Tag: loan

New Guidance Issued about “Good Faith” Certification Requirement for PPP Loans

In submitting an application for a Paycheck Protection Program (a “PPP Loan”), applicants were required to certify in good-faith that receipt of the PPP Loan was “necessary to support” their “ongoing operations.” The manner in which the Small Business Administration (the “SBA”) will review whether or not such certifications were made in good faith is a topic of ongoing concern among PPP Loan recipients. Yesterday, May 13th, the SBA, in consultation with the U.S. Department of Treasury (“DOT”), indicated that “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” … “in good faith.” The SBA also indicated that, in the event it determines a borrower which received PPP Loans in an amount greater than $2 million did not make the required certification in good faith, it will provide such borrower the opportunity to repay the PPP loan and “will not pursue administrative enforcement or referrals to other agencies based on” such determination if the borrower does repay the PPP Loan.

The attorneys at RJG are regularly monitoring the PPP Loan guidance issued by the SBA and the DOT in order to assist clients in administering their PPP Loans and obtaining available loan forgiveness. Please contact Jim Valentine (jvalentine@rjglaw.com) or Kieran Casey (kcasey@rjglaw.com) if you have questions or require any assistance related to PPP Loan related issues.

If you Received a PPP Loan, Ensure you are Complying with the Applicable Guidance and Regulations

Businesses and non-profit organizations which have received a loan under the Paycheck Protection Program (a “PPP Loan”) must comply with a series of guidance and regulations, including employee retention and compensation maintenance requirements, in order to obtain the loan forgiveness provided by the Program. The attorneys at Rosenn Jenkins & Greenwald are regularly monitoring the PPP Loan guidance and regulations issued by the Small Business Administration and the United States Treasury Department in order to assist clients in administering their PPP Loans and obtaining available loan forgiveness. Please contact Jim Valentine (jvalentine@rjglaw.com) or Kieran Casey (kcasey@rjglaw.com) if you have questions or require any assistance related to PPP Loan forgiveness, or any other issues related to the administration of PPP Loans.

The Small Business Administration has Resumed Processing Economic Injury Disaster Loan Applications

The Small Business Administration (“SBA”) has resumed processing loan applications filed under its popular Economic Injury Disaster Loan (“EIDL”) program. The SBA previously announced that it was no longer processing EIDL applications, as funding for the program had lapsed. Applications that were previously submitted to the SBA will be processed on a first-come, first-served basis. At this time, the only new EIDL applications that will be accepted are those filed by agricultural businesses. However, it is anticipated that the SBA may reopen the EIDL program for new applications from other sectors in the future.

If you require assistance with a pending EIDL application or are interesting in submitting an EIDL application, please contact Paul T. Rushton (prushton@rjglaw.com) or Christyan A. Telech (ctelech@rjglaw.com) of our Business & Finance Department.

Supreme Court of Pennsylvania Order to Suspend Residential Evictions for Nonpayment of Rent or Loan Payment Extended through April 30, 2020

On March 18, 2020, the Supreme Court of Pennsylvania issued an Order suspending residential evictions for nonpayment of rent or loan payments, and this Order was recently extended through April 30, 2020. Furthermore, some local county courts have elaborated on this Order. For proceedings example, Luzerne County has postponed all Landlord/Tenant and eviction and this Order was similarly extended through April 30, 2020.

Furthermore, although the prohibition of evictions does not suspend the obligation to pay rent/mortgages, landlords/lenders may be willing to defer payments and/or enter into payment plans during the crisis. Additionally, on March 18, 2020, the Department of Housing and Urban Development (“HUD”) authorized the Federal Housing Administration (“FHA”) to put a moratorium on foreclosures and evictions for sixty days for single-family homeowners unable to pay their FHA backed mortgages. Similarly, Fannie Mae and Freddie Mac each announced that they were suspending foreclosures in connection with single family mortgages for at least sixty days for those experience hardship due to COVID-19.

As the current state of affairs is unprecedented, more information and resources may come available. Whether you are a landlord, tenant, business or anyone else looking for guidance on your specific situation during this difficult time, please contact Attorney Tom MacNeely at tmacneely@rjglaw.com, Attorney Zachary Berger at zberger@rjglaw.com or call (570) 826-5600. are a landlord, tenant, business or anyone else looking for guidance on your specific situation during this difficult time, please contact Attorney Tom MacNeely at tmacneely@rjglaw.com, Attorney Zachary Berger at zberger@rjglaw.com or call (570) 826-5600.

BUSINESSES AFFECTED BY COVID-19 SHOULD GIVE IMMEDIATE CONSIDERATION TO PAYCHECK PROTECTION PROGRAM LOAN

As the COVID-19 virus continues to affect the health of our communities and the operation of the economy, Federal, state and local governmental authorities, as well as certain for-profit and non-profit organizations, have established loan programs and/or other relief efforts to assist eligible businesses that have been adversely affected by the Coronavirus crisis.
 
For example, pursuant to the Coronavirus Aid, Relief, and Economic Security Act (“CARES”), the Federal government has created the Paycheck Protection Program (“PPP”) that is designed to make loans available to small businesses to encourage employee retention and assist employers in meeting ongoing payroll and debt obligations. PPP loans are guaranteed by the Small Business Administration (“SBA”) and made through existing SBA-approved lenders.
 
There are minimal requirements for eligibility for a PPP loan. In general, the borrower must have less than 500 employees and make a good-faith certification that the COVID-19 crisis necessitated the PPP borrowing and that the PPP loan will be used only for specified purposes, including certain interest payments, payroll costs, employee group health care benefits, rent, and utility payments. PPP loans do not require the posting of collateral security and have a maximum rate of interest of 4%. PPP loans are also eligible for full or partial forgiveness.
 
Starting on April 3, 2020, small businesses and sole proprietorships can apply for PPP loans through lenders that have previously offered SBA loans. Beginning on April 10, 2020, independent contractors and self-employed individuals can apply for PPP loans to cover their payroll and other certain expenses through existing SBA lenders. The current end date for PPL loan applications is June 30, 2020.
 
Because it is anticipated that the demand for PPP loans will be high and that the existing funding for the PPP will be insufficient to meet the anticipated PPL loan applications, it is strongly recommended that eligible borrowers submit an application for a PPP loan through a SBA-approved lender promptly following the opening of the window for PPP applications (i.e. on April 3, 2020 for eligible small businesses and sole proprietors and on April 10, 2020 for eligible independent contractors and self-employed individuals).
 
If you are interested in confirming your eligibility for a PPP loan, obtaining assistance with your PPP loan application, identifying a SBA-approved lender and/or learning more about other loan programs and relief assistance, Rosenn, Jenkins & Greenwald, LLP and its Business & Finance Department are available to assist you. Please feel free to contact any of the partners in our Business & Finance Department, including Paul T. Rushton at prushton@rjglaw.com, Steven P. Roth at sroth@rjglaw.com, or Lee S. Piatt at lpiatt@rjglaw.com. We are available to promptly assist you with these very important issues. Stay safe and healthy.