homeowners associations are not included in the Act.
Not later than ten days after the date of enactment of the Act, the Small Business Administration (“SBA”) is required to issue regulations to carry out the Act.
Once we have worked through the voluminous text of the Act, and the SBA issues its regulations regarding PPP, we will provide an update.
Keep in mind, for the original round of funding for PPP loans, borrowers had to certify in good faith that there was an economic necessity for the PPP loan.
We recommend the boards of directors of cooperatives consult with their legal counsel regarding a cooperative’s ability to meet the criteria to apply for a PPP loan and receive subsequent forgiveness.