As the world begins to contemplate a post-lockdown reopening of business and society, the global insurance magazine Reactions (subscription required) turned to our COVID-19 Response Team for insight on the delicate art of returning to normalcy.

Mayer Brown lawyers interviewed for the article discuss the challenges many businesses will face as they grapple with social-distancing

The US Small Business Administration has extended the safe harbor period for PPP loan return until May 14, 2020, stated that it will provide further guidance regarding the PPP necessity certification, and added confusion regarding the employee-size standard.

In yesterday’s FAQ #43, the US Small Business Administration (SBA) stated:

  1. Question: FAQ #31 reminded borrowers to review carefully the required certification[1] on the Borrower Application Form that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” SBA guidance and regulations provide that any borrower who applied for a PPP loan prior to April 24, 2020 and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith. Is it possible for a borrower to obtain an extension of the May 7, 2020 repayment date?


Continue Reading Another Day with the Paycheck Protection Program: US SBA “Tweaks” the Rules (Yet Again)

The Federal Reserve’s Paycheck Protection Program Liquidity Facility (“PPPLF”) is now available to non-bank PPP lenders to finance Paycheck Protection Program (“PPP”) loans that they originated or purchased.  While the PPPLF was previously only available to depository institutions to finance PPP loans that they originated, the Federal Reserve revised its eligibility criteria on April 30,

Non-bank lenders providing struggling small businesses a lifeline through forgivable Paycheck Protection Program (“PPP”) loans may soon have access to the Federal Reserve’s Paycheck Protection Program Liquidity Facility (“PPPLF”) to support their lending operations. The Federal Reserve issued a term sheet for the PPPLF on April 9, 2020, indicating its intention to provide capital to

On April 28, 2020, the SBA issued a new Interim Final Rule (“IFR”) addressing certain requirements imposed on lenders under the Paycheck Protection Program (“PPP”). The IFR clarifies how and when PPP loans must be disbursed, sets expectations regarding the reporting of PPP loans to the SBA, and identifies certain circumstances under which a PPP lender will not be entitled to its processing fee as origination compensation for PPP loans. The rule is effective immediately, though requirements related to loan reporting contemplate the SBA’s issuance of a form that is not yet available.

First, the IFR clarifies several aspects of PPP loan disbursement requirements. The IFR provides that PPP loans are single disbursement loans. It also provides that the 10-day disbursement window within which a lender must disburse loan funds normally runs from the date the lender receives a SBA loan number, but: (i) for loans not already fully disbursed, the 10-day window runs from April 28th and the 8-week forgiveness window runs from the date of the first disbursement; and (ii) the lender is not responsible for delays in disbursement attributable to a borrower’s failure to timely provide loan documentation (e.g., executing a promissory note), though loan approvals must be cancelled if required loan documentation is not submitted within 20 calendar days after approval. Moreover, it provides that amounts included in a PPP loan representing refinancing of a SBA Economic Injury Disaster Loan (“EIDL”) must be disbursed directly to the SBA, rather than to the borrower.


Continue Reading SBA Issues New PPP Rule Addressing Disbursement Requirements, Loan Reporting, and Lender Compensation

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020 to provide $2.2 trillion to U.S. citizens and businesses afflicted by the COVID-19 outbreak, including $349 billion for financing “small businesses” under the Paycheck Protection Program or PPP.  Under the PPP, eligible small businesses are entitled

In statements made yesterday on “Squawk Box” on CNBC, Secretary Mnuchin said:

“I’m going to be putting out an announcement later this morning that for any loan over $2 million, the Small Business Administration will be doing a full review of that loan before there is loan forgiveness,” and regarding the Los Angeles Lakers, the

As we continue to revise and update our Comparison of Economic Support Measures being introduced by governments around the world to address the impact of the COVID-19 pandemic, we are starting to see some key trends emerge. In our most recent update, published today, we observe:

  • an increase in measures designed to protect those sectors

Today, the US Small Business Administration (SBA) provided further guidance for PPP loan applicants in FAQ #37, which states:

  1. Question: Do businesses owned by private companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan?

Answer: See response to FAQ #31[1].

Beyond potentially excluding private companies (in addition to public companies under the SBA’s prior FAQ #31) with “adequate sources of liquidity,” the SBA offers no meaningful guidance regarding such “adequacy” or “sources” or even regarding what might constitute such “liquidity.”


Continue Reading Still Clear as Mud (Unfortunately): SBA’s Latest Official FAQ Fails to Provide Meaningful Guidance for Potential PPP Borrowers

Mayer Brown’s COVID-19 Global Response Team has launched two new tools on its COVID-19 portal, the Back to Business Navigator and the Global Stimulus Navigator, to help companies navigate the myriad legal issues across jurisdictions that most affect their business.

The gradual process of reopening the economy and businesses by lifting government-mandated stay-at-home