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April 4, 2020

By Benjamin E. Olive, Kristy E. Armada, Stephen V. Hoffman and Christian A. Peterson

On Friday, March 27, 2020 Phase III of the CARES Act was passed.  This economic relief package was enacted in response to the COVID-19 pandemic and is intended to provide economic support to businesses, employees, individuals and families at the Federal level.  On April 3, 2020, lenders started taking applications for the Payroll Protection Program from borrowers.  Olive Judd, P.A. has already assisted clients with submitting these applications in order to maximize their loan amounts.  Olive Judd, P.A. is advising businesses and individuals on how the CARES Act programs can help them during the COVID-19 crisis.

The following is a brief description of the programs available.  Our attorneys are available to help you determine which programs are the best fit to assist you.

Payroll Protection Program (PPP)

Under the PPP, eligible recipients may qualify for a loan equal to 2.5 times their average monthly payroll up to $10 million.  The loan proceeds are to be used for payroll, rent or interest on mortgage payments, utilities and certain other qualified expenses.  The primary purpose of the PPP is to keep your business solvent and get money into the pockets of your employees so that they can keep up with their obligations. The most important feature of the PPP is that by maintaining your workforce and pay levels, SBA will forgive the portion of the loan proceeds that are used to cover the first 8 weeks of payroll and certain other expenses following the loan origination. Additionally, payments on any unforgiven portion of the loan may be deferred for six months and at 0.5% annual interest rate.

Although the PPP is administered by the SBA, the loans will be issued by SBA certified banks.  Many banks will service applications for the PPP only from applicants who have a pre-existing banking relationship.  SBA lenders may start taking applications on April 3, 2020.  Demand for these loans will be extremely heavy and businesses can expect delays as details with the loan process will change frequently.

Economic Injury Disaster Loans and Loan Advance (EIDL)

The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. Small business owners are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. The loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application, and pursuant to the SBA website, this $10,000 loan advance will not have to be repaid.

SBA Debt Relief

The SBA Debt Relief program will provide a reprieve to small businesses as they overcome the challenges created by this health crisis. Under this program, the SBA will also pay the principal and interest of new SBA 7(a) loans issued prior to September 27, 2020 for a period of six months.

SBA Express Bridge Loans

Express Bridge Loan Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 with less paperwork. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loan or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. If a small business has an urgent need for cash while waiting for decision and disbursement on Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan. The SBA has promised a fast turnaround upon successful application, and these loans may be repaid in full or in part by proceeds from the EIDL loan.

Olive Judd’S Role

We cannot charge you a fee for assisting with the filing of the application for a PPP loans.  Any agent fee is required to be paid by your lender.

As we experienced during the financial crisis of 2008, SBA lenders will be inundated with questions and loan applications.  Unfortunately, this can lead to improper information and even lost applications.  Over the years, the lawyers at Olive & Judd, P.A. have assisted clients with the closing of numerous SBA loans.  Our experience in working with lenders during the financial crisis of 2008 provides unique insight as to how lenders deal with voluminous applications.  Our firm is well positioned to advise on loan eligibility, assist in the highest calculation of loan eligibility, manage the collection and submission of required documents, review loan documents and walk clients through the entire process through closing.  Furthermore, our firm’s assistance does not stop when the funds are disbursed.  We are here to guide our clients to strategically use the loan proceeds in a manner that maximizes the loan forgiveness, while ensuring that all documentation required for the forgiveness is maintained and timely submitted.

Accordingly, it is especially important to seek the assistance and guidance of an experienced attorney to navigate these loan programs in order to maximize the amount of the loan and then ensure the maximum amount of the loan is forgiven.  The lawyers at Olive Judd, P.A. are familiar with, and understand, what is required to obtain such loans. Further, we understand your need for the relief.

About the Authors:

Benjamin E. Olive is the founding shareholder and managing partner of Olive Judd, P.A., concentrating his practice in the areas of complex commercial litigation, business and real estate related litigation, class action defense, and labor and employment defense.  Kristy E. Armada is a business litigation and employment Partner at Olive Judd, P.A. who helps businesses identify and address the legal issues that are involved in the decisions that they make every day.  Stephen V. Hoffman is a Partner at Olive Judd, P.A. heading the Firm’s Real Estate Practice Group and having 35 years of experience in assisting clients with land use and zoning matters, commercial and residential transactions and drafting condominium and homeowner association documents.  Christian A. Petersen is Partner at Olive Judd handling complex commercial and construction litigation, contract and business disputes, real estate litigation, and representation of creditors in bankruptcy and insolvency proceedings.