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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

  • work Practice Area

    Banking and Finance

Date & Time
  • event Date

    Wednesday, February 24, 2021

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00

This CLE course will discuss PPP lending as recently revised and expanded under the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the New PPP Act or the Act). Panel discussion will include the new eligibility requirements and lending parameters, procedures for existing PPP borrowers to obtain second draws, and tax treatment of expenses paid with PPP loans.

Faculty

Macdonald Ralph
Shareholder
Jones Day

Mr. MacDonald is a financial services lawyer who focuses on M&As, public and private securities, governance, and policy issues for clients engaged in this industry. Since 1979, he has helped domestic and international clients including bank holding companies, banks, investment banks, broker-dealers, investment managers, and fintech companies. He advises senior management and boards of directors. Mr. MacDonald also provides strategic and transaction guidance, including evolving areas such as regulatory relief and financial services policy. A growing area is the fintech industry, particularly its regulation and relationships with state, federal, and foreign regulators and traditional financial services companies. Clients range from global banks such as Citibank and BNP to regional and community banks. He often advises commercial businesses with respect to relationships and services with their financial services providers. Mr. MacDonald advises clients frequently regarding financial services M&As, asset and liability transactions, public and private securities offerings, Volcker Rule, investments and risk management, and bank, trust company, credit card, fintech, and other financial services charters.

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Colom Kiamesha-Sylvia
Shareholder
Taft Stettinius & Hollister LLP

Ms. Colom focuses her practice in the areas of real estate transactions (acquisitions, dispositions, development, leasing, sale leaseback transactions, and real estate municipality work), real estate lending and commercial finance transactions, and related business transactions. She helps developers, corporate real estate departments, municipalities, tenants, and landlords achieve their real estate goals related to development projects, drafting and negotiating of lease documents, negotiating transfer documents, and ultimately getting the deal done. Ms. Colom has closed numerous SBA, USDA, and conventional commercial loans for commercial lenders and borrowers related to real estate, equipment, machinery, and C&I lending. Her extensive base of knowledge covers an array of commercial loan types, including government guaranteed lending, asset-based line of credits, term loans, real estate transactions, and construction loans. Ms. Colom is Chair of the firm’s SBA Task Force, and a member of both Taft's CARES Act Title IV Task Force and Inclusion Task Force.

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Description

The New PPP Act, signed into law Dec. 27, 2020, makes significant changes to the Payment Protection Program (PPP). The new legislation appropriates an additional $284.45 billion for initial and "second draw" PPP loans applied for by Mar. 31, 2021. It also makes significant changes in lending parameters, borrower eligibility, loan forgiveness, and tax-deductibility of expenses, which should be closely examined by finance counsel.

PPP borrowers with 300 or fewer employees and 25 percent or more in reduced gross receipts from 2019 to 2020 in any calendar quarter may apply for a "second draw" PPP loan of up to the lesser of $2,000,000 and 2.5 times (3.5 for some borrowers) their monthly payroll costs. The SBA's affiliation rules will be applied on the same basis as the initial loan.

Interim final rules released by the SBA on Jan. 6, 2021, provide specifics on new types of businesses that may obtain PPP loans and some that are no longer eligible. They also guide borrowers who returned previous PPP loans to apply for loans and lender underwriting responsibilities concerning initial and second draw loans made under the Act.

Loan forgiveness provisions have also been revised. Eligible costs now include covered operations expenditures, covered property damage costs, covered supplier costs, and covered worker protection expenditures. Expenses properly paid from PPP loan proceeds are now tax-deductible. For loans of $150,000 or less, the Act provides a streamlined, one-page application that includes a certification that the borrower has complied with the PPP.

Listen as our authoritative panel analyzes the New PPP Act's many facets and the key takeaways for borrowers and lenders.

Outline

  1. The New PPP Act--funds available and timeline
  2. Borrower eligibility
    • Business types added
    • Business types excluded
    • Size of business parameters
    • Demonstrated losses in revenue
  3. Second draw loan procedures
  4. Loan forgiveness
    • Covered period
    • Eligible expenses
  5. Tax treatment
    • Deductibility of expenses paid with PPP funds
    • Employee retention tax credit

Benefits

The panel will review these and other relevant issues:

  • What does the Act say about borrower eligibility for PPP funds, and how does it differ from the initial PPP?
  • What are expanded categories of eligible expenses, and what is the impact on loan forgiveness?
  • How have lender underwriting requirements been revised under the Act?
  • What advantages have been written into the Act for small borrowers and loans under $150,000?