More than 973,000 jobs in Virginia were spared through the Paycheck Protection Program, according to data released by the U.S. Treasury Department.
So what happens if businesses still cut their staff?
Employers that received PPP funds are eligible for loan forgiveness, but they could be on the hook for some or all of that money if they laid off employees in their covered timeframe. That’s according to Steve Bulger, a regional administrator at the U.S. Small Business Administration.
Bulger says borrowers can get a reprieve if the losses were the result of uncontrollable circumstances created by COVID-19. "If they can document that and submit that as part of the forgiveness application, then they are eligible to have those particular numbers of employees deducted from the forgiveness calculation."
Bulger explains that many businesses will receive protections under so-called safe harbor rules, which deem borrowers of less than $2 million to have made their certification ‘in good faith.’
According to Veronique de Rugy, a senior research fellow at the George Mason University Mercatus Center, the rules offer a pretty big loophole. "So it’s going to actually mean that a lot of people are going to see their loans forgiven," de Rugy says, "no matter what they’ve done in terms of employees."
For the businesses that got more than $2 million and made staff cuts, a review isn’t guaranteed, she says, but even if it does happen, the language offers a lot of leeway.
In Virginia, over 973,000 jobs were listed as having been retained through PPP loans, according to an analysis of data released by the U.S. Treasury Department this week.
That list doesn’t include numbers from thousands of businesses in the Commonwealth that indicated no jobs were retained through the loans. Bulger says that’s an oversight. “The vast majority of them were the very small companies that didn’t really have any employees or who were self employed individuals. So, that’s the biggest bulk of it, I think there were some other situations where that information just wasn’t conveyed in the application form.”
In Virginia, that list of unknowns includes the United Network for Organ Sharing, which received a loan between $5-10 million; the furniture company Plow & Hearth and the nonprofit People for the Ethical Treatment of Animals, both of which received loans between $2-5 million; and the Dulles Hotel Corporation, which does business as Washington Dulles Airport Hilton and received a loan between $1-2 million.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
