Attorneys Brian Enright and Suzanne Scibilia are accustomed to providing business advice in support of all aspects of their clients’ enterprises, from normal day-to-day matters and ongoing business transactions to the structural changes involved in formations and mergers of companies. Counseling clients through a pandemic, however, has been a novel experience for both. With their combined fifty years of experience, they have countered the new challenges posed at a breakneck pace with aplomb.
As the COVID-19 crisis unfolded over the course of spring 2020, Brian and Sue provided guidance in the following ways to help clients navigate the resulting widespread business closures, new legislation, and evolving loan processes.
PPP Education
When coronavirus cases resulted in business closures in March, Brian and Sue worked with lenders and borrowers alike to help them understand the Paycheck Protection Program (“PPP”) under the CARES Act and keep up with a rapid series of legislative orders. They addressed questions such as, “How do I qualify for PPP?” and “How do I certify financial need for PPP?” from a range of borrowers, including small manufacturers, restaurants, and catering facilities.
Brian and Sue issued Client Alerts to provide additional information. Read more about how to certify financial need for the PPP program here.
PPP Implementation
As clients received funds through PPP, the attorneys transitioned to helping with implementation, and addressing questions such as, “How do I use PPP funds?” and “How soon do I need to use PPP money?”
With the enactment of the Paycheck Protection Program Flexibility Act in June, the answer to this question has been in flux. Read more here about how the Paycheck Protection Program Flexibility Act Makes Significant Changes to CARES ACT PPP Program.
PPP Loan Forgiveness
As businesses found themselves the recipients of funds from an approved loan under PPP, the focus shifted to how to properly use the money and whether, and to what extent, the loan would be forgiven, in light of the representations – and certifications – made in the application process. In late April, Brian and Sue issued the Alert, Warning to Employers about the Employer’s Certification as to the “necessity” of the PPP Loan. They followed this up in early May with, Navigating the Use and Need to Repay Your PPP Loan.
With the enactment of the Paycheck Protection Flexibility Act (“Flexibility Act”) in June, referenced above, the answer to questions about loan forgiveness continue to change and Brian and Sue are keeping their clients informed each step of the way. Read more about how the Paycheck Protection Program Flexibility Act Makes Significant Changes to CARES ACT PPP Program.
Other Funding Sources
While there has been significant focus on PPP, it is important to note the availability of a few other funding options. Brian and Sue continue to work with lenders and borrowers in interpreting the programs, determining which are the best fit for each situation, as in many cases, you can only use one.
The Economic Injury Disaster Loan Emergency Advance (EIDL) program has been in place for several years. It is not a forgivable instrument, but a loan, and a viable source of reasonably-priced capital.
The Main Street Lending Program is administered through the Federal Reserve Bank and serves as another potential source of capital.
Reopening Responsibilities and Liabilities
As restrictions are lifted in phases over the months of May and June, Brian and Sue are following the latest on the Governor’s guidance, and helping their clients determine the legal feasibility of reopening while complying with the requirements to self-certify with the state Department of Economic and Community Development.
Brian, Sue, and the entire Corporate Business & Transactions Practice Group will continue to monitor the regulations and guidance on this topic and provide additional updates.
We encourage you to speak with one of the firm’s transactional group attorneys to answer any questions.