Two members of Congress from Queens are calling on the federal government to allow co-ops and condos to be eligible for loans under the Paycheck Protection Program (PPP), the federal stimulus program designed to help small businesses through the COVID-19 crisis, the Queens Daily Eagle reports. The PPP backs loans that are forgiven if owners of small businesses keep employees on payroll during the pandemic. The federal government has ruled that real estate interests, including co-ops and condos, are ineligible for the loans.
In a letter to Treasury Secretary Steven Mnuchin and the Small Business Administration's Jovita Carranza, Reps. Grace Meng and Tom Suozzi asked for co-ops and condos to be allowed to receive PPP loans. In their letter, Meng and Suozzi said the residential buildings are “facing the same dire liquidity challenges as other businesses” due to job losses, declining rental income from commercial tenants, and significant usage increases in utilities. They added: “The devastating health impacts of the pandemic has thereby brought enormous financial losses to these units.”
The two lawmakers said that allowing condos and co-ops to use PPP loans to pay their essential employees would be a “lifeline” as they struggle to deal with the coronavirus.
In an interview with Habitat, Stuart Saft, a partner at the law firm Holland & Knight, contends that the spirit of the federal CARES Act is that all small businesses are supposed to be eligible for the PPP loans. But an interpretation of rules by the Small Business Administration has blocked co-ops and condos from receiving any of the money. Saft says only an act of Congress will change the current situation.
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