The evolving rule changes for the Paycheck Projection Program have triggered confusion and doubt among business owners the program is intended to benefit. During the weeks since the program’s loans became available in early April, its shifting federal guidelines have given some contractors second thoughts about tapping the small business rescue program out of fear they will be audited later.

Within a few days of the program’s launch on April 3, billions had been committed. The initial rules were fairly open-ended, enabling contractors, engineers, architects and other small businesses to borrow money at low interest rates to pay employees and meet other basic needs.

Businesses that could later show they used the money to prevent layoffs and keep the lights on could have loans forgiven.

The application required a borrower to document to its bank the number of full-time employees, as well as the dollar amount of payroll costs, mortgage interest, rent payments and utilities for the eight-week period following the loan.

For most of them, the program was seen as a lifeline, said Ira Robbins, chief executive of Valley National Bancorp, in a television interview with Bloomberg. “Many of the owners cried when we told them they had been approved.”

Since then, construction companies that were approved say they have gone weeks with uncertainty about whether to keep the funds. And while Treasury officials have since backtracked, eschewing plans to audit loans under $2 million, the threats of later audits, possibly long after the crisis has passed, has unnerved some contractors.

Richard E. Forrestel Jr., treasurer of the Cold Spring Construction Co. in Akron, N.Y., took advantage of a grace period extended by the Treasury Dept. to return a $2.2-million Small Business Administration loan the road and bridge contractor had received.

“I think the rollout was disheveled and a disaster,” Forrestel said. “The rules flip-flopped several times.”

According to interviews with contractors that appeared on Roofing Contractor’s website, the uncertainty continued into the first week of May.

Dwayne Nash, president of Roseville, Calif.-based Kodiak Roofing & Waterproofing Co., said in early May that he wanted to know what the federal government’s loan repayment and forgiveness policies would be. “We’re looking for clarification from Washington,” he said.

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Insurance Costs

Stan Robinson, the owner of Tualatin, Ore.-based Pacific West Roofing, said the unsettled issues that concerned him included whether the SBA and Treasury Dept. would consider covering the costs of insurance related to employees. He, too, told Roofing Contractor (whose parent company, BNP Media, is also the parent of ENR) that he was uncertain about keeping the funds.

“If I don’t need it I’ll give it back as long as I know it goes to the right people,” he said, noting the struggles of the restaurant industry.

Another engineering-and-construction-related company reported receiving approval for a $5.6-million loan.

The company, Atlanta-based Perma-Fix Environmental Services, received approval via PNC bank. Perma-Fix says it provides nuclear, low-level radioactive, mixed-waste hazardous and nonhazardous waste treatment, among other services. It has 308 employees and, with its shares publicly traded on the NASDAQ exchange, a capitalization of $71.4 million.

The $5.6-million promissory note secured under the program, the company reports, has allowed Perma-Fix to recall staff “and avoid future furloughs and layoffs.”