Business interruption insurance is intended to cover income lost because ordinary operations are disrupted (typically by a natural disaster, but also because of government action in some cases). Has anything in recent memory been more disruptive to business operations than COVID-19? Business interruption is an optional extra added on to casualty insurance (your commercial general liability policy, property damage coverage, etc.). If you do not know whether you have it, you should probably stop reading now, and go check. While you are checking, look to see whether you have endorsements or riders specifically covering communicable diseases. Your business interruption policy …
Ohio Enforcement Regarding “Essential” Business Determinations
As virtually all Ohio residents and business owners know, Dr. Amy Acton, the Director of Ohio’s Department of Health, issued a “Stay at Home Order” on March 22, 2020, and issued an amended and extended Stay at Home Order through May 1, 2020, on April 2, 2020. Dr. Acton’s Order requires “all businesses and operations” in Ohio to cease all activities except “Minimum Basic Operations” unless the business activities consist only of employees working from home. The Order permits “Essential Businesses and Operations” to continue – with requirements relating to social distancing to protect employees and patrons. The Order prompted …
Federal Reserve Announces Roll Out of Main Street Lending Program
The Federal Reserve on April 9, 2020 announced the basic preliminary terms of its Main Street Lending Program (“MSLP”) authorized under the CARES Act. The MSLP will enhance support for small and mid-sized businesses “that were in good financial standing before the crisis” by offering 4-year loans to companies employing up to 10,000 workers or with revenues of less than $2.5 billion. The MSLP offers non-forgivable (unlike the Paycheck Protection Program) loans from private banks in two varieties: (1) a new loan with a maximum loan amount of $25 million (a “New Facility”) (New Facility Term Sheet.pdf), and (2) an …
Small Business Administration Provides Further Guidance on Key Payroll Protection Program Questions
The SBA FAQ PUBLISHED April 6, 2020, (https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequenty-Asked-Questions.pdf) clarifies several issues for which many small businesses and their advisors have been seeking guidance. 1. Alternative Size Test Available We know applicants with less than 500 employees qualify for a PPP Loan, as do other businesses that meet the size test based on their NAICS Code, even if they employ greater than 500 employees; however, a “small business concern” can also qualify for the Paycheck Protection Program if it meets both tests in SBA’s “alternative size standard” as of March 27, 2020. Those tests are: (i) maximum tangible net …
UPDATED: Federal and State Courts in Ohio Extend Deadlines and Change Procedures
We previously reported that Ohio’s General Assembly passed emergency COVID-19 legislation that “tolled” or postponed all statutory deadlines in the State of Ohio that otherwise would have expired between March 9, 2020 and July 30, 2020. That post can be found here. Since that time, the Ohio Supreme Court issued an order on March 27, 2020 tolling the time requirements imposed by Ohio court rules that otherwise would have expired between March 9, 2020 and July 30, 2020 (or the expiration of Governor Mike DeWine’s emergency order, Executive Order 2020-01D, whichever comes sooner). While the Supreme Court did not close …
Toolkit: A 4-Step Toolkit to Address Uncertainties
COVID-19 and the ripple effects are wreaking havoc on the American economy and especially small and medium-sized businesses. Many clients have asked us about “best practices” and “what other people are doing.” The objective of this Toolkit is to assemble that information for you in one place. That includes a recurring 4-step process utilizing best practices to manage in a crisis. We will maintain and update this Toolkit throughout the crisis. We will post updates to our COVID-19 Resource Center where you will also find a broad range of information, links, examples and tools. (Toolkit) Disclaimer: The information you obtain …
Changes in PPP Loan Program in the SBA’s Interim Final Rule
On April 2, 2020, the SBA issued an “Interim Final Rule” providing interpretations and guidance for loans under the Payroll Protection Program (“PPP”). The interim rule is effective immediately despite the fact that the SBA will continue to take comments for 30 days. This is a first come, first served program that will continue until the earlier of June 30, 2020, or until the funds are exhausted. Secretary Mnuchin has indicated the President will request additional funds if the initial $350 billion is over-subscribed. Disclaimer: The information you obtain at this site is not, nor is it intended to be, …
SBA Issues Last Minute Interim Rule On Paycheck Protection Program Loans
On Thursday, April 2, 2020, the U.S. Small Business Administration (SBA) issued an Interim Final Rule (IRF), which constitutes the much-anticipated “Regulations” called for in the CARES Act on implementation of the Paycheck Protection Program (PPP). While the IRF is considered “interim” and requests public comments over a 30-day period, it is anticipated that lenders will rely on it once they begin accepting and processing applications for those small businesses seeking PPP loans. We previously explained the program in our blog post found here. Among other key changes in the IRF are the following clarifications: Independent Contractors. Contrary to the …
Ohio Health Director Continues “Stay at Home Order” Through May 1, 2020
On Thursday, April 2, 2020, Governor DeWine announced an Amended “Stay at Home” Order issued by Ohio Health Director Amy Acton, MD, MPH (the “Amended Order”). The Amended Order extends the original Order’s two-week restrictions on the ability of individuals in Ohio to leave their residences, this time through May 1, 2020 at 11:59 PM. Additionally, the Amended Order continues the prior Order’s prohibition on the operation of non-essential businesses and operations. The same exemptions for businesses operating as “essential businesses and operations” created under the initial Order still apply. Notably, the Amended Order provides some new requirements for stores …