PPP Loan Forgiveness Application Now Available

Marcia Swihart Orgill

By Marcia Swihart Orgill



Updated 7/6/2020

The Small Business Administration (SBA) and the Department of Treasury have released the Paycheck Protection Program (PPP) Loan Forgiveness Application.

The application deadline for the Paycheck Protection Program has been extended to August 8, 2020. Updated loan forgiveness instructions and forms are available here:

PPP Loan Forgiveness Application Instructions for Borrowers

PPP Loan Forgiveness Application Form – Revised June 16, 2020

Self-Employed: Continue reading »

Safe Harbor Deadline for Repayment of PPP Loans Extended from May 14 to May 18

Marcia Swihart Orgill

By Marcia Swihart Orgill



On May 13, 2020, the Small Business Administration (SBA), in consultation with the Department of the Treasury, extended the safe harbor deadline to repay Paycheck Protection Program (PPP) loans to May 18, 2020. Previously in its PPP Loans Frequently Asked Questions (FAQs), the SBA reminded borrowers to carefully review the required certification on the PPP loan application that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”

ppp loanIn further guidance, the SBA provided that any borrower of a PPP loan that repays the loan in full by the specified safe harbor deadline will be deemed by the SBA to have made the required certification concerning the necessity of the loan request in good faith.  According to the newly issued FAQ #47, Continue reading »

Additional SBA Guidance Regarding PPP Loan Business Necessity Certification and New Safe Harbor for PPP Loans of Less than $2 Million

Marcia Swihart Orgill

By Marcia Swihart Orgill



The Small Business Administration (SBA), in consultation with the Department of Treasury,  announced additional guidance regarding the required good faith certification borrowers must make concerning the necessity of the Paycheck Protection Program (PPP) loan request. In PPP loan applications, borrowers must certify in good faith that current economic uncertainty makes the loan request necessary to support their ongoing operations.

ppp loan

In an update to its PPP Loan Frequently Asked Questions (FAQs) on May 13, the SBA provides a new safe harbor for any borrower that, together with its affiliates, received a PPP loan of an original principal amount of less than $2 million. These borrowers will be deemed to have made the required certification concerning the necessity of the loan request in good faith.

As previously announced by the SBA, borrowers with PPP loans in the amount of $2 million or more, and other designated PPP loans, are subject to review by the SBA for compliance with the requirements of the PPP Interim Final Rules and the Borrower Application. According to Question 46 of the updated FAQs, Continue reading »

Safe Harbor Deadline for Ineligible Borrowers to Return Paycheck Protection Program Loans is Extended to May 14

Marcia Swihart Orgill

By Marcia Swihart Orgill



ppp loanUPDATED 5/6/2020

The Small Business Administration (SBA), in consultation with the U.S. Treasury,  published retroactive guidance regarding the loan necessity certification a borrower must make on its application for a Paycheck Protection Program (“PPP”) loan.

In its update to the list of Frequently Asked Questions (FAQs) about PPP loans issued on April 23, the SBA explained that prior to making an application for a PPP loan “all borrowers should carefully review the required certification that ‘[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.’” In making this good faith certification, the Treasury stated that all borrowers must take “into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operation in a manner that is not significantly detrimental to the business.”

Although the SBA guidance specifically questions loans made to public companies with substantial market value and access to capital markets, the guidance applies to both public and private companies.

The generality of the SBA guidance left many borrowers confused. There were news articles published about small businesses that were concerned about expending PPP loan funds despite perceived operational needs.  In a likely response to this confusion, the SBA updated its FAQs about PPP loans on May 5, indicating that it was going to provide additional guidance regarding how it would review the business certainty certification.  Additionally, the FAQ update provides that a borrower will be deemed to have made the business necessity certification in good faith if the borrower applied for the PPP loan prior to the issuance of the FAQ and repays the loan in full by May 14, 2020. The original safe harbor repayment deadline way May 7. Continue reading »

Non-deductibility of Expenses Paid with Forgiven Paycheck Protection Program Loans

Marcia Swihart Orgill

By Marcia Swihart Orgill



tax deduction

According to new guidance issued by the IRS in Notice 2020-32, no deduction is allowed for otherwise deductible expenses if they are paid with PPP loan funds that are forgiven and the income associated with the forgiveness is excluded from the taxpayer’s income. The basis for the IRS’ disallowance of the tax deduction for such expenses is Internal Revenue Code (IRC) Section 265(a).

IRC Section 265(a) provides that a deduction is not allowed for any amount otherwise deductible that is allocated to one more classes of income which are wholly exempt from income taxes. The IRS ruled that the CARES Act’s exclusion from income of forgiven PPP loan amounts results in a “class of exempt income” under Section 1.265-1(b)(1) of the Treasury Regulation. Therefore, the payment of such expenses is non-deductible from income because such payment is allocable to tax exempt income. Continue reading »

Bankruptcy and Workouts After the CARES Act

A. Thomas DeWoskin

By A. Thomas DeWoskin



As the COVID-19 crisis deepens, it is getting even more difficult for small business owners to plan for the future. It now appears likely that the crisis will not simply end – it will ebb and flow in waves for quite a while, yet another variable for small business owners to consider for an extremely uncertain future.

Despite the payroll protection program and all of the other government support programs being enacted in an effort to support the economy[1], it is a virtual certainty that hundreds of thousands of small businesses will need to file Chapter 11 bankruptcy reorganizations or enter into out of court workout agreements with their creditors during the next few years.

Several changes to a debtor’s ability to survive this chaos have occurred in recent months:

  • The enactment of Subchapter V of Chapter 11 of the Bankruptcy Code;
  • The enactment of the CARES Act; and
  • The practical results of so many businesses teetering on the brink of failure.

Before getting into the details, I am repeating my basic plea to all small business owners facing potential troubles. PLEASE: Continue reading »

What You Need to Know About Your PPP Loan

Hannah E. Mudd

By Hannah E. Mudd



As you are aware, the Paycheck Protection Program (“PPP”) was developed as a relief measure under the CARES Act. Unsurprisingly, the initial round of PPP funding was  fully claimed by businesses across the country. Congress passed a bill providing additional funding for PPP loans. If you previously applied for either loan, you may not need to re-apply. For more information, click here.

If you are one of the fortunate businesses to secure funding, you may be wondering – now what? Whether it be how you may use those funds or ensuring you receive maximum loan forgiveness, here’s what you need to know for your business.

Fortunately, the SBA anticipated these questions and provided some clarifying guidance for business owners. One of the most important clarifications is that no more than 25% of a PPP loan can be used for non-payroll costs if the business wants to be eligible for complete loan forgiveness. They also clarified that any interest which accrues before the loan is officially forgiven or paid in full must be repaid at the borrower’s expense. Additionally, full forgiveness will not be available if you reduce the number of full-time equivalent employees (“FTE”s) during the 8-week loan period or reduce the pay of an employee making less than $100,000 by more than 25%.

The SBA also clarified that your lender will be the one to actually determine the amount of the loan that is deemed forgivable and will have 60 days to approve or deny the forgiveness once they receive your business’ request and relevant documentation. What exactly will be required by your particular lender to demonstrate proper usage of loan proceeds and ensure maximum loan forgiveness is still unclear.

What to Track and Monitor for PPP Loan Forgiveness

We recommend creating a method to track, record, and document anything at all PPP or expense-related for the next several months.

Additionally, the following are several things to specifically monitor and keep inside this ‘file’ that will make your request for forgiveness much easier and streamlined.

1. Implications from other CARES Act Provisions. Depending on your business’ situation, you may have qualified for, and received, alternative relief under another provision of the CARES Act. You will want to evaluate the timing implications these alternatives may have on your PPP loan forgiveness before using any of the funds. Continue reading »

Thoughts for Business Owners Trying to Run a Business During a Pandemic

A. Thomas DeWoskin

By A. Thomas DeWoskin



Who would have thought we’d be in a situation like this? This is the 21st century, not the Middle Ages. The need for action is certain, but the need for panic is not. In fact, panic makes the matter worse for all concerned.

On the personal front, take care of yourself first. You need to have your wits about you at a time like this.

  • Keep your mind busy with something other than worry. If you have a hobby, now is a good time to engage in it. Read a book; write a letter; call your mother. If working 80 hours a week has limited time with your kids, spend some time with them now. Just speak to them with open-ended questions. Find out what’s on their minds. Do something together.
  • Help someone else – you’ll feel good about it.
  • We’ve all heard the saying that every problem is an opportunity. One of the best ways to stay calm is to do something. You can’t sit and fret your way out of this.

On the business front, now is a great time to analyze your situation, both short- and long-term.

Continue reading »

Updated COVID-19 Recovery and Reopening Orders: St. Louis City, St. Louis County, Missouri, Outstate Missouri Areas, and Illinois

Ruth Binger

By Ruth Binger



UPDATED 11/18/2020

Review the links below for guidelines for reopening your business based on your location. If you have any questions, one of our employment attorneys can assist you.

Additional Resources:

COVID-19 ORDERS AND INFORMATION

State of Missouri
St. Louis Metro Area

St. Louis County

City of St. Louis

St. Charles County

Franklin County

Jefferson County

Lincoln County

Warren County

Other Missouri City and County Orders

Continue reading »

New Benefits for Those in Financial Difficulty: The Small Business Reorganization Act of 2019

A. Thomas DeWoskin

By A. Thomas DeWoskin



If you own a small business (defined as one owing less than $2,725,625 in total debt) and are in or nearing financial difficulties, you should contact your attorney to learn more about The Small Business Reorganization Act of 2019 (the Act).

Effective in February 2020, this new addition to Chapter 11 of the U.S. Bankruptcy Code provides the benefits of a traditional Chapter 11 case, but with fewer burdens and more flexibility.

For instance:

  • There will be no creditors’ committee to deal with (unless the court orders otherwise).
  • A trustee will be appointed instead. This may be a mixed benefit.
    • On one hand, a good trustee might be able to help keep the case moving, negotiate a consensual plan of reorganization, object to claims, and take other burdens off the debtor.
    • On the other hand, a bad trustee might misuse his/her powers and make things worse for the debtor.
    • In either case, the debtor will pay the trustee on a percentage basis, generally under 5% of debtor’s quarterly revenues.
  • A status conference must be held within 60 days after the commencement of the case to further a prompt and economical resolution of the various issues involved.
  • No disclosure statement will be required, saving both time and attorney fees in the process.
  • Only the debtor may file a plan; creditors may not.
  • It is somewhat easier to “cram down” the terms of the plan on objecting creditors.
  • The Absolute Priority Rule is essentially eliminated, making it easier for owners to retain their ownership in the debtor.
  • Confirmation standards are relaxed, making it easier to get your reorganization approved.

Continue reading »