Best Practices: Unraveling the New Payment Subsidy Guidance in the Economic Aid Act
Section 1112 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020, provided payment relief to small businesses in the form of a payment subsidy from the U.S. Small Business Administration (the “SBA”) equal to six (6) months of payments on certain SBA loans. The recently ... Read More
Best Practices: Correcting PPP Loan Discrepancies Before a Partial or Full Forgiveness Denial
Now that SBA has established regulations and guidance for PPP, and lenders have moved into the PPP loan forgiveness process, they are identifying some PPP compliance issues that may have not been fully vetted or missed during the PPP loan origination process. SBA Interim Final Rule Docket No. SBA-2020-0033 (May 22, 2020) (“IFR 2020-0033”) states, ... Read More
Best Practices: IFR# 27: Information on Second Draw PPP Loans
As the COVID-19 pandemic remains a major obstacle to many small businesses, there is now another round of Paycheck Protection Program loan funding to assist struggling small businesses, including businesses who have already obtained a PPP loan last year. On January 6, 2021, the SBA published interim final rule #27 (“IFR 27”) detailing the procedures ... Read More
Best Practices: New Bill Delivers Another Round of PPP Loans and Payment Relief for Small Businesses
On December 27, 2020, a new relief bill intended to provide economic support to businesses was passed into law. This bill, entitled the Consolidated Appropriations Act 2021, establishes various programs to provide much-needed funding to individuals and businesses as the COVID-19 pandemic continues. Although the corresponding regulations have yet to be released, there are many exciting aspects of ... Read More
Best Practices: What to Do if Your Guarantor’s Primary Residential Mortgage is on Deferment
In the midst of the pandemic, lenders are finding that some common collateral structures are presenting new challenges when it comes to Small Business Administration (“SBA”) due diligence requirements and credit underwriting. One such scenario is when a lender requires residential real estate to be pledged as secondary collateral. For certain 7(a) loans, the SBA ... Read More
Best Practices: PPP Forgiveness Applications – Vendors, Lender Assistance and Fees
Because SBA was ordered to disclose the identities of millions of business owners who took Paycheck Protection Program (“PPP”) loans during the pandemic (after having previously disclosed loan data concerning borrowers that received $150,000 or more), an unintended consequence of the disclosure has been a proliferation of vendors who have contacted PPP borrowers. These “vendors” ... Read More
