June 4, 2020
Last night the Senate passed House Bill 7010, the Paycheck Protection Program Flexibility Act (the "Act"), which for the most part provides substantial relief to recipients of loans under the Paycheck Protection Program (PPP). The President is expected to sign the Act into law. The Act changes the PPP and the forgiveness provisions of the CARES Act.
Summary
Big take-aways:
May 28, 2020
It is well known that the quality of a loan portfolio is dependent on the quality of the loan files. That is certainly true of loan portfolios created under the Paycheck Protection Program (PPP). Documentation will be the key to ensuring positive outcomes for both borrowers and lenders.
The Small Business Administration (SBA) has indicated its intention to review many loans made under the PPP.…
May 27, 2020
Recent guidance from the Treasury Department (Treasury) and the Small Business Administration (SBA) continues to promote an inclusive definition of forgivable expenses. On May 22, 2020, Treasury published its fourteenth interim final rule related to the Paycheck Protection Program (PPP): “Business Loan Program Temporary Changes; Paycheck Protection Program-Requirements-Loan Forgiveness”…
May 21, 2020
The Treasury Department issued a rule implementing changes in the Paycheck Protection Program (PPP) eligibility safe harbor and the lender reporting deadlines previously authorized in the Paycheck Protection Program Loans Frequently Asked Questions (FAQs). On May 20, 2020, Treasury issued its Thirteenth interim final rule, “Business Loan Program Temporary Changes; Paycheck Protection…
May 18, 2020
The Small Business Administration (SBA) issued the "Paycheck Protection Program Loan Forgiveness Application” and instructions (App). Later today, Bob Tweel will be publishing an article summarizing the App’s features. This post highlights a few significant procedural features of the App and some apparent efforts to make the forgiveness calculations easier and more expansive.
Procedural features…
May 18, 2020
The Small Business Administration clarified the treatment of borrowers that submitted size certifications that excluded the non-U.S. employees of the borrower and its foreign affiliates under the Paycheck Protection Program (PPP). On May 18, 2020, the Treasury Department (Treasury) issued its twelfth interim final rule on the PPP: “Business Loan Program Temporary Changes; Paycheck Protection…
May 18, 2020
In June 2019, the U.S. Securities and Exchange Commission adopted Regulation Best Interest. Regulation BI (as it is known) imposes a new standard of conduct for broker-dealers when making recommendations of any securities transaction or investment strategy (including account recommendations) to a retail customer. Regulation BI also applies to associated persons of broker-dealers that are natural…
May 16, 2020
The Forgiveness application produced by Treasury answers several questions about the forgiveness process:
PAYROLL COSTS
The application states that borrowers are eligible for forgiveness for payroll costs paid and payroll costs incurred. This indicates that both costs incurred and costs paid should be eligible for forgiveness. Payroll costs are considered paid on the day that paychecks are…
May 16, 2020
Late last night the House passed the Heroes Act, H.B. 6800, which tries to expand the scope of the Paycheck Protection Program and does provide some necessary technical corrections. The Act also changes other key provisions and definitions, the reasonableness of which should be debated and cross-checked carefully. However, one change in the Act should be highlighted to ensure it was intentional:…
May 15, 2020
Mark Twain once observed that while history does not repeat itself, “it rhymes.” The federal government’s response to COVID-19 is likely to follow a familiar pattern: (a) the federal government will continue to provide massive amounts of financial aid in an effort to stave off the worst economic effects of the crisis; (b) some of those funds will be allocated to entities that the public perceives…
May 15, 2020
The Internal Revenue Service (“IRS”) recently updated its frequently asked questions (“FAQs”) regarding the Employee Retention Credit (“ERC”) under the CARES Act. Here are some important highlights.
What is a government order that completely or partially suspends an employer’s operations?
Recall that the ERC allows an Eligible Employer to receive a tax credit in the amount of 50% of the qualified…
May 15, 2020
Electric cooperatives that are tax exempt under 501(c)(12) of the Internal Revenue Code (Code) are considered business entities organized for profit and therefore eligible for loans under the Paycheck Protection Program (PPP) as long as other eligibility requirements are met.
The Treasury Department published its Eleventh interim final rule: “Business Loan Program Temporary Changes; Paycheck…
June 4, 2020
Last night the Senate passed House Bill 7010, the Paycheck Protection Program Flexibility Act (the "Act"), which for the most part provides substantial relief to recipients of loans under the Paycheck Protection Program (PPP). The President is expected to sign the Act into law. The Act changes the PPP and the forgiveness provisions of the CARES Act.
Summary
Big take-aways:
May 28, 2020
It is well known that the quality of a loan portfolio is dependent on the quality of the loan files. That is certainly true of loan portfolios created under the Paycheck Protection Program (PPP). Documentation will be the key to ensuring positive outcomes for both borrowers and lenders.
The Small Business Administration (SBA) has indicated its intention to review many loans made under the PPP.…
May 27, 2020
Recent guidance from the Treasury Department (Treasury) and the Small Business Administration (SBA) continues to promote an inclusive definition of forgivable expenses. On May 22, 2020, Treasury published its fourteenth interim final rule related to the Paycheck Protection Program (PPP): “Business Loan Program Temporary Changes; Paycheck Protection Program-Requirements-Loan Forgiveness”…
May 21, 2020
The Treasury Department issued a rule implementing changes in the Paycheck Protection Program (PPP) eligibility safe harbor and the lender reporting deadlines previously authorized in the Paycheck Protection Program Loans Frequently Asked Questions (FAQs). On May 20, 2020, Treasury issued its Thirteenth interim final rule, “Business Loan Program Temporary Changes; Paycheck Protection…
May 18, 2020
The Small Business Administration (SBA) issued the "Paycheck Protection Program Loan Forgiveness Application” and instructions (App). Later today, Bob Tweel will be publishing an article summarizing the App’s features. This post highlights a few significant procedural features of the App and some apparent efforts to make the forgiveness calculations easier and more expansive.
Procedural features…
May 18, 2020
The Small Business Administration clarified the treatment of borrowers that submitted size certifications that excluded the non-U.S. employees of the borrower and its foreign affiliates under the Paycheck Protection Program (PPP). On May 18, 2020, the Treasury Department (Treasury) issued its twelfth interim final rule on the PPP: “Business Loan Program Temporary Changes; Paycheck Protection…
May 18, 2020
In June 2019, the U.S. Securities and Exchange Commission adopted Regulation Best Interest. Regulation BI (as it is known) imposes a new standard of conduct for broker-dealers when making recommendations of any securities transaction or investment strategy (including account recommendations) to a retail customer. Regulation BI also applies to associated persons of broker-dealers that are natural…
May 16, 2020
The Forgiveness application produced by Treasury answers several questions about the forgiveness process:
PAYROLL COSTS
The application states that borrowers are eligible for forgiveness for payroll costs paid and payroll costs incurred. This indicates that both costs incurred and costs paid should be eligible for forgiveness. Payroll costs are considered paid on the day that paychecks are…
May 16, 2020
Late last night the House passed the Heroes Act, H.B. 6800, which tries to expand the scope of the Paycheck Protection Program and does provide some necessary technical corrections. The Act also changes other key provisions and definitions, the reasonableness of which should be debated and cross-checked carefully. However, one change in the Act should be highlighted to ensure it was intentional:…
May 15, 2020
Mark Twain once observed that while history does not repeat itself, “it rhymes.” The federal government’s response to COVID-19 is likely to follow a familiar pattern: (a) the federal government will continue to provide massive amounts of financial aid in an effort to stave off the worst economic effects of the crisis; (b) some of those funds will be allocated to entities that the public perceives…
May 15, 2020
The Internal Revenue Service (“IRS”) recently updated its frequently asked questions (“FAQs”) regarding the Employee Retention Credit (“ERC”) under the CARES Act. Here are some important highlights.
What is a government order that completely or partially suspends an employer’s operations?
Recall that the ERC allows an Eligible Employer to receive a tax credit in the amount of 50% of the qualified…
May 15, 2020
Electric cooperatives that are tax exempt under 501(c)(12) of the Internal Revenue Code (Code) are considered business entities organized for profit and therefore eligible for loans under the Paycheck Protection Program (PPP) as long as other eligibility requirements are met.
The Treasury Department published its Eleventh interim final rule: “Business Loan Program Temporary Changes; Paycheck…
