PPP Loans Reopened to Aid Small Businesses: Changes to Application, Terms, and Covered Expenses

The Paycheck Protection Program (PPP) has reopened to aid small businesses. The “Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act” (“Economic Aid Act”) makes several changes to the prior PPP rules that affect all PPP loans and enacts new rules for any new and additional PPP loan funding provided under the Economic Aid Act.

Through the Economic Aid Act, $284.45 billon was authorized for first-draw and second-draw PPP loans with several set-asides for underserved communities. Applications for these extended PPP loans are available until March 31, 2021. In addition to the information below, for further details about the PPP created by the CARES Act and rules that remain in effect, see our prior article here.

First-Draw PPP Loans Under the Economic Aid Act

Those seeking a PPP loan for the first time who thought they missed the deadline under the CARES Act  have not lost their opportunity. Thanks to the Economic Aid Act, borrowers who did not receive a PPP loan (under the CARES Act) and meet the requirements may still apply for a PPP loan.

Eligible Entities

1. Those with 500 or fewer employees that previously would have been eligible for a PPP loan are still eligible if they were operating as of February 15, 2020 and paid salaries and payroll taxes for employees or independent contractors.
2. Entities with more than 500 employees in certain entities that meet SBA alternative size standards are eligible.
3. The following entities are now expressly eligible for PPP loans under the Economic Aid Act as well:

Continue reading »

COVID-19 Vaccines and the Workforce – Mandatory or Encouraged?

Getting back to normal in the next year or so may be impossible without the widespread use of COVID-19 vaccines. Although authorities do not anticipate the vaccines will be widely available until Spring 2021, employers should be considering whether to mandate or merely encourage vaccinations in the workforce.

Currently there is no definitive answer regarding mandatory vaccinations, and your plan will depend on many variables. Because this is the first pandemic in our memory and it is all new to us, consider forming a committee to monitor the status of laws, regulations, and guidance from various agencies.

Your business may be one of the lucky ones that navigated the pandemic without causing a loss of morale or culture, operating safely by working remotely, social distancing, wearing masks, and following CDC requirements. If so, setting aside all other factors, you may simply want to encourage vaccinations for the first few months that they are available, especially given potential concerns about the safety and efficacy of the vaccines and the ever-changing laws. You could do this by training and educating employees as to the efficacy of the vaccine, encouraging participation, and offering the vaccine for free (if not covered by insurance) at the workplace during work hours. Continue reading »

Accumulating Cash and Improving Your Business’ Cash Flow

Part 2 of a 5-part series: Options for Small Business Owners in Financial Distress

Cash is how your business likely will get through its difficulties. Simply put, obtain as much cash as you can, and spend it sparingly.

In Part 1 of this five-part series on options for small business owners in financial distress, I suggested some ideas about improving the operation of your small business in order to survive different types of disasters. In Part 2, I’ll share some thoughts on improving your cash position and cash flow.

First, look at your business as a source of cash.

• Account receivables: Contact your customers with outstanding account receivables and encourage them to make payment. Provide discounts for prompt payment and charge interest on past due amounts if you can.
• Line of credit: If you have unused room on a line of credit, draw on it now while you still can. If things get bad enough, your lender might freeze your line and cut off further draws.
• Business loan: If you need to approach a lender for a new loan or an increase in an existing one, do your homework. No lender is going to give you money just because you ask for it.
• Business plan: Prepare a business plan or update your current plan to reflect current conditions. You may need help from your accountant, attorney, consultant or similar outside sources in order to do so. Your plan may include both a “needs” list and a “wants” list.
• How much? Determine how much money you need to implement your plan whether your business plan is to simply tread water, grow, or pivot in another direction. Break it down so your potential lender understands how it is going to save your business.
• How to pay it back? Once you have a rough number, consider how you’re going to repay it. Your business’ survival depends in part on its ability to pay its debts. Consider both the amount and duration of the likely payments.
• Avoid “hard money” lenders: When looking for lenders, be very careful to avoid “hard money” lenders and their draconian interest rates and repayment schedules. These can include factoring companies who purchase your receivables, MCA lenders who say they are “purchasing” your accounts receivable but in reality are lending against them, and other types of lenders with outrageous interest rates and impossible repayment terms.

Continue reading »

$5,000 Grants Available to Restaurants and Small Businesses in St. Louis County

In response to the tightening of COVID-19 restrictions for restaurants and some other small businesses, St. Louis County Executive Sam Page announced $5,000 grants through the Small Business Rapid Deployment Fund.

Grants can be used for operating expenses or business costs (e.g., rent and payroll) and purchases needed to adapt to COVID-19 restrictions (e.g., heaters and tents) “incurred between April 1 and December 16, 2020 as a direct result of COVID-19.”

According to the fund’s website, restaurants and small businesses must meet the several eligibility requirements including: Continue reading »

Your Small Business: Getting Through the Economic Turbulence

Part 1 of a 5-part series: Options for Small Business Owners in Financial Distress

Suppose your small business has been doing fairly well over the last few months in spite of COVID-19 and the many other factors affecting our economy. However, you are worried about the upcoming change of seasons, additional shutdown orders, or other circumstances which might adversely affect it.

Or suppose you expect to do well over the holidays even in the face of (or because of) the pandemic, but dread your normally slow months of January, February, and March.

Or suppose you recently undertook a large project which fell apart and left you owing a ton of money.

Different situations require different responses.

Specific Event

If a specific event led to your problems, but your business is otherwise profitable, you may be able to work out of them.

Equipment Problems

Imagine that your business was doing so well that you bought additional equipment and hired additional employees in order to meet the demand.

Unfortunately, your new equipment didn’t work as promised. Rather than the promised six weeks, the new equipment took a year to get up and running smoothly. In addition to failing to fulfill all of your orders during this time, you paid employees overtime to produce as much as they could despite the distractions caused by the equipment problems. Continue reading »

Options for Small Business Owners in Financial Distress: A 5-Part Series

Many small business owners are suffering financially due to the effects of COVID-19 and the unpredictable, rapidly changing economy in general. In this five-part series, we will discuss the various options available to small businesses in financial trouble, all the way from working out obligations informally to Chapter 11 reorganization to going out of business.

The series will cover the following issues:

• Introduction: Options for Small Business Owners in Financial Distress: A 5-Part Series
• Part 1: Your Small Business: The Economic Turbulence – Analyzing and improving your business operations
• Part 2: Accumulating Cash and Improving Your Business’ Cash Flow – Analyzing and improving the business’ flow, as well as obtaining additional financing if necessary
• Part 3: Non-Bankruptcy Ideas for Helping Your Troubled Small Business –  Ideas on using non-bankruptcy options in an effort to restructure your debts
• Part 4: Bankruptcy Options for Your Troubled Small Business – Pros and cons of various types of bankruptcy
• Part 5.1. Getting Through Chapter 11 – Part One: After Filing – Getting through a bankruptcy case and coming out on the other side
• Part 5.2: Getting Through Chapter 11 – Part Two: Plan of Reorganization – Putting together your plan for reorganization and confirmation by the bankruptcy court

Continue reading »

Keeping Your Business in Business During COVID-19: On-Demand Webinar

co-presented by Katherine M. Flett and Ruth Binger

Ruth Binger and Katherine Flett presented a webinar on keeping your business in business, which included employment and business strategies during the pandemic.

“Maintaining a Legally Compliant Work Environment and Navigating the ‘New’ Workplace in the Face of COVID-19,” a Facebook Live webinar, was part of the Greater St. Charles County Chamber of Commerce‘s Chamber University.

Topics included: Continue reading »

Getting Back to Work: OSHA Guidance for Non-Essential Businesses

OSHA has released new guidelines for reopening to help non-essential businesses ensure the safety and health of their employees and customers from the spread of COVID-19.

This new guidance supplements Guidance on Preparing Workplaces for COVID-19 from the U.S. Department of Labor and U.S. Department of Health and Human Services and Guidelines for Opening up America Again from the White House.

Under the new OSHA guidelines, businesses should establish reopening policies and procedures in the following areas: Continue reading »

Employers Must Report Work-related COVID-19 Cases to OSHA

Under new guidelines from OSHA, employers must record all work-related COVID-19 cases that meet the following three conditions:

1. The case is confirmed as COVID-19 as defined by the CDC.
2. The case is determined to be work-related.
3. The case results in any of the following:
   1. Death
   2. Significant injury or illness diagnosed by a medical professional
   3. Days away from work
   4. Restricted work or transfer to another job
   5. Medical treatment beyond first aid
   6. Loss of consciousness.

In addition, per the new guidelines: Continue reading »

UPDATE: Salaries Speak Louder than Words

Equal Pay Day was celebrated this month on April 2, 2019. This date symbolizes how far into the year women must work to earn what men earned in the previous year. Thankfully, this date is not stationary. In fact, the date occurs seventeen days earlier than it did in 2005. While there is a lot to celebrate with that achievement, there is still a long way to go to completely close the gender wage gap.

In fact, the Supreme Court recently faced the opportunity to potentially close this wage gap even further when it granted cert to Rizo v. Yovino. See Katherine Flett’s blog post titled “Salaries Speak Louder than Words” for more discussion on the case. In Rizo, the Ninth Circuit sitting en banc found that the use of salary history to establish a starting salary violated the Equal Pay Act, as it perpetuated the discriminatory nature of women historically being underpaid in almost all sectors of employment. Thus, reliance on prior pay could no longer be considered as an affirmative defense under the Act’s fourth catchall exception, “any other factor other than sex.” Continue reading »