Paycheck Protection Program (PPP) Resources
- KO Firm
- May 15, 2020
While it’s critical to stay informed during this challenging time, businesses and employees alike are being inundated with information and resources regarding the COVID-19 pandemic, including the host of new laws that have been passed. We’ve provided this resource page to help you quickly access the most timely updates. To receive the latest updates via email, subscribe now.
Additional SBA Guidance Released for PPP Loans
The safe harbor is extended; an opportunity for increased loan amounts for certain businesses.
New SBA Guidance on PPP Necessity Certification and Forgiveness
New Guidance With Regard to the Certification of “Necessity” of PPP Loan, and updates on loan forgiveness impacts if a laid off employee declines an offer to be rehired.
May 11, 2020
New Information on Paycheck Protection Program (PPP) Loans
We’ve summarized recently released information related to the Paycheck Protection Program Loans (“PPP Loan”).
April 30, 2020
New SBA Guidance to PPP Loan Applicants
Last week, additional SBA guidance was issued providing additional clarity to the certification all PPP loan applicants must make.
April 29, 2020
Uses and Forgiveness of PPP Loans
As companies begin to receive funds under the Paycheck Protection Program (PPP) Loans, they should keep in mind certain restrictions and guidelines regarding use of the funds.
April 23, 2020
Webinar: KO Partner Dan Fredrickson Talks About Top COVID Legal Issues
As businesses face significant challenges and uncertainty in light of the COVID-19 pandemic, KO Law Firm partner Dan Fredrickson recently led a webinar on identifying and managing COVID-19 legal risks. Dan discusses key legal issues that business should consider regarding new stimulus measures as well as contract matters such as force majeure, failures to perform, supply chain disruption, leasing concerns and personnel issues.
April 17, 2020
PPP Loan Funds Allocated: What it Means for Businesses
Yesterday, the SBA reported that all Congressionally appropriated funds for the Paycheck Protection Program loans (“PPP Loans”) have now been allocated. Find out what this means for you and your business including five frequently asked questions about loan status, next steps and options for other relief programs.
April 15, 2020
Paycheck Protection Program Loans: New SBA Guidance
Last week and over the past two days, new guidance has trickled out of the SBA regarding the Paycheck Protection Program loans (PPP Loans). Specifically, a third Interim Final Rule was issued and the FAQ was updated. We’ve outlined important updates for you to know with details on each of the following:
- Do not count foreign employees
- Affiliate test
- $100,000 salary cap
- Choice of time periods for determining number of employees and payroll costs
- Employers cannot include payments to independent contractors or sole proprietors
- Use gross pay in calculations
- Start date of 8-week period
- Guidance for Independent Contractors and Sole Proprietors
- Guidance for Members of LLCs and Partners in Partnerships
- Expanded Eligibility for Companies with Gambling Revenue
- Guidance for Hotels, Restaurants and Franchises
April 3, 2020
Since our last email, additional guidance has been issued, as well as an updated (and supposedly final) application form. Below are links to the relevant documents.
- Interim final rule from SBA
- Final application (same link as before, but the application has been updated as of April 3)
- How Businesses Can Navigate Top Legal Issues During COVID-19
Please note that the interest rate has changed since our last email: it is now 1.0%. The new guidance also makes it clear that businesses that are calculating payroll costs should not include payments to their independent contractors in those calculations; only payments to their employees. (Note that this does not affect the ability for the independent contractors themselves to apply for a PPP Loan. They can do so starting April 10.)
Today is the first day that financial institutions are taking applications, but there are still a number of financial institutions that aren’t ready yet. The fastest avenue will still likely be to apply with the financial institution where you currently do your banking. Please continue to check with your financial institution about their application process. The latest SBA guidance confirmed that money will be disbursed on a first-come, first-served basis.
Note that if you are VC- or PE-backed, we are expecting additional guidance from the SBA in the coming days regarding the “affiliation” rules. However, note that if no single VC or PE owns more than 20% of the equity of your company and no single VC or PE has a majority of voting power of the preferred stock entitled to exercise the protective provisions in your company’s charter, then you should reach out to us for further analysis, as there is a good chance that your VC or PE will not be deemed an “affiliate.”
As always, if you have questions about how to navigate COVID-19 related impacts pertaining to this or any other business matters or contractual commitments, please don’t hesitate to contact us.
March 31, 2020
Today, we’re highlighting some of the most critical items you should review to determine your potential eligibility under the Paycheck Protection Program for a loan under the CARES Act. Below, we’ve linked to guidance from the Department of Treasury, which explains the program in further detail. We recommend that you read the Treasury Department guidance for more details, and connect with us for further discussion:
- General Overview
- More Detailed Overview
- Application (Updated April 3)
- How Businesses Can Navigate Top Legal Issues During COVID-19
Most companies with fewer than 500 employees will qualify for the Paycheck Protection Program loans. You don’t have to prove that you were financially affected by COVID-19; you don’t have to prove you can’t get credit elsewhere; you don’t even need to pledge any collateral or give a personal guaranty. The loans have a 0.5% fixed interest rate, but even better—they will be forgiven in full as long as the spending requirements are met.
This kind of government program is unprecedented in our lifetime and could essentially result in a much needed infusion of cash for your business at a critically important time.
If you think you might want to apply for a loan, reach out to your bank today, ask them if they will be participating in the Paycheck Protection program, and tell them that your company is interested. We have heard that banks are generating lists of companies expressing interest, and some may be doing first come, first served loan application reviews. Then, start gathering the paperwork necessary to complete the application; some banks will start accepting applications as soon as April 3.
Note that if you are VC- or PE-backed, your eligibility to qualify for a loan may be affected by the “affiliate” attribution rules. If that is the case, reach out to us, and we can help you navigate whether you are still eligible. We anticipate that the SBA will provide additional guidance on this issue in the coming days.
Independent contractors and self-employed individuals may also qualify for the Paycheck Protection Program, and applications for this group open on April 10. Please feel free to reach out to us for more details.
If you have questions about how to navigate COVID-19 related impacts pertaining to this or any other business matters or contractual commitments, please don’t hesitate to contact us.