Keeping up with Federal Programs

On June 8 the Federal Reserve Board announced an expansion of its Main Street Lending Program (MSLP) to allow more small and medium sized businesses to receive support by making several changes, including: 

• Lowering the minimum loan size for certain loans to $250,000 from $500,000;
• Increasing the maximum loan size for all facilities;
• Increasing the term of each loan option to five years, from four years;
• Extending the repayment period for all loans by delaying principal payments for two years, rather than one; and
• Raising the Reserve Bank's participation to 95% for all loans.

Congress recently passed the Payment Protection Program Flexibility Act, which changes the rules on the CARES Act program. Changes include:

• Extended rehire deadline through end of 2020
• Payroll requirement changed to 60 percent (from 70 percent) 

The Treasury Department has extended certain deadlines for investors in Opportunity Zones.  The law firm of Holland & Knight have posted an overview of the changes to their website; these include: 

• Notice 2020-39 provides that if a taxpayer's 180-day investment period ends between April 1, 2020, and Dec. 31, 2020, the end of such taxpayer's 180-day investment period is automatically extended to Dec. 31, 2020.
• Qualified Opportunity Zone Businesses taking advantage of the working capital safe harbor can add an additional 24 months to their working capital safe harbor period.
• The period between April 1, 2020 and December 31, 2020 is disregarded for purposes of the 30-month “substantial improvement” period.
• QOFs that received proceeds from the disposition of QOZ property have up to 12 additional months to reinvest those proceeds in QOZ property.