The New Year is already proving to be a busy one. A new Congress, new COVID-19 strains and vaccine promises, and a new stimulus package making its way to American citizens and businesses. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 was signed into law just before the New Year. And while the $600 checks being sent directly to the American people and the extension of additional unemployment benefits seems to have captured the national attention, the $900 billion relief package will provide support to much more than the personal pocketbook.
Notably, the popular Paycheck Protection Program has reopened to small businesses everywhere with an additional $284 billion in funding. Though there have been some updates to the program, as laid out in greater detail in Dechert’s latest OnPoint on the topic, this additional funding will allow for small business hit hard by the pandemic to apply for a second set of forgivable small business loans, even if they have already obtained a PPP loan. With another chance to receive some support from the federal government, small business tenants may be able to breathe a little easier.
Tenants may also find some relief in the extension of federal eviction protections until January 31, 2021 (although at President Biden’s urging, the CDC has pledged to extend the moratorium through at least March 31) and from states such as New York, which extended its moratorium through May. However, kicking this can farther down the road only delays the inevitable. The rent will someday come due again, and when it does, the back rent with it. It remains to be seen where the money for these payments will come from when it’s time to pay up. While, for mortgage holders, the bill does not update any of the original CARES Act forbearance guidelines, it does provide HUD with budget and power to finance operating losses at certain FHA insured hospitals and residential care facilities.
Additionally, employers who have deferred their employees’ payroll taxes under Trump’s August 2020 executive action will now have until the end of 2021 to increase their withholdings. Troubled Debt Restructuring provisions of the CARES Act have also been extended through January 1, 2022. Finally, the bill continues to call into question the future of CECL accounting standards, as the bill delays the implementation of the standard by an additional year.
As President-elect Biden continues to call for additional relief, it is possible that we will see even more assistance from the federal government in the days to come. As things evolve, we promise to continue to bring you relevant updates. In the meantime, gather your PPP paperwork and prepare for a busy year ahead.