Emerging Markets Law

Showing 7 posts from May 2020.

Payroll Protection Program Loan Audit Considerations and Guidance

Coronavirus

On May 22, 2020, the U.S. Small Business Administration (SBA), in consultation with the Department of Treasury, issued an interim final rule on review procedures and related borrower and lender responsibilities with respect to Payroll Protection Program (PPP) loans. This interim final rule provides information to borrowers who have received a PPP loan as to what to expect in the SBA’s review of an individual PPP loan and/or audit of a PPP loan. Additionally, the interim rule expressly states the SBA may review any size PPP loan issued under the PPP loan program at any time (and noting that borrowers must retain PPP documentation for six (6) years after the date the loan is forgiven or repaid in full) and provides information as to what the SBA may review.

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Payroll Protection Program Loan Regulations on Forgiveness

Coronavirus

On May 22, 2020, the U.S. Small Business Administration (SBA), in consultation with the Department of Treasury, issued an interim final rule (regulations) on the forgiveness process, requirements and considerations with respect to Payroll Protection Program (PPP) loans. This interim final rule provides information to borrowers on forgiveness and is in line with the guidance contained in the Loan Forgiveness Application published on May 15, 2020.

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Considerations for Landlord on Responding to Tenant’s Request for Rent Relief

Coronavirus

Because of required closures and other challenges facing businesses during this pandemic, many tenants are unable to meet lease obligations and/or asking for concessions from landlords. Rather than wasting precious resources arguing about whether the tenant’s performance is excused based on force majeure, frustration of purpose or other legal concept, consider strategizing with your tenant to come to a mutually acceptable solution. When developing a working solution with your tenants, consider: What do you as landlord need at a bare minimum? What does your tenant need? Are there creative solutions to be had? What resources are available?

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SBA Forgiveness Application: Qualifying Costs and Forgiveness Considerations

Coronavirus

As set forth in the Paycheck Protection Program (PPP) provisions of the CARES Act, a borrower is eligible for forgiveness of a PPP loan in an amount equal to the sum of, generally, payroll costs, rent obligations, mortgage interest expense and utilities incurred and paid during an 8-week period commencing on the date a PPP loan is funded. In connection with eligibility for forgiveness, the Small Business Administration (SBA), in consultation with the U.S. Department of Treasury, recently issued the Paycheck Protection Program (PPP) Loan Forgiveness Application. The application is the first piece of guidance issued by the SBA with respect to forgiveness and aids borrowers in the tracking and calculation of loan forgiveness. Further, the form application and related instructions change certain anticipated aspects of forgiveness, while also increasing costs that may qualify for forgiveness. The following is a summary of the notable forgiveness application items relevant to many businesses.

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Affiliation Rules and Foreign Employees: Regulations Issued

Coronavirus

Under the Paycheck Protection Program (PPP) provisions of the CARES Act, generally a business is eligible for a PPP loan if the business, together with its affiliates, has 500 or fewer employees or operates in a certain industry and meets the applicable Small Business Administration (SBA) employee or revenue based size standard for that industry. Using the SBA permitted size standards, in some circumstances, a business (when considered together with its affiliates) could still be eligible for a PPP loan with greater than 500 employees.

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Highlights of Governor Brian Kemp’s Updated Reviving a Healthy Georgia Executive Order

Coronavirus

On May 12, 2020, Georgia Governor Brian Kemp issued an updated Executive Order regarding continued social distancing, sanitation and other measures for businesses, and continued prohibition of Gatherings (more than 10 people if they cannot be kept six feet apart). The Order can be found here.

Below are some of the key business points of the Order, which is in effect from May 14 through May 31, 2020. Restaurants are subject to extensive and complex requirements under the Order; those will be summarized separately. 

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Paycheck Protection Program Loan Forgiveness and Tax Deductions

Coronavirus

On April 30, 2020, the IRS announced in Notice 2020-32 (the Notice), its position regarding the disallowance of certain otherwise allowable tax deductions for a borrower (taxpayer) that is forgiven repayment of a Paycheck Protection Program (PPP) loan. While the notice is apparently contrary to the intent of Congress and not entitled to judicial deference because it was issued without prior notice and comment, the IRS nevertheless will attempt to enforce it. 

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