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COVID-19 Legal Update: Amendments to PPP Loans

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Thanks to our good friend, Michael Futterman, Partner at McCusker, Anselmi, Rosen & Carvelli, P.C.* for the below helpful information for our clients and friends regarding the amendments to the PPP loans!

On Friday, June 5th, the President signed into law H.R. 7010 which amends several provisions of the CARES Act and the Paycheck Protection Program. In particular, the following changes are effective immediately:

Loan Forgiveness

  • The “covered period” for forgiveness is extended to 24 weeks or December 31, 2020, whichever is earlier. This additional time is critical for those businesses which are just now beginning to re-open.
  • The percentage of loan proceeds that must be used for payroll costs was changed from 75% to 60%. Keep in mind, the legislation adds a new wrinkle requiring you to meet this 60% threshold to obtain any forgiveness, as opposed to previously where it was proportional. In other words, you now need to make sure you hit 60%; otherwise there is no forgiveness.
  • The period to restore the number of employees and amount of payroll to qualify for full forgiveness has been extended to December 31, 2020.
  • The reduction penalty no longer applies if the borrower, in good faith, is able to document that:
    • The borrower was unable to rehire a terminated employee and unable to hire a similarly qualified employee to replace the terminated employee;  and
    • The borrower was unable to return to the same level of business activity as before February 15, 2020, due to compliance with guidance issued by Secretary of Health and Human Services, the Director of Center for Disease Control and Prevention or the Occupational Safety and Health Administration, during the period from March 1, 2020 until December 31, 2020, related to the maintenance of standards for sanitation, social distancing or any other worker or customer safety requirements related to COVID-19

Loan Details

  • The time to pay back any unforgiven portion of a PPP loan is increased to 5 years. This is automatic for loans submitted after June 5; pre-existing loans can also be extended to 5 years, but require agreement by the lender.
  • Payment of principal, interest and fees is deferred until “the date on which the amount of forgiveness determined…is remitted to the lender.”
  • Borrowers can now apply for loan forgiveness up to ten months from the day their covered period ends (whichever period is elected); if they fail to do so, no forgiveness will be allowed.

Payroll Taxes

  • Borrowers may defer 50% of the employer share of their 2020 Social Security taxes until end of 2021 and the other half until end of 2022, even if the borrower’s PPP loan is forgiven prior to December 31, 2020 (originally, deferral was not permitted for a borrower with a forgiven PPP loan).

*Attorney Advertising: The foregoing is a summary of the laws discussed above for the purpose of providing a general overview of these laws. These materials are not meant, nor should they be construed, to provide information that is specific to any law(s). The above is not legal advice and you should consult with counsel concerning the applicability of any law to your particular situation.



NY Forward Safety Program Guidance

NY Forward

Thanks to our good friend, Michael Futterman, Partner at McCusker, Anselmi, Rosen & Carvelli, P.C.* for the below helpful information for our New York clients and friends!

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Each business or entity, including those that have been designated as essential under Empire State Development’s Essential Business Guidance, must develop a written Safety Plan outlining how its workplace will prevent the spread of COVID-19.

A business may fill out THIS TEMPLATE to fulfill the requirement, or may develop its own Safety Plan. This plan does not need to be submitted to a state agency for approval but must be retained on the premises of the business and must made available to the New York State Department of Health (DOH) or local health or safety authorities in the event of an inspection. Business owners should refer to the State’s industry-specific guidance for more information on how to safely operate. For a list of regions and sectors that are authorized to re-open, as well as detailed guidance for each sector, please visit: www.forward.ny.gov.  If your industry is not included in the posted guidance but your businesses has been operating as essential, please refer to ESD’s Essential Business Guidance and adhere to the guidelines within this Safety Plan.

Please continue to regularly check the New York Forward site for guidance that is applicable to your business or certain parts of your business functions, and consult the state and federal resources listed below.

Here is a helpful list of things to keep in mind during this time:

  • New York businesses must create a COVID-19 health and safety plan for employees and the public. A template includes provisions for developing physical distancing protocols, providing personal protective equipment to employees, creating hygiene and cleaning protocols, implementing communication practices, creating a COVID-19 screening process, adopting contact tracing protocols, and developing a plan for cleaning and disinfection. It’s also a great resource for NJ businesses.
  • Make sure to implement mandatory health screening assessments including a questionnaire and temperature checks.
  • Limit the total number of employees in the office, enforce 6ft social distancing, and modify/reconfigure the office to allow for social distancing.
  • Provide workers with facemasks at no cost and have an adequate supply in case of need for replacement. Train workers on how to use PPE. Limit the sharing of objects (i.e. tools, machinery, etc.)
  • Adhere to hygiene, cleaning and disinfection requirements of the CDC and Department of Health. Provide and maintain hand hygiene stations in the office. Clean and disinfect the offices on a routine basis.
  • Communicate, post signage and train employees on COVID 19 issues.
  • Employees who are sick should stay home or return home if they become ill at work.
  • Don’t forget about your leave obligations under FFCRA, Emergency FMLA, New York State COVID-19 leave, New York Paid Family Leave, New York City or Westchester Earned Sick Time, New Jersey Earned sick Leave,  or short-term disability leave
  • Consider a delayed reopening or a slow opening, allowing employees to continue to obtain increased unemployment benefits.
  • Don’t forget about your wage and hour obligations i.e. when you reduce salary/hours, pay wages, furlough employees, have employees work from home, impose temperature checks, pre-shift sanitizing, or daily check-in procedures.

*Attorney Advertising: The foregoing is a summary of the laws discussed above for the purpose of providing a general overview of these laws. These materials are not meant, nor should they be construed, to provide information that is specific to any law(s). The above is not legal advice and you should consult with counsel concerning the applicability of any law to your particular situation.



New Jersey Specific Loans/Grants for Small Businesses

COVID-19 RESOURCES FOR NEW JERSEY SMALL BUSINESSES

Thanks to our good friend, Michael Futterman, Partner at McCusker, Anselmi, Rosen & Carvelli, P.C.* for the below helpful information for our Jersey clients and friends!

New Jersey’s Economic Development Authority recently approved a $40M program which will provide grants and loans or guarantee private bank loans to small businesses affected by the coronavirus pandemic. The EDA package includes a half dozen programs for New-Jersey based businesses including the following:

  1. The smallest businesses, those 10 or fewer full-time equivalent employees, can receive grants between $1,000 and $5,000. The grants specifically target companies in retail, personal-care, entertainment, recreation, accommodation, food service, laundry and repair services. In order to receive money, businesses will have to attest that they need this money to tide them over and won’t cut any employees or will make every effort to rehire laid off or furloughed staff.
  2. The EDA also has set aside $10 million to make loans up to $100,000 each to mid-sized businesses with less than $5 million in annual revenues to help them meet payroll. The 10-year loans would have zero interest for the first five years and the interest rate would be capped at 3 percent for the second half of the loan.
  3. Two more programs, $15 million in total, will be run through community development financial institutions to make available low-interest loans to small businesses that may not be able to tap into traditional bank borrowing. The NJ Entrepreneur Support Program targets start-ups with less than $5 million in revenue and fewer than 25 employees by providing 80 percent loan guarantees to entrepreneurs.

The $5 million in small business grants will open for applications at 9 a.m. TODAY. Other programs will be out in the coming weeks.  Application window opens TODAY at 9am, application here, https://www.njeda.com/pdfs/NJEDA_COVID-19_Economic-Response-Package-Initial-W.

*Attorney Advertising: The foregoing is a summary of the laws discussed above for the purpose of providing a general overview of these laws. These materials are not meant, nor should they be construed, to provide information that is specific to any law(s). The above is not legal advice and you should consult with counsel concerning the applicability of any law to your particular situation.