[Hidden-tech] Squirly laws in PPP Loan Forgiveness

[Rich@tnr]

I got this from Paul Peter Nicolai, a local lawyer many of you might 
know (on 8/12), and, after all, a month old.

> Many are aware that the time for filing the paperwork necessary to 
> show that all or part of your payroll Protection Program loan should 
> be forgiven is coming up.
>
> There are two reasons why you should hold off on trying to file anything.
>
>  1. First, exactly what is needed is not quite determined and banks
>     are in different stages of being ready to accept the paperwork.
>  2. Second, ongoing negotiation between the administration and
>     Congress that is such that PPP loans under some threshold - likely
>     to be about $150,000 - are simply going to be forgiven without any
>     requirement of proof being filed. Of course, we will not know
>     whether this is the case or what level it would apply at until
>     there is a negotiated deal passed by Congress and signed by the
>     president.
>



See: 
https://www.masslive.com/business/2020/08/small-business-administration-has-opened-its-paycheck-protection-program-forgiveness-portal-heres-why-many-small-businesses-will-have-to-wait.html


On 9/23/2020 5:21 PM, Rob Laporte via Hidden-discuss wrote:
> Hi All,
>
> It's hugely complicated, and I expect to resolve it via my firm's CPA 
> soon, but meanwhile I wonder if this recap to my CPA resonates with 
> any others of you trying to battle the effects of banking lobbyists 
> working to reduce US-wide PPP loan forgiveness:
>
>     When I applied to the loan on 4/9, calcuations were based on
>     payroll, no S-Corp [or C-Corp] owner distinction. So I applied for
>     the amount I did based on that. The later rule change regarding
>     S-corp owners seems wrong--it changes the terms of the loan
>     /after/ making a business decision to get the loan at all--hence
>     my thinking it's best to invoke:
>
>         *
>
>         “Borrowers and lenders may rely on the guidance provided in
>         this document as SBA’s interpretation of the CARES Act and of
>         the Paycheck Protection Program Interim Final Rules (“PPP
>         Interim Final Rules”)(link). The U.S. government will not
>         challenge lender PPP actions that conform to this guidance,
>         and to the PPP Interim Final Rules and any subsequent
>         rulemakingin effect at the time.” (
>
>         *
>
>         *https://www.sba.gov/sites/default/files/2020-04/Paycheck-Protection-Program-Frequently-Asked-Questions_04%2024%2020.pdf
>         4/24/20)*
>
>     *
>     *
>     *Also, I applied based on rent paid, regardless of later rule
>     changes negating forgiveness for rent paid to the business owner
>     or to a relative of the owner. *
>     *
>     *
>     *But if other ways to slice this will work for getting all
>     forgiveness, I'd do that, being cognizant of the National Law
>     Reivew's warning that choosing any rules after one's PPP loan
>     application date (4/9 for me) could mean "that to be eligible for
>     this safe harbor, borrowers may need to keep all full time
>     equivalent employees employed even after the covered period ends"
>     up to 12/31/2020.*
>
> I coud write a small book on the many ways that the ever-changing PPP 
> rules/laws together with PR lure small businesses into taking the bait 
> on the 24-week option and/or delying forgiveness application, which 
> reduces forgiveness and increases debt. And forget about the PR about 
> all loans under 150G maybe being forgiven automatically--it spurs more 
> delays in forgiveness applications, which will benefit the big banks 
> that buy the books of PPP loans from small banks and then change the 
> rules (the CARES Act allows that) for profit and perhaps collateralize 
> some of the debt into CLOs to sell to investors.
>
> But to keep focus, I wonder if anyone has insight on the legality of 
> in fact invoking the laws that were in effect when one applied to the 
> original PPP loan, so as to obviate all later rules.
>
> Take Care,
>
>
> Rob Laporte
>
> Chief Business Development Officer | Founder | Chairman
>
> DISC, Inc. - Making Websites Make Money
>
> 413-584-6500
>
> rob at 2disc.com <mailto:rob at 2disc.com> | LinkedIn 
> <https://www.linkedin.com/in/2disc/> | 2DISC.com <https://www.2disc.com>
>
>
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