Saturday’s Wall Street Journal featured the lawsuit filed by the 1851 Center for Constitutional Law‘s and Finney Law Firm‘s suit against Dr. Amy Acton and the Ohio Department of Health for their failure to provide due process hearings for businesses forced to close under her Emergency COVID-19 Pandemic Orders. The client seeking relief in the lawsuit is Tanya Rutner Hartman and her business, a bridal shop, Gilded Social, LLC.

A link to the article is here.

A link to the original Complaint is here.

For more information, contact attorney Christopher P. Finney (513.943.6655).

 

Today, the US House of Representatives passed the second phase of funding for the Paycheck Protection Program, providing another $310 billion in funding for the forgivable small business loans.  President Trump has said he plans on signing the bill tonight.

This means tens of thousands of applications pending at banks and other lending institutions throughout the country can now be funded.

It is not clear if this supplemental funding will mean full funding for the program.  Many businesses, sole proprietors and 1099 contractors have not yet even filed their applications.

When the Paycheck Protection Program (“PPP”) ran out of funds last week, many of our nation’s small businesses hardest hit financially by COVID 19 were left without relief.  And, reports that hundreds of millions of PPP dollars when to large, publicly traded companies led to strong criticism of the program.  Over the last few days, we’ve learned that Ruth’s Chris Steak House, Potbelly, and even Harvard got millions of dollars in PPP funding.

New guidance

On the heels of attacks over this use of PPP funds, the U.S. Small Business Administration (SBA) has issued new guidance that sends a strong message that PPP funds secured by large companies that don’t really need the money may need to be paid back.

The SBA added the following question today to its “Frequently Asked Questions” document: Do businesses owned by large companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan?

You can read the full answer here (see question 31).  In summary, the answer reminds us that as part of the application process all PPP borrowers must certify in good faith that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”

Successful public companies likely cannot make good faith certification of need

The answer to the FAQ also points out that it is unlikely that “a public company with substantial market value and access to capital markets” is able to make that certification in good faith.  According to the guidance, if such a company does make that certification, it needs to be prepared to provide the SBA with a basis for the certification.

What if such company already took PPP money?

Finally, the answer to the FAQ gives direction on what a company should do if it already made a certification of need that may not be supportable.  Essentially, it needs to pay the loan back by May 7, 2020:

“Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith.”

Conclusion

Finney Law Firm will continue to provide updates as more guidance is given by the SBA on the Paycheck Protection Program.  If you have questions about the PPP, please feel free to contact Rebecca Simpson Heimlich at 513.797.2856.

We have many clients whose application for a forgivable loan under the Paycheck Protection Program are currently pending and waiting for new funding from Congress, the US Senate passed a bill today to allocate $320 billion in additional funds. Action by the US House is expected Thursday.

Read more here from the New York Times.

Again, our advice is to apply and be patient. Congress will be fully funding this program.

 

According to Lieutenant Governor John Husted, Ohio is working to process a massive increase in applications for Ohio unemployment benefits.  More people have applied for Ohio unemployment benefits over the last month than had applied for such benefits in the last two years.

Expanded unemployment benefits

Additionally, the CARES Act expanded unemployment benefits to cover self-employed and independent contractors and promised an additional $600 per week on top of what the state pays.  This has all resulted in slow processing times and numerous questions.

Answers to FAQs

The State is working to answer those questions and decrease processing times. Here are some updates:

  • Claim number: If you are filing a claim due to COVID 19, use the mass layoff number 2000108 on applications.
  • Self-employed and independent contractors: The State will start taking your information but anticipates it will not be able to process or pay benefits until May 15 of this year.  Once processed and approved, however, benefits will be retroactive.
  • Additional $600 per week: These additional payments should be starting now.
  • Efforts to alleviate slow processing time: Ohio Department of Job and Family services is adding 337 new employees, text-to-speech capabilities, and adding a virtual call center.
  • Funding challenges: According to Husted, without federal assistance Ohio’s unemployment system is on track to run out of funds in June, but, he says, that doesn’t mean Ohioans will lose their benefits.  State legislators are working to resolve this issue.
  • Where to apply:

Conclusion

If you have questions on this or other relief available for small businesses, self-employed, and independent contractors during the COVID 19 crisis, please contact Rebecca Simpson Heimlich at 513.797.2856.

The SBA burned through $342 billion in Paycheck Protection Program’s (“PPP”) loan funds in just over a week. And of course it ran out of funds long before all applications were processed, leaving many businesspersons waiting to see if the program will be properly and fully funded (we think it will).

Where did the money go?

Well, the SBA has issued a good and short PowerPoint presentation on the destination of the loaned funds to date.  That is here.

If you need help accessing PPP funds or the companion Emergency Income Disaster Loan funds, please contact Rebecca Simpson Heimlich (513-797-2856).

Over the weekend, I spoke with about a dozen 1099 or business-owner clients who (a) either still did not know about the Paycheck Protection Program or (b) did not intend to apply for various reasons.  Some discussion of that.

  1. If you don’t know about the program, educate yourself. It is broad and generous. It encompasses almost every sole proprietor, 1099 contractor and business owner in the nation.  Read about it generally here and watch this webinar for employers with W-2 employees and this webinar aimed primarily at sole proprietors and 1099 contractors.
  2. Do I have to suffer closure or severe economic damage under the COVID-19 crisis  to be eligible? No. This program makes virtually no distinction between those severely impacted and those still operating “normally.” You do need to certify some impact from the COVID-19 crisis.
  3. Isn’t this just another SBA loan program with lots of paperwork and loan fees? No, not at all.  (a) First, it is a “forgivable loan.” (b) The primary condition is that you must continue to employ your employees for 8 weeks (or call them back if you already laid them off) after the loan is made. (c) If you meet that and a few other simple conditions, the “loan” becomes a grant. (d) It is east to apply. (e) There are no fees. (f) There is no loan guarantee.  (g) Even creditworthiness is not considered. This program is designed quickly to get cash into the hands of businesspersons so they can maintain their payroll and avoid bankruptcy.
  4. How do I apply? Call your bank.  If you need more help, contact Rebecca Simpson Heimlich of our office (513.797.2856).  Candidly, it is fairly easy and straightforward.
  5. But I read the program already is out of money? Yes, this is true, but it appears likely that Congress is poised to authorize another $300 billion this week.  Our view is the program will be fully funded until every eligible business which applies has been funded.
  6. Does the program apply to churches and other non-profits?  The program does have special rules for churches, but it generally applies to all 501-C3s and C-19s (veterans organizations).
  7. I don’t need the money; let someone else in need have the funds. This is certainly a justification for not applying, just so you have thought this through for yourself and your business.  When this program is gone, we see it as highly unlikely it will be renewed on such generous terms.

Every businessperson has their hands full right now, navigating the shoals of uncertainty and change the COVID crisis has presented, but this program almost certainly is well worth your time and attention.

The stated desire of Congress and the Administration in the Paycheck Protection Program (“PPP”) has been to get money into the hands of business owners — and keep workers off the unemployment line — absolutely as quickly as possible.

But that hasn’t prevented the endless delays and bickering between the democrat House and the GOP Senate in getting full appropriation for the program approved.

Read here that the Small Business Administration website now reads that it is “unable to accept new applications for the Paycheck Protection Program based on available appropriations funding. Similarly, we are unable to enroll new PPP lenders at this time.”

Watch this blog for further updates and contact Rebecca Simpson Heimlich (513.797.2856) for more information on this program.  She is keeping updated on the rules and the daily developments.

As our clients have noted from six years and a half years of our work to “Make a Difference,” Finney Law Firm  is actively working to assure that our attorneys are constantly up to date on developments in the law, and then impart that information to clients and the public with blog entries, e-newsletters, seminars, webinars and media appearances.

Our performance during the COVID-19 crisis has met and exceeded that standard.  And, because our clients hunger for information to help them to weather this unprecedented storm, the response has been overwhelming.

Here is our performance by the numbers since the beginning of March:

  • 28 COVID-related blog entries with critical legal updates for clients, including information on the PPP and EIDL programs from the SBA.
  • Those blog entries have had more than 6,300 “reads” since the crisis began.
  • 6 major Constant Contact e-mail blasts with important COVID-19 legal developments.
  • More than 13,250 “opens” of those emailed newsletters, a record number in one month.  We are seeing that the information is so valuable that there are a record number of “forwards” from clients to their contacts with our information, and those “forwards” are opening and reading the communications as well.
  • We have had 8 major TV and radio appearances relating to COVID-19 issues.
  • We have gotten calls from all over the nation for help on the PPP program from the SBA.
  • We have done or will do 4 webinars on the PPP program. Between the webinar live attendees and those watching the recordings, we will have reached more than 1,000 participants.
  • We have retained exclusive relationships with 1 Ohio e-notary and 1 Kentucky e-notary to become one of the first title companies to be able to do entirely electronic, remote closings over the internet through Ivy Pointe Title.

All of this is designed to assure we are as effective as we can be in serving you, by understanding the law, which is developing daily, by developing the contacts to achieve your objectives, and by imparting that knowledge in a usable format so you can implement to win on legal and economic battlefields that are daily emerging.

I congratulate and thank our team — lawyers, paralegals and staff — for contributing to this area of service to our clients.  And thank our clients — existing and new — for recognizing this sophisticated and cutting-edge approach to the practice of law for their benefit.

Let me know personally how the Finney Law Firm can help you to weather this storm.  My email is Chris@FinneyLawFirm.Com and my phone numbers are 513.943.6655 (o) and 513.720.2996 (c).

Look, the Paycheck Protection Program is enormous, offering help to every small business in America with W-2 employees and the administration and Congress asked them to launch with six days’ lead time. What did you expect?

Yes, there are problems with the launch.  But you are all sitting in lock-down at home anyway.  We counsel patience.  The President and Congress are united in their desire to get this money out where it is needed.

Read more here.

Attorney Rebecca Heimlich of the Finney Law Firm has carefully studied the PPP and the Emergency Income Disaster Loans (“EIDL”) to help our small business clients access these funds.  Feel free to call her at 513.797.2856 if you have questions about these programs or need help accessing PPP or EIDL funds.