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Posted March 29, 2021 in Articles, Asset Protection, Corporate and Taxation, Estate Planning and Probate, News ,Thousands of small businesses scrambling to stay afloat as a result of COVID-19 are getting extra time to apply for PPP loans. By a 92-7 margin, on Friday, the Senate passed the PPP Extension Act of 2021 (“Act”), extending until May 31 the deadline for Paycheck Protection Program applications. The PPP was scheduled to sunset Wednesday, a timeline that could have prevented some 190,000 small businesses who have pending PPP applications from securing a loan. Previously, on March 16, the House passed the Act, by a 415-3 vote. This was a rare show of overwhelming bipartisan support! The Act also gives the SBA an additional 30 days beyond May 31 to process those loans. The Act now goes to President Joe Biden for his signature.
Posted March 19, 2021 in Asset Protection, Corporate and Taxation, Health Law, News ,Small businesses got some good news on Tuesday, when the House of Representatives voted to extend the Paycheck Protection Program for two months. On Tuesday, the House passed the PPP Extension Act of 2021, by a 415-3 vote. It would extend the program to May 31, instead of the current date of March 31, and give the Small Business Administration an additional 30 days to process loans. The bill now goes to the Senate, where it is expected to be approved. It's clear that the most vulnerable small businesses will need help beyond March 31, so we must pass this extension as quickly as possible," said Sen. Cardin in a Thursday statement. "This common sense, bipartisan bill will meet the continued demand for PPP loans by giving small businesses two more months to apply and giving SBA an additional month to process the loan applications by June 30."
Posted March 12, 2021 in Asset Protection, Corporate and Taxation, Estate Planning and Probate, News ,As addressed in previous Legal Beats, in order to qualify for a Paycheck Protection Program (“PPP”) second draw loan, the borrower must demonstrate that they had a 25% reduction in gross revenues, comparing a 2020 calendar quarter to a comparable 2019 calendar quarter (i.e., comparing the 2nd quarter of 2020 to the 2nd quarter of 2019, 3rd quarter to 3rd quarter, etc.), in order to qualify for a PPP second draw loan. As was the case with PPP first draw loans, borrowers must certify in good faith that “current economic uncertainty makes the loan request necessary to support the ongoing operations of the borrower”. Originally, during the early days of the PPP program, the “necessity” requirement created much uncertainty, as numerous large businesses, such as Shake Shack and Ruth Chris Steakhouse, applied for and obtained tens of millions dollars of PPP loans, resulting in the SBA reminding borrowers of their good faith certification of necessity. As a result, in a FAQ issued by the SBA last spring, it stated that loans with an original principal balance of less than $2 million will be deemed to have made the required certification concerning the necessity of the PPP loan request in good faith.
Posted March 8, 2021 in Asset Protection, Corporate and Taxation, Estate Planning and Probate, News ,The US Small Business Administration (“SBA”) recognizes that many independent contractors and sole proprietors were not able to borrow sufficient funds because their net income, as opposed to their gross income, was nominal, resulting from the incurrence of ongoing operating expenses, regardless of the economic impact the COVID-19 crisis was having on their business. As a result, the SBA issued a new Paycheck Protection Program (“PPP”) Interim Final Rule (“Rule”) on March 3, 2021, which will permit independent contractors and sole proprietors who file Schedule C Business form as part of their 1040 Income Tax return to to base their PPP Loan upon their “gross income” (line 7 of Schedule C), for their first draw PPP loan, if no loan has yet been received and/or for their second draw PPP loan, if the first loan has been received and used. The gross income reported on line 7 will still be capped at the same $100,000 as was net profit, so the maximum loan a Schedule C taxpayer may receive remains at $20,833 ($100,000 x 20.833%).
Posted February 22, 2021 in Articles, Asset Protection, Corporate and Taxation, Estate Planning and Probate, News ,On Monday, February 22, President Biden announced the following changes to SBA's coronavirus relief programs to ensure equity: Specifically, on Wednesday, February 24, 2021 at 9 am ET, SBA will establish a 14-day, exclusive PPP loan application period for businesses and nonprofits with fewer than 20 employees. This will give lenders and community partners more time to work with the smallest businesses to submit their applications, while also ensuring that larger PPP-eligible businesses will still have plenty of time to apply for and receive support before the program expires on March 31, 2021. SBA also announced four additional changes to open the PPP to more underserved small businesses than ever before. While these changes are being implemented, SBA will work with community partners to improve the emergency relief “digital front door” and conduct extensive stakeholder outreach. And, SBA will strengthen its relationships with lender partners to advance equity goals, deliver funding efficiently, and prevent fraud, waste, and abuse. SBA will: