After 3 weeks of threats, the SBA has relaxed its position on borrowers who received PPP loans of less than $2 million, providing a complete safe-harbor for the “uncertainty/necessity” certification. Borrowers with larger loans can also breathe easier; they will have a chance to repay upon the SBA’s request, before facing liability. According to SBA FAQ #46, all companies that,…
Friday afternoon, the SBA’s inspector general outlined areas of SBA’s PPP regulations that do not comport with Congress’ language in the CARES Act. In the crosshairs: the requirement that at least 75 percent of the forgiven sum be comprised of payroll costs. According to the IG, this rule would result in tens of thousands of borrowers paying back operational expenses…
The SBA announced Tuesday that PPP borrowers will have an additional week to decide whether to send back their loan. Before this new May 14 deadline, the SBA will release additional guidance on how the SBA will critique a borrower’s “uncertainty” certification. As of Monday, 117,834 PPP loans have been issued to Ohio borrowers. As a condition to receiving a…
As of 1 p.m. Friday, President Trump signed Covid 3.5 legislation, which infused $310 billion into the Paycheck Protection Program, giving small business owners a second chance to receive forgivable loans. The consensus among bankers is that there is a large backlog of applications. The reason? Congress underfunded the original PPP program, and then delayed for two weeks before adding…
Last month the Securities and Exchange Commission (the “SEC”) proposed a number of amendments to the existing rules governing exempt offerings. These amendments aim to simplify the current exemption framework, in order to improve access to capital and investment opportunities. 1. Regulation D The proposed rules make several changes to the Regulation D exemption in an attempt to expand its…
Small and mid-sized companies that are affected by Covid-19, but otherwise profitable, will soon have opportunity to apply for loans via the $600 billion Main Street Business Lending Program, created under the CARES Act. Who is Eligible? Size/Revenue Test A company with either: 10,000 or fewer employees**, or $2.5 billion or less in 2019 revenue **The CARES Act set a…
Half the battle was getting your piece of the $349 billion package of forgivable small-business loans, known as the Paycheck Protection Program (PPP). Now that you have the funds, what’s next? First of all – If you’re an eligible employer who is reading this, and has NOT yet applied through your banker for a PPP loan, please read my earlier…
On April 1, 2020, Ohio Governor Mike DeWine signed Executive Order 2020-08D, which “requests” landlords and mortgage lenders with Ohio small business tenants and commercial borrowers to pause prosecution of lease and loan defaults caused by the COVID-19 pandemic. Specifically, the Order frames the directives as three separate “requests”: 1. “Landlords are requested to suspend, for a term of at…
Over the last few weeks, in the wake of COVID-19, multiple Federal and State laws have been passed that impact employment law. The attorneys at Cavitch have provided comprehensive summaries on these new laws. Below is a brief summary of the benefits employees are entitled to under the new legislation to date, as well as areas where Federal and Ohio…
Cavitch is advising its lending and business clients on the implications of the CARES Act, which President Trump signed into law on March 27. One of the most critical components of the Act is $350 billion in new SBA loans under Section 7(a) of the Small Business Act. Banks will begin taking applications for businesses on April 3, and on…
