Construction

When the Small Business Administration (SBA) announced in late October that it will introduce a new Loan Necessity Questionnaire it created concerns about loan forgiveness eligibility. Borrowers with loans of $2M or greater are required to complete either SBA Form 3509 or 3510 depending on whether the borrower is a for-profit business or a nonprofit organization. The purpose is to help the SBA determine, for loan forgiveness purposes, whether the good faith certification about economic necessity made the loan necessary to support ongoing operations. Unfortunately, there were no comments or guidance issued when the announcement was originally made leaving the 42,000 impacted borrowers with more questions than answers.

As the closing weeks of 2020 quickly approach many Atlanta businesses are taking a closer look to uncover new tax-saving opportunities. Given the number of challenges presented by the COVID-19 pandemic, it is not surprising there have been several new and extended federal tax incentives introduced to help businesses survive and recover. While valuable tax-saving opportunities, it is important not to forget about the tax extenders passed by Congress at the end of 2019. The one most relevant to Atlanta construction companies and contractors is the Section 45L, New Energy Efficient Home Tax Credit, which provides a credit for meeting certain energy efficiency minimums.

he COVID-19 pandemic has created disruption across the economy impacting businesses in every industry. It started in March with forced business closures and stay at home orders and has continued with modified operating rules issued by the state and Centers for Disease Control (CDC). While necessary to protect public health, it has resulted in one of the most challenging business climates in decades. Although each industry has been impacted differently, construction has not been immune to the fallout.

Stay-at-home orders and supply chain disruptions resulting from the COVID-19 pandemic were two of the biggest changes impacting the construction industry this year. The trickle-down effect as states have fully reopened is that projects are now being approached very differently particularly when it comes to bidding

The Paycheck Protection Program (PPP) has been a useful tool in helping construction contractors weather the COVID-19 pandemic. As of June 30th, over 466,000 loans have been issued to industry companies totaling more than $64B. These numbers are stunning and reflect not only the depth of economic impact but also the popularity of the program.

Over the past few months, Atlanta construction contractors have been dealing with the business challenges arising from COVID-19. Managing unexpected and sudden jobsite closures, changing safety guidelines, and ongoing labor shortages have put contractors in a precarious position. Many have had to revisit contracts for those jobs which have been delayed/canceled to assess exposure.

When the COVID-19 pandemic arrived in Georgia many construction projects were delayed or halted due to new orders and restrictions. Although the CDC has published workplace safety guidelines for job sites, states have been struggling to determine the optimal combination of health and safety requirements.

Heading into the second half of 2020, the construction industry is bracing for slow growth and continued business disruption. Contractors are looking at lower revenues, tighter profit margins, project delays and cancellations, and potential workforce shortages as COVID-19 fluctuates.

The impact of the COVID-19 emergency including containment efforts have created challenging situations for many Atlanta businesses, both initially and through reopening. During the first weeks of forced business closures and shelter in place orders, individuals and businesses were required to significantly change everyday patterns. Not only were local stores, restaurants and gathering places closed, but many did not want to risk going out for fear of infection.

The impact of the COVID-19 forced business closure and stay at home orders have created difficult conditions. Almost overnight businesses were forced to endure significant changes to their business model which came with difficult decisions about expenses, employees, and the future. While much of the attention has focused on the retail, restaurant, and hospitality industries the construction industry was also sharply impacted.