Articles Tagged with Small Business PPP Attorneys

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As a result of the Novel Coronavirus (“COVID-19”), the federal government has passed significant legislation in an attempt to provide relief to businesses small-business-300x215struggling with economic hardships as a result of widespread closures and stay-at-home orders.  One major part of these governmental actions includes the passage of the Coronavirus Aid, Relief, and Economic Security Act (also known as the “CARES Act”) on April 2, 2020.

The CARES Act provides for approximately $2 trillion in aid through expanded unemployment assistance, individual relief checks, tax credits, loans, and grants to businesses which were closed or significantly effected by COVID-19, and funding to hospitals and health care facilities. Of this, approximately $350 billion was allocated to the CARES Act’s Paycheck Protection Program (“PPP).   When that money was almost immediately sought by the millions of businesses seeking assistance, an additional $175 billion was additionally allocated.

The PPP limited its funding to each company to two and a half times the company’s average monthly payroll costs.  While the PPP is considered a loan program, the funds may largely (or entirely) be forgiven as long as the company uses the funds for approved expenses. The details of exactly which expenses would be considered approved and how these funds could be used has been the subject of much uncertainty over the past several weeks.  Indeed, the SBA (Small Business Administration) has posted additional rules and guidance on the matter more than 10 times in two months.

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In this time of economic uncertainty due to the coronavirus and the social distancing required to slow it, our attorneys and staff are helping New Jersey sba-disasterbusinesses seek financing under the new Federal Small Business Paycheck Protection Program.  The basic elements of the program are below.  Call us to obtain help. Applications are being accepted starting April 3rd, and funding is limited, so time is of the essence.

Small Business Paycheck Protection Program

The new Paycheck Protection Program by the Federal Government will provide small businesses with funds to meet payroll and benefits costs, payroll taxes, vacation and sick leave payments, rent, mortgage interest, and utilities for up to  for up to eight weeks.  If the funds are used solely for these expenses and the number of the business’s employees stays the same, the loan can be fully forgiven (it is expected that seventy five percent of the forgiven amount will go to payroll expenses).  In other words, the loan is converted to a grant and does not need to be repaid.  The requirement can be met by retaining employees or quickly rehiring them by June 30, 2020.  If the number of full-time employees is reduced then the forgiveness will be reduced, and a pro rata portion of the loan will need to be repaid.  Only one loan may be taken.  The non-payroll costs need to have been incurred before February 15, 2020.

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