MPL General Counsel Corner – Another day, a few more updates

Today’s update is short and sweet, which means that karma is in play and something major will be released.  Let’s hope the Treasury Department provides some PPP loan forgiveness guidance soon, which is rumored to be out at the end of this month.  Speaking of that, Trout CPA has a webinar today at 10am which addresses this very topic.

The Dept. of Treasury did provide three updates yesterday related to the PPP loans.  See below for the links to the documents and brief overviews:

  1. PPP FAQ, Question 37:  Essentially, this is a rehash of FAQ 31.  If you are owned by a private company and that private company has adequate sources of liquidity, then you may not be eligible for the PPP loan.
  2. Updated Interim Final Rule – Seasonal Employers The update provided guidance on who the eligible lenders would be for seasonal employers.  If a lender can do all other PPP loans, they can do them for Seasonal Employers.
  3. Interim Final Rule on Disbursements:  This update provides some new guidance for lenders.  A few things to know:
    1. A borrower cannot take multiple draws from a PPP loan.  The disbursement must be one-time and in full.
    2. A loan is considered approved once an SBA loan number is received by the lender.  A lender has 10 calendar days to disburse the loan.
    3. For loans that have not been fully disbursed prior to this rule, the lender has 10 days to complete the full disbursement starting as of April 28, 2020.  The 8-week forgiveness period begins upon the first disbursement.
    4. Loans which have not been disbursed because the borrower has not submitted the required documentation within 20 days of loan approval shall be cancelled by the lender.  (This seems to contradict the 10-day disbursement rule in 3b above; any guidance from my accountant friends would be greatly appreciated)
    5. When disbursing loans, lenders must send any amount of loan proceeds designated for the refinance of an EIDL loan directly to the SBA and not to the borrower.

Here are some other things that may be important or relevant for you:

Please see all of our prior updates at the this link.  

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com) or anyone in our office with questions or comments.  

MPL General Counsel Corner – I’m from the government and I’m here to help…unless you don’t need the money

Feedback from my contacts tells me that the sprint out of the gates yesterday for the PPP loan processing was more like a stumble.  Apparently, there were issues with the SBA portal which hampered the restart.  Let’s hope it is straightened out.

I know this is the same message as yesterday, but please make sure you fully understand the business relief programs before you commit to them.  Not to scare you from applying, but this morning, Secretary Mnuchin made the statement that any businesses which received a loan of $2m or more will be subject to a full audit. Your business mentors and professional advisors are here to help.

Just remember what President Ronald Reagan said the nine most terrifying words in the English language are:  “I’m from the government and I’m here to help.

If you take the relief money and don’t need it, you could be subject to something that is certainly not “help” from the Federal Government.

Here are some other things that may be important or relevant for you:

  • What is this Force Majeure clause I have been hearing about? With the global disruptions in the supply chain, it would not be surprising to start seeing “Force Majeure” letters showing up on your doorstep.  Essentially, a party to a contract can assert a defense to nonperformance of a contract where performance becomes impossible due to unforeseeable events outside of the parties’ control.  I know this is a bit wordy, but it is important to understand that the applicability of this provision isn’t automatic, and you should understand the ramifications.  Please reach out to your legal advisor if you receive or are thinking of sending out a Force Majeure letter.
  • Tax code provisions could be the right relief option for your business:  The Tax Foundation has compiled a great coronavirus tax resource, which includes a state-by-state legislative tracker and a country-by-country fiscal measures tracker.  It is one of the better all in one resources that I have seen.  Please contact your CPA and/or business tax professional for help in this area.
  • Upcoming Webinars and Helpful Resources

Please see all of our prior updates at the this link.  

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com) or anyone in our office with questions or comments.  

MPL General Counsel Corner – …and they are off and running

The Kentucky Derby was originally scheduled for this Saturday, but we will have to wait until September.  In the interim the best race we can watch is part 2 of the PPP.  As of 10:30am today, SBA lenders are off and running trying to get as many PPP applicants put into the SBA portal as they can.  Reviewing the Dept. of Treasury website, there are a few additions that I think are important to understand and review if you are still pulling together documents.

  1. How to calculate loan amounts:  This details the appropriate documents to calculate your loan amount request for self-employed, 1099 Schedule F (i.e. Self Employed Farmers), Partnerships, S-Corps, LLC owners and non-profits.
  2. What about seasonal employers?:  Seasonal employers can now choose a 12-week period using either the previously approved measurement period or a from 5/1/2019-9/15/2019.  Also, a seasonal business that was dormant as of 2/15/2020 is eligible to apply if it had to have been in operation for at least 8 weeks from 5/1/2019-9/15/2019.

Here are some other things that may be important or relevant for you:

  • State by State reopening plans are a mixed bag:
  • Upcoming Webinars and Helpful Resources
    • Stambaugh Ness Town Hall (Tuesdays 2-4pm)
    • US Chamber of Commerce Webinars
    • NFIB Coronavirus Small Business Update (4/29 @ 12pm)
    • RKL Weekly Webinar Series (Every Friday).  To be added to the subscription list, please click here.  

Please see all of our prior updates at the this link.  

As always, please don’t hesitate to email myself, Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com) or anyone in our office with questions or comments.