New 24 Week Period

[Tal10]

So what is to stop small businesses from laying off employees now that the covered period has been extended to 24 weeks?

[Lee B]

I think the FTE calculations will prevent that.

[GLJEANNE]

Some businesses will have to - if they brought back people while they were closed or semi-closed, based on the 8 week period, then they've used up most of the funds.  And depending on the area, they may not be fully opened for quite a while yet.

[Edsel]

I believe the passage of 24-week recovery will not help many companies.  The very mention seduces the imagination to think that the amount of forgiveness is tripled.  Not so.

If a company borrows $200,000 and during the first 8 weeks incurs expenses which will qualify for $175,000 in forgiveness.  There is only $25,000 left, and at the rate of spending, it will be used up in another couple weeks.

The only companies which will be helped by an extension to 24 weeks are those companies who will need the extra time to accumulate enough expenses to forgive their total loan.

[Edsel]

On 6/9/2020 at 9:27 AM, cbslee said:

I think the FTE calculations will prevent that.

CBSlee you raise an interesting question.  For many companies, they have intended to maintain FTEs throughout the 8 week period.  Does your comment mean they will now have to maintain FTEs through the 24-week period??

[Lion EA]

No to either. The old rules are return FTEs by 30 June; the new rule is by the end of 24 weeks or 31 December, whichever comes first.

That could be helpful for restaurants and hair/nail salons and hotels who are not open yet or open at 25% capacity and need more time to hire (replacements for those not returning/staying on unemployment).