On April 29, 2021 Governor Newsom signed California A.B. 80, largely conforming to Federal rules relating to deductibility of expenses paid with funds from forgiven Paycheck Protection Program (PPP) loans. The $150,000 limitation in prior versions of A.B. 80 was removed, and replaced with a requirement that only non-publicly traded companies who reported losses of
Federal Loan and Financial Support Programs
UPDATED: The Reauthorization and Revival of the Paycheck Protection Program and Economic Injury Disaster Loan Program under the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act
[Update: This article has been updated since its initial publication on December 31, 2020.]
On December 27, 2020, President Donald Trump signed into law the Consolidated Appropriations Act, 2021 (the 2021 Consolidated Appropriations Act), an omnibus statute that is comprised of, among other laws, twelve fiscal year 2021 appropriations bills for the federal government and…
The October 2, 2020 SBA Procedural Notice: Change of Ownership Transactions Involving PPP Borrowers
On October 2, 2020, the U.S. Small Business Administration (SBA) released a Procedural Notice providing guidance addressed to Paycheck Protection Program (PPP) lenders and SBA employees as to the circumstances under which prior SBA approval is required before a borrower of a PPP loan undergoes a change of ownership.[1] In particular, the October 2,…
Some Strings Attached: Main Street Lending Program And Private Company M&A
The Main Street Lending Program, intended to provide credit support to small and medium sized businesses, became operational on July 6, 2020.[i] It includes many borrower-favorable economic terms, including a 5-year term, a low interest rate (capped at LIBOR + 3%), an interest payment deferral of 1 year and a principal payment deferral of…
Paycheck Protection Program: Updated Loan Forgiveness Estimator Workbook
Below please find a link to a newly-updated version of the Sheppard, Mullin, Richter & Hampton LLP (Sheppard Mullin) Paycheck Protection Program (PPP) Loan Forgiveness Estimator Workbook (the Workbook), which was created by and is the property of Sheppard Mullin.
The Workbook updates and replaces the Loan Forgiveness Estimator Workbook that Sheppard Mullin released on…
Interplay of Main Street Lending Program Documents (the Rights and Role of the Main Street SPV)
The $600 billion Main Street Loan program has been highly anticipated to provide financial support in the form of loans to small and medium-sized U.S. businesses affected by the COVID-19 pandemic. The Federal Reserve Bank of Boston that is administering the Main Street Loan program has released term sheets and various other program documents for…
PPP Updates: Extension of the Application Deadline, Disclosure of PPP Borrowers Receiving Greater than $150,000 in PPP Loans, and the “Owner-Employee” Dilemma
On July 4, 2020, President Trump signed into law a bill passed by the U.S. Congress that extends the application deadline for the Paycheck Protection Program (PPP)[1] from June 30, 2020 to August 8, 2020. The extension of the PPP application deadline comes on the heels of the latest PPP report issued by the…
Updates to the PPP Loan Forgiveness Application Form
By Nirav Bhatt & Bijal Vira
On June 16, 2020, the U.S. Department of Treasury (Treasury) and U.S. Small Business Administration (SBA) published an updated Loan Forgiveness Application for borrowers to complete in order to apply for loan forgiveness under the Paycheck Protection Program (PPP)[1] to conform with the changes to the PPP pursuant to the Paycheck Protection Program Flexibility…
[UPDATED] Paycheck Protection Program Flexibility Act: Major Changes to the PPP
By Nirav Bhatt & Bijal Vira
[Update: This is an updated version of an article published on June 5, 2020]
On June 5, 2020, the U.S. President signed into law the Paycheck Protection Program Flexibility Act (PPP Flexibility Act or Act) to provide businesses with greater flexibility and more time to maximize forgiveness of loans received under the Paycheck Protection Program…
Paycheck Protection Program Flexibility Act: Major Changes to the PPP
By Nirav Bhatt & Bijal Vira
On June 5, 2020, the U.S. President signed into law the Paycheck Protection Program Flexibility Act (PPP Flexibility Act or Act) to provide businesses with greater flexibility and more time to maximize forgiveness of loans received under the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (as amended,…
Fed Provides Further Updates to Main Street Lending Program, Expanding Availability in Advance of Program Launch
On June 8, 2020, the Federal Reserve Bank of Boston, the administrator of the Federal Reserve’s Main Street Lending Program, released updated term sheets for the three types of loans, “New,” “Priority” and “Expanded,” that will be available under Main Street as well as an updated extensive Frequently Asked Questions (FAQ) (https://www.federalreserve.gov/monetarypolicy/mainstreetlending.htm). The…
Paycheck Protection Program: Loan Forgiveness Estimator Workbook
Below please find a link to the Sheppard, Mullin, Richter & Hampton LLP (Sheppard Mullin) Paycheck Protection Program (PPP) Loan Forgiveness Estimator Workbook (the Workbook), which was created by and is the property of Sheppard Mullin.
The Workbook is intended to help both PPP loan borrowers and those considering taking out a PPP loan better…
Paycheck Protection Program: Key Features of the Loan Forgiveness Application
By Bijal Vira & Nirav Bhatt
On May 15, 2020, the U.S. Department of Treasury (Treasury) and U.S. Small Business Administration (SBA) issued the Loan Forgiveness Application for borrowers to complete in order to apply for loan forgiveness under the Paycheck Protection Program Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (as amended, supplemented…
Paycheck Protection Program: SBA Issues Further Guidance on its Review of the Economic Uncertainty Certification made by PPP Borrowers
By Nirav Bhatt & Bijal Vira
On May 13, 2020, the U.S. Department of Treasury (Treasury) and U.S. Small Business Administration (SBA) issued an updated Frequently Asked Questions fact sheet (FAQ)[1], which provides interpretative guidance on the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).[2]
As background, prior…
Update on the Paycheck Protection Program Liquidity Facility
On Thursday April 30, 2020, the Board of Governors of the Federal Reserve Board released a new revised term sheet for the Paycheck Protection Program Liquidity Facility (“PPPLF”). Under the facility, the Federal Reserve Banks will lend to eligible borrowers on a nonrecourse basis, taking loans to small businesses guaranteed by the Small Business Administration…
Paycheck Protection Program: SBA Extends Prepayment Safe Harbor To May 14, 2020 and Issues Further Interpretive Guidance on Employee Head Count and Affiliation
By Nirav Bhatt & Bijal Vira
The U.S. Department of Treasury (Treasury) and U.S. Small Business Administration (SBA) issued further interpretative guidance on the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), via (i) an updated Frequently Asked Questions fact sheet (FAQ)[1], which was last published on May 6,…