Last week the House passed a new COVID-19 relief package. This was a scaled down version of the previous HEROES Act, which cost more than $3.4 trillion. The new package cost $2.2 trillion. While the chances of a new bill passing appear remote, there are still some back channel discussions between with the House of Representatives and the White House.
Of particular interest are the PPP provisions in the bill. :
Second Draw PPP Loans
- An additional “Second Draw” PPP Loans will be available
- Up to $2 million in additional funds
- Limited to stations employing 200 people or less at any specific location
- Must show a 25% decline in gross revenue as compared to either the 1st Quarter, 2nd Quarter or 3rd quarter of 2019
- Must be spent on expenses in 24 weeks after the loan origination date or before September 30, 2021
- Loan recipients cannot be publicly traded on the national stock exchanges
Expanded Eligibility: Current definitions prevent any company that employs more than 500 people nationwide from becoming eligible for a PPP loan. This excluded many broadcasters. The new bill changes the definition and focuses eligibility on each local market. Also, stations must show the loan is needed to provide news, emergency information and other content.
Publicly Traded Companies: As drafted, companies that are traded on the national stock exchanges are not eligible for PPP loans. This means that many broadcast companies would not be eligible for a PPP loan even with the more expanded eligibility rule.
We are currently working with both the House and Senate staff to clarify this language. To the extent funds are necessary to provide local news and emergency information; those local stations should be eligible for a PPP loan.
Extending Section 1112 of the CARES Act: Section 1112 of the CARES Act for the SBA to pay, not just defer, principal and interest on SBA §7 (a) and §504 loans for six months. This provision has been extended.
To see a section by section summary of the entire House COVID Bill click HERE.
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