Resources

Client Alerts, News Articles, Blog Posts, & Multimedia

Everything you need to know about BMD and the industry.

Update: President Trump Signs Paycheck Protection Program Flexibility Act of 2020

Client Alert
June 4, 2020

Update: Today President Trump signed into law the Paycheck Protection Program Flexibility Act of 2020 ("FA"). The House passed the law on May 27 and the Senate approved on June 3. The legislation provides more flexibility to small businesses who received loans under the Paycheck Protection Program (“PPP”).

Maturity of PPP Loans

To start, the FA establishes that all PPP loans granted after the enactment of the FA will carry a 5-year minimum maturity term. For already existing loans, the FA allows for lenders and borrowers to mutually agree to modify the 2-year maturity term of the existing loan and implement the new 5-year minimum.

Extended Covered Period

Further, the FA extends the deadline to apply for a PPP loan to December 31, 2020. The covered period for which PPP loan recipients may spend the loan is also extended. Originally, small businesses had 8 weeks to spend the PPP loan money. Under the FA, small businesses may spend the PPP loan money during a 24-week period or until December 31, 2020, whichever occurs first. A business that has received a loan prior to the enactment of the FA may elect to spend their loan within the 8-week spending period that coincides with origination of their loan or extend it through the new 24-week covered period.

Payroll vs Nonpayroll Uses

Prior to the FA, recipients of a PPP loan were required to use 75% or more of the loan on payroll expenses in order to be eligible for loan forgiveness. The FA reduces that amount and requires recipients to spend at least 60% of the loan amount on payroll expenses in order to be eligible for loan forgiveness. This allows a recipient of a PPP loan to use up to 40% of the loan amount on non-payroll expenses like mortgage, rent, and utility payments.

Full-Time Equivalent Safe Harbor

The PPP requires loan recipients to restore its full-time employee count or employee wages to its February 15, 2020 level by June 30, 2020 in order to receive the full amount of loan forgiveness. Because many businesses are still facing difficulties in restoring operations to their February 15, 2020 levels, the FA extended the date to restore the loan recipient’s full-time employee count or employee wages to December 31, 2020.

Further, the FA provides a new exemption from a proportional reduction of loan forgiveness due to a reduction in full-time employees. This exemption is conditioned on the PPP loan recipient documenting, in good faith, one of the following two findings. First, a loan recipient can document an inability to rehire individuals who were employees on February 15, 2020 and document an inability to hire similarly qualified employees for unfilled positions by December 31, 2020. Second, a loan recipient can document:

“an inability to return to the same level of business activity as such business was operating at before February 15, 2020, due to compliance with requirements established or guidance issued by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration during the period beginning on March 1, 2020, and ending December 31, 2020, related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID–19.”

Extended Deferral Period

Under the initial CARES Act, a deferral period of not less than six months and no more than one year was allowed for loan payments of principal and interest. Under the FA, the deferral of payments of principle and interest extends until the lender receives the total forgiveness amount of the loan, which is determined by the CARES Act. Additionally, if a PPP loan recipient fails to apply for forgiveness of the loan, then the recipient must begin payments of interest and principle within 10 months of the end of the newly established 24-week covered period.

It is anticipated that President Trump will sign the FA into law but, until then, the CARES Act and the PPP remain in effect leaving the above-mentioned changes unimplemented.

For questions regarding the Paycheck Protection Program Flexibility Act of 2020, please contact your primary BMD attorney.

PPPPaycheck Protection Program Flexibility Act of 2020CARES Actloan forgivenessextended deferral periodsafe harborBMD SBA Loan Team
Client Alert

Now in Effect: DOL Final Rule on Classification of Independent Contractors

March 21, 2024Effective March 11, 2024, the U.S. Department of Labor (DOL) has adopted a new standard for the classification of employees versus independent contractors — a much anticipated update since the DOL issued its Final Rule on January 9, 2024, as previously discussed by BMD.  In brief, the Fair Labor Standards Act (FLSA) creates significant protections for workers related to minimum wage, overtime pay, and record-keeping requirements. That said, such protection only exists for employees. This can incentivize entities to classify workers as independent contractors; however, misclassification is risky and can be costly.Client Alert

Florida's Recent Ruling on Arbitration Clauses

March 15, 2024Florida’s recent ruling on arbitration clauses provides a crucial distinction in determining whether such clauses are void as against public policy and providers may have the opportunity to include arbitration clauses in their patient consent forms. On March 6, 2024, Florida’s Fourth District Court of Appeals reversed and remanded Florida’s Fifteenth Circuit Court ruling of Piero Palacios v. Sharnice Lawson. The Court of Appeals ruled that the parties’ arbitration agreement did not contradict the Legislature’s intent of Florida’s Medical Malpractice Act (the “MMA”), but rather reflects the parties’ choice to arbitrate claims entirely outside of the MMA’s framework. Therefore, the Court found that the agreement was not void as against public policy.Client Alert

Corporate Transparency Act Update 3/14/24

March 14, 2024On March 1, 2024, a federal district court in the Northern District of Alabama concluded that the Corporate Transparency Act (“CTA”) exceeded Congressional powers and enjoined the Department of the Treasury from enforcing the CTA against the plaintiffs. National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.). On March 11, 2024, the U.S. Department of Justice appealed the district court’s decision to the Eleventh Circuit Court of Appeals.Client Alert

The Ohio State University Launches Its Accelerated Bachelor of Science in Nursing Program

February 27, 2024In response to Ohio’s nursing shortage, The Ohio State University College of Nursing is accepting applications for its new Accelerated Bachelor of Science in Nursing program (aBSN). Created for students with a bachelor’s degree in non-nursing fields, the aBSN allows such students to obtain their nursing degree within 18 months. All aBSN students will participate in high-quality coursework and gain valuable clinical experience. Upon completion of the program, graduates will be eligible to take the State Board, National Council of Licensure Exam for Registered Nursing (NCLEX-RN).Client Alert

Another Transparency Obligation: The FinCEN Beneficial Ownership Information Reporting Requirements

February 26, 2024Many physician practices and healthcare businesses are facing a new set of federal transparency requirements that require action now. The U.S. Department of Treasury Financial Crimes Enforcement Network (“FinCEN”) Beneficial Ownership Information Reporting Requirements (the “Rule”), which was promulgated pursuant to the 2021 bipartisan Corporate Transparency Act, is intended to help curb illegal finance and other impermissible activity in the United States.
Older posts
Newer posts