PPP Flexibility Act Passes; Fundamentally Changes Forgiveness Rules

By: Matthew Mitchell and Scott Bleier               On June 3, 2020, the Senate passed, by unanimous consent, the Payroll Protection Program Flexibility Act (the “Act”), which eases certain forgiveness requirements to the favor of PPP loan recipients.  Specifically: Forgiveness Period Extended: The Act extends the Forgiveness Period of the …

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PPP Update: Treasury Department Releases New Regulations Related to PPP Forgiveness 

  As we have previously reported, a recipient of a Paycheck Protection Program (“PPP”) loan may be excused from the obligation to repay the loan if certain “Forgiveness Criteria” are met. On Friday, May 22, 2020, the Treasury Department released two Interim Rules that detail those Forgiveness Criteria: the Interim Final Rule on Loan Forgiveness, and …

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Treasury Department Releases PPP Loan Forgiveness Application Form: Technical Aspects of PPP Loan Forgiveness Explained, But Questions Remain

  Under the CARES Act, a recipient of a Paycheck Protection Program (“PPP”) loan may be excused from the obligation to repay the loan if certain “Forgiveness Criteria” are met. On Friday, March 15, 2020, the Treasury Department released the Paycheck Protection Program Form Loan Forgiveness Application (the “Forgiveness Application”). The Forgiveness Application is the first articulation …

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Paycheck Protection Program Update: What the Question 46 Guidance Means for Recipients of PPP Loans Under $2 Million

  As we have previously reported, on May 13, 2020, the Treasury Department and the Small Business Administration (the “SBA”) released new guidance, embedded in a Frequently Asked Questions memorandum, that relates to the "economic necessity" requirement for Paycheck Protection Program (“PPP”) loans (the “Question 46 Guidance”). The Question 46 Guidance may be found here. Of particular note:  The Question …

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Treasury Department Announces Safe Harbor for PPP Borrowers with Loans of Under $2 Million

  The Treasury Department announced new guidelines that relate to the "economic necessity" requirement for Paycheck Protection Program loans. Differing from the original guidelines, the updated guidelines appear to indicate that the Treasury Department, as a matter of administrative policy, will not subject a PPP borrower with a loan amount of under $2 million to an …

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The Federal Reserve Main Street Lending Program

    On April 30, 2020, the Federal Reserve released additional details concerning the proposed Main Street Lending Program. The release includes changes to the original term sheets for the Main Street New Loan Facility (MSNLF) and the Main Street Expanded Loan Facility (MSELF) and introduced a new term sheet for the Main Street Priority …

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Senate Approves Deal to Expand PPP Small Business Loan Program

On April 21, the Senate approved $484 billion in new coronavirus aid, of which $310 billion will be used to replace the exhausted funds of the Paycheck Protection Program (“PPP”). The House of Representatives is expected to pass the bill within days, with PPP loan application processing expected to recommence as early as April 23, …

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K-1 Distributions to LLC Members and Partnership Partners Constitute Payroll Costs for Purposes of PPP Loan Amount Calculation – Treasury Department Announces in Supplemental Interim Final Rule

By: Matthew L. Mitchell With the $350 billion fund allocated by Congress for the Paycheck Protection Program (“PPP”) exhausted, we are currently waiting to see if and when the PPP funding is extended. Amid these reports, the U.S. Treasury Department issued a second, supplemental Interim Final Rule (the “Second Rule”) that provides further guidance on …

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Practical Strategies For Venture And Private Equity Backed Businesses Considering PPP Loans

By: Jonathan D. Gworek and Matthew L. Mitchell With the issuance of the U.S. Treasury Departments “Interim Final Rules” and related Guideline within the Paycheck Protection Program’s (“PPP”) “Affiliation rules”, there have been concerns that the Affiliation Rules may deem the portfolio companies of venture capital and private equity firms as affiliates of the fund …

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Best Practices Before Applying For a PPP Loan: Board of Directors Meeting

Many small businesses in the United States are considering applying for a Paycheck Protection Program (“PPP”) loan. The PPP loans have certain eligibility requirements and require the applicants to make certain certifications on the application. In order for a company to be certain that it is eligible, and that applying for a PPP loan is …

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