“COVID-19: Important Resources” (17)
In the face of deteriorating financial conditions for a business, directors should revisit the fiduciary duties they owe to the business and be particularly attuned to the question of which parties are the proper beneficiaries of those duties.
The Small Business Administration (SBA) continued its incremental rollout of guidance for borrowers under the Paycheck Protection Program (PPP), with two interim final rules issued on the eve of Memorial Day Weekend.
Since late April, the SBA has released multiple pieces of guidance under its Paycheck Protection Program (“PPP”) relating to the requirement that borrowers demonstrate need for PPP funds in order to be eligible for a loan.
Our Wealth Management Group describes a new Massachusetts law that allows Massachusetts-based clients to sign and notarize their estate planning documents remotely during the pandemic and highlights three common planning techniques that are especially effective in the current market environment.
On April 30, 2020, the U.S. Federal Reserve published an FAQ and revised term sheets with new details regarding the Main Street Lending Program, including expanded eligibility for program loans and a new loan category.
On April 30, 2020, the Internal Revenue Service issued guidance in Notice 2020-32 providing that no deduction is allowed under the Internal Revenue Code for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a loan under the Payroll Protection Program established by the Coronavirus Aid, Relief and Economic Security Act.
New guidance has been issued by the Treasury Department on the financial need requirement for seeking a Paycheck Protection Program loan. This will push applicants that have other potential avenues for funding to weigh economic and PR considerations. Earlier borrowers, as well as those making applications now, should be mindful of the risks relating to taking a PPP loan in the absence of demonstrated need.
The initial limited funding for PPP under the CARES Act created a stampede of eager applicants who rushed to fill out PPP applications before the money ran out. The same phenomenon is likely to recur as the new funding is made available, creating a significant risk that applications contain innocent, reckless, or even fraudulent misstatements.