On May 15, 2020, the United States Treasury Department issued its long awaited Paycheck Protection Program (“PPP”) Loan Forgiveness Application Instructions (“Forgiveness Application”), including a PPP Loan Forgiveness Calculation Form (with instructions) and a list of expected supporting documents to accompany the Forgiveness Application (3245-0407 SBA Form 3508 PPP Forgiveness Application.pdf). The following is a summary of the material points from this guidance.[1] Eight-Week Period for Measuring Forgiveness – a Helpful Option Added The Borrower’s loan forgiveness is measured during the eight-week/56-day period following receipt of the PPP loan, with the first day being the date of receipt of the …
PPP Loans — Building the Case to Support Your Certification of Economic Need
UPDATE AS OF MAY 5, 2020 – SBA EXTENDS SAFE HARBOR TO MAY 14, 2020 AND PROMISES FURTHER GUIDANCE PRIOR TO THEN In creating the Paycheck Protection Program (“PPP”), the CARES Act required that “an eligible recipient applying for a covered [i.e., PPP] loan shall make a good faith certification that . . . the uncertainty of current economic conditions makes necessary the loan request to support the ongoing operations of the eligible recipient.” To that end, the application for a PPP loan includes the following certification by the applicant: “[c]urrent economic uncertainty makes this loan request necessary to support …
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 …
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 …
UPDATE 3.27.20: Small Business Administration Simplifies Disaster Loan Online Application Process For Direct Government Funds Up To $2 Million For Qualified Small Businesses
Congress Passes and President Signs CARES Act, Expanding SBA Disaster Loan Program and Loosening Program Requirements, As Well As Other Relief Programs As the COVID-19 outbreak wreaks havoc across many sectors of the economy, small businesses in particular are shouldering a heavy burden. While other relief packages may be forthcoming, the Disaster Loan Assistance program administered by the Small Business Administration (SBA) offers direct government funds through an existing program to private for-profit businesses and nonprofit organizations of up to $2 million with low interest (3.75%), long-term payback provisions (up to 30 years). Here is a summary of the program …
Coolidge Wall Adds Attorney and Paralegal to Growing Corporate and Business Department
Coolidge Wall Co., L.P.A. is pleased to announce that Tino Monaldo and Debra Aldred have joined the firm in its growing Corporate and Business Department. Monaldo brings more than 30 years experience in a wide variety of transactions for both publicly and privately held corporations, managing, negotiating and drafting transaction documents in a variety of industries including gas pipelines, ethanol, oil and gas, construction, engineering, car dealerships, hotels and casinos. For more than 24 years, Monaldo served as outside General Counsel for a Kansas City-based energy entrepreneur, which included the ownership and operation of a 3,000-mile interstate gas transmission pipeline …