Tell the Trump Administration and Congress to fix Paycheck Protection Program (PPP) loans to save construction jobs. Confusing guidance from the Treasury Department and the Small Business Administration (SBA), and inflexible rules written by Congress threaten the ability of construction businesses to access, hold onto, and use PPP loans to protect construction jobs.  

Unless the Trump Administration provides clearer, well-defined guidance about who qualifies for PPP loans, and how exactly these loans can be forgiven, many construction firms will face the difficult decision of returning their loan funds and cutting staff, or keeping the loans and risking a government audit. Similarly, Congress needs to waive the affiliation rules for loan eligibility and provide maximum flexibility for loan forgiveness to help protect construction jobs now and later.

At AGC’s urging, the Trump Administration rightly extended its initial deadline for encouraging firms to return their PPP loans from May 7 to May 14 without penalty. However, giving firms more time does little to protect jobs or support construction firm PPP loan borrowers unless the administration also clarifies recent, confusing guidance. Such new guidance should avoid one-size-fits-all industry standards, but rather standards that are flexible for all industries, including the uniqueness of construction that: 

• Preserves some levels of current business activity as a safe and essential industry despite significant future market uncertainties;
• Maintains considerable lines of credit for undertaking labor, materials and equipment intensive projects, to obtain and maintain required bonding capacity, and meet day-to-day cash flow needs amid uncertain owner financial means; and 
• Faces uncertain legal liabilities that may threaten business operations in the short-term and long-term.

Such reasonable clarity along with revisions to blanket federal audits—which sweep up good actors in with the bad—will help ensure that construction jobs are protected under this program as Congress intended.

Similarly, Congress can amend the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide reasonable accommodation for the construction industry by waiving the SBA’s complicated affiliation rules for PPP loan eligibility and allowing maximum flexibility in loan forgiveness. Congress should amend the CARES Act PPP loan provisions to allow such loan forgiveness flexibility by: 

• Expanding the period for which loan money must be used to more than eight weeks;
• Allowing businesses to choose when to commence that period based on market realities instead of when loan proceeds are received; and 
• Revising the confusing forgiveness loan reduction formula in statute to provide additional flexibility for employers. 

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