MONDAY MORNING MINUTE  

                  April 13, 2020
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PAYCHECK PROTECTION PROGRAM DETAILS - RELIEF TO CONTINUE PAYROLLS FOR EMPLOYERS AND INDEPENDENT CONTRACTORS
The Paycheck Protection Program ("PPP") authorizes forgivable loans to small businesses to pay their employees during the COVID-19 crisis. All loan terms will be the same for everyone,  from small businesses with payrolls to sole proprietors and independent contractors.  For guidance from the Treasury link, click here

The loans are designed to cover payrolls or provide income protection for 2.5 times the average monthly income based upon a 12-month calendar or 12 month average income.    The loan amounts will be forgiven as long as:
 
  • The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made; and
  • Employee and compensation levels are maintained
 
Payroll costs are capped at $100,000 on an annualized basis for each employee. It is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs. Loan payments will be deferred for 6 months.
 
Last week, small businesses and sole proprietorships could apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders. It is anticipated today, April 13, that independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.   For the "who," "what", "how" and "where" information, see the link above.   
 
The details on how to guarantee that this loan will be forgiven are not crystal clear as of this newsletter.  We suggest the following:  Ensure That the PPP Funds are used only for allowable expenditures.  That means maintaining payroll with no layoffs and spending no more that 25% to rent and utility expenses.  Call your tax advisors and attorneys to maximize the forgivable amount of the loan.  Document the money received and how it was spent with segregation of monies deposited if required.  Document, document, document to substantiate payrolls and other expenditures for rent and utilities.  Consider the other avenues of relief available, and how a PPP loan would benefit your organization, given and in conjunction with the CARES Act, and other relief available.  Immediately after the 8-week period, ask your lender to forgive the loan.  Document all correspondence with lenders before, during, and after the loan protection money is received and spent. 
 
Feel free to call us for advice and referrals to lenders.
SPOGNARDI BAIOCCHI LLP is  a law firm dedicated to partnering with companies of all sizes to address the full spectrum of legal concerns for its business.  Our commitment is to find common sense solutions that fit each clients' unique situation to labor, employment, human resources and general business needs. 

With over 50 combined years of experience among its 2 founding partners in these areas, we can assist businesses in developing custom solutions to today's tough issues.  And as litigators, who combined have over thousands of trials  "under their belts" before state and federal courts as well as administrative agencies (such as the NLRB) you will find no better advocate and partner. 
 
For more information on the firm, please go to our website at www.psb-attorneys.com or Lisa at lab@psb-attorneys.com
 
TRUSTED LEGAL ADVISORS 
FOR 
ALL YOUR BUSINESS NEEDS
                      
DISCLAIMER: All content in this Client Alert is intended for general information only and is current as of the date and time of circulation.  Nothing contained herein should not be construed as legal advice applicable to your particular situation.  No attorney-client relationship is created. Before taking any action based on the information contained herein, you should consider your personal situation and secure the necessary legal and/or professional advice.