New Legislation Affords Additional Flexibility for PPP Borrowers
June 8, 2020
Dear Clients:
The U.S. Government has just signed into law the Paycheck Protection Program Flexibility Act of 2020 with several important updates to the existing PPP program giving borrowers increased flexibility to spend and obtain loan forgiveness.
These updates are summarized as follows:
One aspect of the legislation allows PPP borrowers to apply for a 24-week period (so, approximately 6 months) in which PPP funds may be used and repayment forgiven – three times longer than the original 8 week period. This recognized that many Small Businesses remained closed well after receipt of PPP funds.
A second aspect of the legislation reduces to 60% the portion of PPP funds required to be applied toward payroll costs, allowing up to 40% to be used toward certain non-payroll costs, including mortgage interest, rent, and utilities.
A third aspect of the legislation recognizes that, while PPP loan forgiveness was intended for employers to maintain employees on the payroll, certain employees may refuse to return to work, or it may be difficult to hire similarly qualified employees. Thus, borrowers may be able to obtain loan forgiveness if they can document the inability to rehire employees or hire substitute employees.
A fourth aspect of the legislation allows loan forgiveness when borrowers reduce employees due to the inability to return to prior levels of business activity from complying with CDC and other applicable health and safety requirements.
A fifth aspect defers payment of certain employer payroll taxes.
Finally, to the extent PPP borrowers may not qualify for loan forgiveness, the legislation substantially increases the time for repayment, from 2 to 5 years.
The U.S. Government continues to provide additional guidance on this and related legislation and we are following these updates.
We remain available to assist you and your business regarding this and other aspects of your business’ recovery strategy in the wake of the Coronavirus, and if you have any questions, please feel free to email the attorney(s) handling your matter directly, or contact the Firm at info@levittlawllp.com.
Best regards,
LEVITT LLP
Loan Forgiveness under the Federal Paycheck Protection Program
May 21, 2020
Dear Clients:
The U.S. Government has released an application for Small Business borrowers seeking forgiveness of loans issued to them under the Paycheck Protection Program (“PPP”). PPP has been a popular program to fund Small Businesses’ jobs retention efforts as part of the federal Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Contributing to the popularity of PPP was the prospect of loan forgiveness if employers maintained employees on the payroll.
Below is a link to the loan forgiveness application, which also provides new guidance for PPP borrowers:
https://www.sba.gov/document/sba-form–paycheck-protection-program-loan-forgiveness-application
The U.S. Government continues to provide additional guidance on this legislation and we are following these updates.
We remain available to assist you and your business regarding this and other aspects of your business’ recovery strategy in the wake of the Coronavirus, and if you have any questions, please feel free to email the attorney(s) handling your matter directly, or contact the Firm at info@levittlawllp.com.
Best regards,
LEVITT LLP
Additional Funding for Small Business Relief under the CARES Act
April 27, 2020
Dear Clients:
The U.S. Government has just made available approximately $320 billion in additional funding for the Paycheck Protection Program (“PPP”), a program to aid Small Businesses’ jobs retention efforts under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Due to the popularity of PPP, the funding under the initial legislation had rapidly depleted, warranting the new interim funding measure.
Under PPP, Small Businesses (generally those having 500 or fewer employees) can apply for loans of up to $10 million through various financial institutions certified through the U.S. Government, to fund up to 8 weeks of payroll costs, including benefits. Loan repayment terms are highly favorable to Small Businesses, allowing repayment over a two year period, at a nominal 0.5% interest rate. Consistent with the legislation’s goal to retain jobs, loan repayment obligations are forgiven altogether if employers maintain employees on the payroll.
PPP and other programs under the CARES Act can be an important piece of your business’ recovery strategy in the wake of the Coronavirus. The U.S. Government continues to provide guidance on this legislation and we are following these updates.
We remain available to assist you and your business, and if you have any questions, please feel free to email the attorney(s) handling your matter directly, or contact the Firm at info@levittlawllp.com.
Best regards,
LEVITT LLP
Relief for Small Businesses under the Federal CARES Act
April 7, 2020
Dear Clients:
The U.S. Government has just put into effect the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) which makes financial resources available to Small Businesses (that is, businesses generally having 500 or fewer employees) impacted by the Coronavirus.
A key piece of the CARES Act legislation pertinent to Small Businesses is the Paycheck Protection Program (“PPP”), which is targeted toward jobs retention. Under PPP, Small Businesses can apply for loans of up to $10 million through various financial institutions certified through the U.S. Government, to fund up to 8 weeks of payroll costs, including benefits. Loan repayment terms are highly favorable to Small Businesses, allowing repayment over a two year period, at a nominal 0.5% interest rate. Consistent with the legislation’s goal to retain jobs, loan repayment obligations are forgiven altogether if employers maintain their employees on the payroll.
The CARES Act makes other relief options available to Small Businesses experiencing financial difficulties due to the Coronavirus. These include:
- The Economic Injury Disaster Loan (“EIDL”), a U.S. Small Business Administration (“SBA”) loan program which allows Small Businesses to apply to for loans of up to $2 million in response to a declared disaster, and the related EIDL Emergency Advance, which offers an advancement of up to $10,000 that may be forgiven;
- The SBA Express Bridge Loan, which provides rapid access to business loans of up to $25,000 from SBA-specified lenders; and
- Temporary automatic repayments and/or deferments of payments by SBA with respect to existing loans issued through some SBA loan programs.
The various funding options can be applied for through the SBA’s website, which is accessible at this link:
https://www.sba.gov/funding-programs/loans/coronavirus-relief-options.
The CARES Act can be an important piece of your business’ recovery strategy in the wake of the Coronavirus. The U.S. Government continues to provide guidance regarding the CARES Act and we are following these updates.
We remain available to assist you and your business, and if you have any questions, please feel free to email the attorney(s) handling your matter directly, or contact the Firm at info@levittlawllp.com.
Best regards,
LEVITT LLP
Legal Response to Coronavirus (COVID-19)
March 27, 2020
Dear clients, colleagues, and friends:
We hope this message finds you, your families, and personnel all in good health in the wake of the Coronavirus (COVID-19).
Levitt LLP is closely monitoring and assessing the situation and the response of Federal, State, and local governments, and the potential impacts on our clients and the business community.
Throughout this, Levitt LLP remains open for business and our attorneys continue to handle client matters remotely.
You or your business may have certain remedies due to business interruption and there may be important timeframes to follow, for example, in promptly pursuing potential insurance coverage. During this event, it may become impractical for your business to comply with contracts due to circumstances beyond your control. We also anticipate contracting parties and insurance carriers will try to renegotiate contracts to limit your legal rights. We are ready to help you address these issues.
This is an unprecedented event, and we are also working to develop new theories and strategies so that when this is all over, we will be able to react and assist you in getting back to business and limiting your exposure – whether that means helping you enforce your contracts through litigation, developing strategies to try to avoid or delay contract terms, and assisting you in your transactional needs, insurance recovery efforts, and updating your contracts and everyday business forms.
As always, if we can be of assistance, please feel free to email the attorney(s) handling your matter directly, or contact the Firm at info@levittlawllp.com.
Best regards and stay well,
LEVITT LLP