Relief for Co-ops through the Paycheck Protection Program

As part of the $900 billion COVID-19 relief stimulus package approved by the Senate yesterday night, December 21, 2020, housing cooperatives are to be included in the Paycheck Protection Program (PPP). The bill will go to the President this week for signature, whose aides say the bill will be signed. As part of its economic relief measures, which constitutes one of the largest economic relief measures in US history, the bill provides an additional $284 billion (of which $20 billion is reserved for NYS) for small businesses to expand the PPP and extends the deadline for the program to March 31, 2021.

Housing cooperatives were previously excluded from obtaining PPP relief. Under the bill, housing cooperatives will now be eligible for forgivable PPP loans if they meet eligibility requirements and a set of requirements for how the money is spent. Final details of the program have yet to be spelled out, but further guidance and guidelines from the federal government are expected in the near future. Board members and their managing agents should consult with their building’s legal and financial advisors to explore whether and how their cooperative may benefit from the expansion of the PPP. The attorneys at Turek Roth Grossman LLP are available for such discussions with their board clients and respective managing agents.