Tag Archives: Sandra Stoneman

COVID-19: New PPP Flexibility Act passed in the House of Representatives which focuses on Small Businesses, Hospitality and Restaurants

The new Paycheck Protection Flexibility Act (H.R. 7010) which focuses on small businesses and restaurants in particular has passed the House of Representatives.

The bipartisan Paycheck Protection Flexibility Act, was introduced last week by Reps. Dean Phillips, D-Minnesota and Chip Roy, R-Texas, and, is designed to extend the 8-week period under which loan recipients could spend the PPP money to 24 weeks while helping correct other provisions that would provide more flexibility to small businesses in the hospitality realm.

Many hospitality businesses have high overhead costs and low worker salaries, and, as such, will likely struggle to rehire their employees as their businesses have not reopened yet or, if they have reopened, have reopened with a smaller staff due to social distancing requirements for their customers. Additional challenges are presented as some former employees are seeing more income from enhanced unemployment benefits which will also make it difficult to rehire them.

A bipartisan group has already introduced a companion bill in the Senate. Its backers include Sens. Cory Gardner, R- Colorado, Tim Kaine, D-Virginia, Thom Tillis, R-North Carolina, Steve Daines, R-Montana, Angus King, I-Maine, and Debbie Stabenow, D-Michigan.

The Paycheck Protection Flexibility Act would:

• Extend the “covered period” under which small businesses can spend the loan proceeds from 8 weeks to 24 weeks or until Dec. 31, 2020.

Expand the 25% cap to use PPP funds on non-payroll expenses, such as rent, mortgage interest and utilities, to 40% of the total loan. Currently, small businesses must use at least 75% of the loan for payroll expenses to get maximum forgiveness, but under the bill that would change to 60% to get maximum forgiveness.

• Give small businesses more time to rehire employees or to obtain forgiveness for the loan if social distancing guidelines and health-related actions from the CDC or other agencies prevented the business from operating at the same capacity as it had before March 1.

• Allow small businesses to take a PPP loan and also qualify for a separate, recently enacted tax credit to defer payroll taxes, currently prohibited to prevent “double dipping.”

Remove the limits on loan forgiveness for small businesses that were unable to rehire employees, hire new employees or return to the same level of business activity as before the virus.

Extend the loan terms for any unforgiven portions that need to be repaid from 2 years to 5 years, at 1% interest.

Extend the period for when a business can apply for loan forgiveness, from within 6 months to within 10 months of the last day of the covered period, before it must start making interest and principal payments. Under the new bill, PPP loan interest and payment of principal and fees will be deferred until the loan is forgiven by the lender.

Duane Morris has created a COVID-19 Strategy Team to help organizations plan, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.

For Further Information:

If you have any questions about this post, please contact Brad A. Molotsky, Sandra Stoneman and Nanette Heide or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe!

COVID-19: SBA issues new Guidance on PPP Loans – Deemed Good Faith Certification Safe Harbor for Certain Loans

Earlier today, the SBA released FAQ 46 to its existing FAQ fact sheet, which addresses how the SBA will review borrowers’ required good-faith certification concerning the necessity of their PPP loan applications.

The full text of FAQ 46 can be found at https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequently-Asked-Questions.pdf)

46. Question: How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request?

Answer: When submitting a PPP application, all borrowers must certify in good faith that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”

SBA, in consultation with the Department of the Treasury, has determined that the following safe harbor will apply to SBA’s review of PPP loans with respect to this issue: Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.

SBA has determined that this safe harbor is appropriate because borrowers with loans below this threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment than borrowers that obtained larger loans. This safe harbor will also promote economic certainty as PPP borrowers with more limited resources endeavor to retain and rehire employees. In addition, given the large volume of PPP loans, this approach will enable SBA to conserve its finite audit resources and focus its reviews on larger loans, where the compliance effort may yield higher returns.

Importantly, borrowers with loans greater than $2 million that do not satisfy this safe harbor may still have an adequate basis for making the required good-faith certification, based on their individual circumstances in light of the language of the certification and SBA guidance.

The SBA has previously stated that all PPP loans in excess of $2 million, and other PPP loans as appropriate, will be subject to review by SBA for compliance with program requirements set forth in the PPP Interim Final Rules and in the Borrower Application Form. If SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness. If the borrower repays the loan after receiving notification from SBA, SBA will not pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning necessity of the loan request. SBA’s determination concerning the certification regarding the necessity of the loan request will not affect SBA’s loan guarantee.

Duane Morris has created a COVID-19 Strategy Team to help organizations plan, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.

For Further Information:

If you have any questions about this post, please contact Brad A. Molotsky, Nanette Heide, Sandra Stoneman or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe!

 

COVID-19: PA Outlines Plans to Create a Commonwealth Civilian Coronavirus Corps (“CCCC”)

As Pennsylvania plans to safely reopen the economy and recover from COVID-19, Governor Tom Wolf announced the creation of the Commonwealth Civilian Coronavirus Corps (“CCCC”), a public service initiative that will support efforts this fall to increase testing and contact tracing and provide critical new job opportunities in the public health sector.

Per Governor Wolf, “the CCCC will serve as a public service program that will expand our ability to conduct contact tracing and testing and mobilize Pennsylvanians to contain COVID-19.”

The Wolf Administration’s continued efforts to reopen Pennsylvania will, in its own words, depend on its ability to expand the availability of COVID-19 testing and develop a robust infrastructure to conduct surveillance and contact tracing. This work will allow Pennsylvanians to effectively monitor and respond to new cases and quantify mitigation efforts.

As PA plans to ramp up these efforts in the coming months, the CCCC would help bring these efforts to fruition by:

• Partnering with local public health agencies, community organizations, and the nonprofit community to expand Pennsylvania’s existing testing and contract tracing initiatives;

• Leveraging additional resources to fund testing and contact tracing initiatives;

• Exploring creative ways to recruit experienced Pennsylvanians with health care and public health experience to support this initiative; and

• Coordinating existing resources deployed by the commonwealth, including community health nurses and county health departments who are currently conducting testing and contact tracing throughout the state.

The CCCC is also hoped to provide for a unique opportunity for PA to recruit and train COVID-19-impacted dislocated and unemployed workers into public service for contact tracing roles, which would address Pennsylvania’s health and economic needs.

To foster this new workforce, the CCCC would:

• Engage partners in the workforce development system, existing allied health training programs, and AmeriCorps programs to build and strengthen a public health workforce across the commonwealth;

• Leverage existing workforce development resources to recruit, train, and connect the public health workforce with employment opportunities; and

• Engage public health and health care employers to connect trained workers with long-term career opportunities.

According to Governor Wolf said. “Through this public service initiative, Pennsylvanians will have opportunities in the months ahead to join a collective effort to ensure that we emerge from this pandemic a stronger Commonwealth.”

Duane Morris has created a COVID-19 Strategy Team to help organizations plan, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.

For Further Information:

If you have any questions about this post, please contact Brad A. Molotsky, Eve Klein, Sharon Caffrey, Sandra Stoneman or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe!

COVID-19: Treasury Extends Safe Harbor for the Return of PPP Dollars to May 18, 2020

By update to their Frequently Asked Questions, on May 14, 2020, the US Treasury added a new question 47, which extended the “safe harbor” repayment date for PPP loans from May 14 until May 18, 2020.

For the entire set of FAQs – see https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequently-Asked-Questions.pdf

Duane Morris has created a COVID-19 Strategy Team to help organizations plan, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.

For Further Information:

If you have any questions about this post, please contact Brad A. Molotsky, Nanette Heide, Sandra Stoneman or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe!