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This guidance reviews several of the more significant provisions of the PPP Frequently Asked Questions issued Monday, April 6, 2020. Lender’s responsibility with respect to borrower’s payroll calculation (Question 1) The FAQ confirms that lenders are not required to recalculate every aspect of borrower’s payroll cost calculation. Lenders will be protected provided that they “perform a good faith review, in reasonable time, of borrower’s calculations.” The level of investigation by the lender should be determined based upon the quality of documentation submitted by the borrower. We believe that reports, forms and other information filed with a governmental agency (IRS, State) would carry the most weight in this regard.

The Small Business Administration last night (Thursday, April 2, 2020) issued an interim final rule that provides additional implementation guidelines and requirements for its Paycheck Protection Program to aid small businesses hit hard by the COVID-19 crisis.

The SBA has issued limited guidance for borrowers and lenders implementing provisions of the Paycheck Protection Program (PPP) as recently enacted. This alert summarizes that guidance. The guidance includes a much-anticipated application form. Applicants are instructed to complete the form and return it to their chosen lender. The form includes basic information that any lender would request, in addition to certifications specific to the Paycheck Protection Program as well as any SBA guaranteed loan.

The recently enacted Coronavirus Aid, Relief, and Economic Security Act (CARES Act) creates an SBA loan program focused on supporting funding of payroll and other operating costs for small businesses – referred to as the Paycheck Protection Program.  These loans may be forgiven if certain criteria are satisfied.   The CARES Act authorizes the SBA to extend lending authority under the program to any financial institution that has the ability to “process, close, disburse and service loans”, meaning that even non-SBA lenders will have the opportunity to originate these loans for their customers.

The Small Business Reorganization Act (SBRA) took place on Wednesday, February 19, 2020, marking one of the most significant changes in bankruptcy law since 2005. The SBRA attempts to create a simplified and expedited process for small business debtors to propose, confirm and complete a plan of reorganization.

Attorney Robert T. Smith recently attended the Bank Director “Acquire or Be Acquired” Conference in Scottsdale, Arizona. With a multitude of issues discussed, three issues were the main topic of the conference: Low-cost deposits, IT Costs and succession planning.

Late last year the FDIC, the Federal Reserve and the OCC finalized regulations on High Volatility Commercial Real Estate (HVCRE) first proposed in 2018. The final rule conforms the regulatory definition of HVCRE exposure to the statutory definition implemented under section 214 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) effective May 24, 2018.