REQUIRED DOCUMENTATION TO BE SUBMITTED IN ORDER TO OBTAIN PPP LOANYou must submit specific documentation with your PPP loan application in order to be reviewed and potentially accepted. Find the list here: Documentation List. Key Points from the U.S. Treasury Guidance Background: On April 1, 2020, the U.S. Department of the Treasury released guidance on the Paycheck Protection Program (PPP) which has modified certain provisions under the CARES Act. Maturity Date & Interest ***** These loans now have a maximum maturity of 2 years and a fixed interest rate that will not exceed 1.0%. ***** Under the CARES Act, loans had a maturity of 10 years and an interest rate of 4%. Maximum Loan Amount The maximum loan amount is the lesser of: 2.5 times the average monthly “payroll costs” for the one-year period prior to the loan origination date; or $10 million. Non-Payroll Cost Forgiveness Due to the anticipated high subscription, no more than 25% of the forgiven amount may be for non-payroll costs. The CARES Act did not provide a cap on non-payroll forgiveness. Deferred Payments All payments may be deferred for six (6) months. Under the CARES Act, payments could be deferred for up to one (1) year. First Come, First Served Although the program is open until June 30, 2020, borrowers are encouraged to apply as quickly as possible because of the funding cap. Borrowers will be granted loans in the order applications are received. The CARES Act did not specify how the loan applications would be prioritized. Employee Lay Offs, Compensation Reduction and Impact onLoan Forgiveness The intent of the program is to ensure employees remain employed. Thus, the amount of the PPP loan eligible for forgiveness will be reduced by the number of employees terminated during an eight-week period following the date of the loan’s origination. If the number of employees is reduced relative to the borrower’s prior employment levels (as determined from the data that was provided to the bank to obtain the loan), the amount eligible for forgiveness will be reduced. A reduction in forgiveness also applies if employees’ salaries are reduced by more than 25% (they are treated for loan forgiveness purposes as if they are terminated). Note that if additional employees are hired prior to June 30, 2020, then layoffs based on the 8- week period can be mitigated and the loan forgiveness will apply. Trying to “game” the system will not likely work. Decisions should be made on hiring, firing and salary reductions based on the requirements of your business, not an attempt to maximize the benefit from loan forgiveness – largely because you may not be successful in obtaining a loan and the timing of when the loan actually funds is still unknown.

The Coronavirus Aid, Relief, and Security Act (“CARES Act”) will provide billions of dollars in loans and assistance to the private sector. This will include loans for payroll and operating expenses under the Paycheck Protection Program (“PPP”) and economic injury disaster loans (“EIDL”). However, companies seeking to take advantage of the relief provided under this Act should realize that any assistance will come with significant government oversight. If certain provisions of the CARES Act are not strictly complied with, the government may take numerous enforcement actions that could result in significant penalties and fines. Now is the time for you and your company to take the necessary proactive steps to ensure compliance with the CARES Act. This sprawling 880-page piece of legislation contains a myriad of complex provisions – some of which put conditions on certain types of assistance. For instance, as part of the PPP application process, companies and each owner having a 20% or greater ownership interest will need to certify, in good faith, that, among other things: Current economic uncertainty makes the loan necessary to support the company’s ongoing operations; Funds will be used to retain workers and maintain payroll or to make mortgage, lease, or utility payments (and that if not used for these reasons, the federal government may pursue criminal fraud charges against the applicant); and The company has not received another loan under the PPP. Critically, you also will need to provide documentation verifying your use of the loan proceeds for the eight-week period following the loan. This information includes: the number of full-time equivalent employees on payroll as well as the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities. A sample PPL application can be found here: https://www.sba.gov/sites/default/files/2020-03/Borrower%20Paycheck%20Protection%20Program%20Application_0.pdf For EIDL loans, the company must be located in a declared disaster area and must have suffered a “substantial economic injury” as a direct result of a disaster such as COVID-19. EIDLs are not intended to replace lost sales or profits; rather, they are intended to pay fixed debts, payroll, and other similar operating expenses. The EIDL application can be found here: https://covid19relief.sba.gov/#/ NOTE THAT THESE LOANS ARE OBTAINED UNDER SWORN OATH THAT THE ELIGIBILITY REQUIREMENTS FOR THE LOAN ARE SATISFIED. THUS, APPLYING FOR THE LOAN AS A NON-ELIGIBLE BORROWER CARRIES SIGNIFICANT POTENTIAL LIABILITY. SINCE THE GOVERNMENT WILL RECEIVE INFORMATION FROM YOU, APPLICANTS RUN THE RISK OF AUDIT AND, IF FOUND TO HAVE KNOWINGLY MADE ANY FALSE STATEMENTS TO OBTAIN A GUARANTEED LOAN, FACE SIGNIFICANT FINANCIAL AND OTHER PENALTIES, INCLUDING IMPRISONMENT OF UP TO FIVE YEARS AND A FINE OF UP TO $250,000. Accordingly, companies receiving funds under the CARES Act may want to follow some of this practical advice: Work with a qualified attorney to establish adequate compliance policies; Carefully review any submissions to the federal government with an eye toward ensuring the accuracy of any representations or attestations; Specifically account for your use of CARES Act funds; Track compliance with certain CARES Act provisions; and Evaluate activities that might be red flags for the new CARES Act watchdogs, such as reductions in force. In 2008, the government provided significant assistance to companies in the private sector under the Troubled Assistance Relief Program (“TARP”). Oversight of that program has resulted in numerous investigations and multi-billion dollar penalties against non-compliant participants. Companies availing themselves of funds under the CARES Act should expect equally rigorous government oversight and enforcement. If you would like specific guidance regarding compliance with the CARES Act, please contact Karen Stringer (kstringer@olenderfeldman.com) or Jillian Benda Goldberg (jgoldberg@olenderfeldman.com). The foregoing is intended to be informational and does not constitute legal advice regarding any specific situation.

We are pleased to have represented our client Decusoft, Inc. in connection with a strategic investment from FINTOP Capital. Click here to read the Press Release.

We wanted to highlight one of our clients who is diverting their normal business operations to manufacture badly needed equipment used to care for those stricken with COVID-19. Maingear, Inc., a high end producer of PCs, is manufacturing ventilators which are in high demand and critical to caring for individuals compromised by COVID-19. For more information, click here.

Paycheck Protection Program Loans Update - April 8, 2020 The borrower is responsible for providing an accurate calculation of payroll costs and the borrower must attest to the accuracy of those calculations. Small businesses can be eligible borrowers even if they have more than 500 employees, as long as they qualify for the SBA employee-based or revenue-based size standard corresponding to its primary industry. Additionally, businesses can qualify for the PPP if they meet the SBA’s “alternative size standard:” (1) $15 million net worth of the business; and (2) average net income after Federal income taxes for the past two full fiscal years is not more than $5 million. A business is still eligible for a PPP loan if the business has 500 or fewer employees or the business meets the SBA-employee based size standards for its industry. It is the responsibility of the borrower to determine which entities are its affiliates and calculate employee headcount. If a minority shareholder in a business waives or relinquishes any existing right to prevent a quorum or otherwise block action by the board or shareholders, they are no longer an affiliate of the business. The exclusion of compensation in excess of $100k only applies to cash compensation and not to non-cash benefits including retirement plans, health care coverage and payment of state and local taxes assessed on compensation. PPP loans cover payroll costs, including for vacation, parental, family and sick leave. It does not cover severance. In evaluating a borrower’s eligibility, a lender may consider whether a seasonal borrower was in operation on February 15, 2020 or for an 8-week period between February 15, 2019 and June 30, 2019. Payroll documentation provided by PEOs or similar payroll providers indicating the amount of wages and payroll taxes reported to the IRS will be considered acceptable loan payroll documentation. Only an authorized representative of the business seeking a loan may sign on behalf of the business. Businesses are ineligible if an owner of 20% or more of the equity of the applicant is presently incarcerated, on probation, on parole, subject to an indictment or any other formal criminal charges or has been convicted of any felony within the last 5 years. Borrowers can calculate their aggregate payroll costs using data from the previous 12 months or from the 2019 calendar year. For seasonal businesses, applicant may use average monthly payroll from February 15, 2019, or March 1, 2019 and June 30, 2019. Any amounts paid to an independent contractors or sole proprietors should be excluded from the eligible borrower’s payroll costs. Payroll costs are not reduced by taxes imposed on employees and required to be withheld by the employer and do not include the employer’s share of payroll taxes. Borrowers who have previously submitted loan applications which have not yet been processed may revise their applications based on these clarifications.

We are very pleased to announce the promotion of Michael J. Zussman to Partner in the Firm’s corporate practice group. Mike’s expertise in venture capital financings, mergers and acquisitions, technology transactions and more are well known to the Firm’s client base and greatly appreciated by his fellow attorneys. For more on Mike, click here. Congratulations Mike!

Last night, Governor Murphy signed Executive Order No. 122, ceasing all non-essential construction projects and imposing additional mitigation requirements on essential retail businesses and essential industries to limit the spread of COVID-19 in New Jersey. The order also outlines specific protections and policies for all essential retail, manufacturing, and warehousing businesses, as well as businesses engaged in essential construction projects. The order will take effect on Friday, April 10, at 8:00 p.m. Governor Murphy’s executive order directs the following: Essential retail businesses that are still permitted to operate under Executive Order No. 107 (2020) must adopt the following policies: Limit occupancy at 50 percent of the stated maximum store capacity, if applicable, at one time; Establish hours of operation, wherever possible, that permit access solely to high-risk individuals, as defined by the CDC; Install a physical barrier, such as a shield guard, between customers and cashiers/baggers wherever feasible or otherwise ensure six feet of distance between those individuals, except at the moment of payment and/or exchange of goods; Require infection control practices, such as regular hand washing, coughing and sneezing etiquette, and proper tissue usage and disposal; Provide employees break time for repeated handwashing throughout the workday; Arrange for contactless pay options, pickup, and/or delivery of goods wherever feasible. Such policies shall, wherever possible, consider populations that do not have access to internet service; Provide sanitization materials, such as hand sanitizer and sanitizing wipes, to staff and customers; Require frequent sanitization of high-touch areas like restrooms, credit card machines, keypads, counters and shopping carts; Place conspicuous signage at entrances and throughout the store, if applicable, alerting staff and customers to the required six feet of physical distance; Demarcate six feet of spacing in check-out lines to demonstrate appropriate spacing for social distancing; Require workers and customers to wear cloth face coverings while on the premises, except where doing so would inhibit that individual’s health or where the individual is under two years of age, and require workers to wear gloves when in contact with customers or goods. Businesses must provide, at their expense, such face coverings and gloves for their employees. The physical operations of all non-essential construction projects shall cease at 8:00 p.m. on Friday, April 10. Manufacturing businesses, warehousing businesses, and businesses engaged in essential construction projects must adopt policies that include, at minimum, the following requirements: Prohibit non-essential visitors from entering the worksite; Limit worksite meetings, inductions, and workgroups to groups of fewer than ten individuals; Require individuals to maintain six feet or more distance between them wherever possible; Stagger work start and stop times where practicable to limit the number of individuals entering and leaving the worksite concurrently; Stagger lunch breaks and work times where practicable to enable operations to safely continue while utilizing the least number of individuals possible at the site; Restrict the number of individuals who can access common areas, such as restrooms and breakrooms, concurrently; Require workers and visitors to wear cloth face coverings, in accordance with CDC recommendations, while on the premises, except where doing so would inhibit the individual’s health or the individual is under two years of age, and require workers to wear gloves while on the premises. Businesses must provide, at their expense, such face coverings and gloves for their employees. Require infection control practices, such as regular hand washing, coughing and sneezing etiquette, and proper tissue usage and disposal; Limit sharing of tools, equipment, and machinery; Provide sanitization materials, such as hand sanitizer and sanitizing wipes, to workers and visitors; and Require frequent sanitization of high-touch areas like restrooms, breakrooms, equipment, and machinery. All essential retail businesses, warehousing businesses, manufacturing businesses, and businesses performing essential construction projects must also adopt policies that include, at minimum, the following requirements: Immediately separate and send home workers who appear to have symptoms consistent with COVID-19 illness upon arrival at work or who become sick during the day; and Promptly notify workers of any known exposure to COVID-19 at the worksite, consistent with the confidentiality requirements of the Americans with Disabilities Act and any other applicable laws; Clean and disinfect the worksite in accordance with CDC guidelines when a worker at the site has been diagnosed with COVID-19 illness; Continue to follow guidelines and directives issued by the New Jersey Department of Health, the CDC and the Occupational Health and Safety Administration, as applicable, for maintaining a clean, safe and healthy work environment. Where a business is authorized to maintain in-person operations, owners of buildings used for commercial, industrial or other enterprises shall adopt policies that, at minimum, implement the following cleaning protocols in areas where operations are conducted: Clean and disinfect high-touch areas routinely in accordance with CDC guidelines, particularly in spaces that are accessible to staff, customers, tenants, or other individuals, and ensure cleaning procedures following a known or potential exposure in a facility are in compliance with CDC recommendations; Otherwise maintain cleaning procedures in all other areas of the facility; and Ensure that the facility has a sufficient number of workers to perform the above protocols effectively and in a manner that ensures the safety of occupants, visitors, and workers.

New Jersey Executive Order No. 112 and New York Executive Order No. 202.10 As of April 9, 2020, according to the Centers for Disease Control and Prevention, New Jersey and New York had reported a total of 196,753 cases of COVID-19. Accordingly, the governors of the states of New Jersey and New York recently signed Executive Order No. 112 and Executive Order No. 202.10 respectively in an attempt to ensure that for the duration of the current public health emergency, each of these states has an adequate number of physicians to treat patients afflicted by COVID-19 and other critical illnesses, and patients requiring essential invasive procedures, diagnostic testing and general medical care. A brief summary of each Order follows. On April 1, 2020, governor Philip Murphy, took the drastic measure of signing Executive Order No. 112 that authorized the Department of Law and Public Safety, Division of Consumer Affairs (“DCA”) to permit for a temporary basis the practice of medicine in New Jersey by (i) physicians previously licensed to practice in New Jersey who retired from active practice within the last five years, either by electing to place their license in inactive status or by allowing their license to lapse; and (ii) physicians who are licensed, in good standing, in another country. For retired physicians, the Order suspends and waives requirements pertaining to fees, affidavits of employment during retirement, and proof of continuing education. For foreign-licensed physicians, the Order suspends and waives requirements for examination, minimum premedical education and additional post-graduate education. In both instances, the Order waives the requirement for the mandated minimum medical malpractice insurance coverage. For the duration of this public health emergency, the aforementioned physicians will be immune from certain civil liability. In particular, such immunity extends to any damages alleged to have been sustained as a result of a physician’s acts or omissions that are undertaken in good faith in support of New Jersey’s COVID-19 response, whether or not sustained in the scope of a physician’s practice. Such immunity will not extend to acts or omissions that constitute a crime, fraud, malice, gross negligence or willful misconduct. Notably, this immunity is retroactive and applies to acts or omissions occurring at any time during the declared public health emergency. On March 23, 2020, governor Andrew Cuomo of New York issued Executive Order No. 202.10 in which the governor temporarily suspended or modified through April 22, 2020 any New York statute, local law, ordinance, order, rule, or regulation to provide physicians immunity from civil liability for any injury or death alleged to have been sustained directly as a result of an act or omission by a physician in the course of providing medical care in support of New York’s response to the COVID-19 outbreak. Such immunity will not extend to any injury or death that is caused by the gross negligence of a physician. The Order additionally: (i) affords physicians who are acting in reasonably good faith absolute immunity from civil liability for any failure to comply with any recordkeeping requirement to the extent necessary to perform tasks in response to the COVID-19 outbreak, including, but not limited to, the requirements to maintain medical records that accurately reflect the evaluation and treatment of patients, or requirements to assign diagnostic codes or to create or maintain other records for billing purposes.; (ii) removes limits on the working hours for physicians; and (iii) permits graduates of foreign medical schools who don’t have licenses to practice medicine, but do have at least one year of graduate medical education, to provide patient care in hospitals if they have completed at least one year of graduate medical education. On April 7, 2020, via Executive Order No. 202.14, governor Cuomo temporarily suspended or modified any New York statute, local law, ordinance, order, rule, or regulation to the extent necessary to permit any physician who will graduate in 2020 from an accredited academic medical program, and who has been accepted by an accredited residency program within or outside of New York State, to practice at any institution under the supervision of a licensed physician. He additionally extended the above directives for thirty days until May 7, 2020.

In the latest effort to stem the spread of COVID-19, on April 8, 2020, Governor Phil Murphy issued Executive Order 122 which suspends all “non-essential” construction in New Jersey effective as of Friday, April 10, 2020 at 8:00 p.m. The order recognizes that construction sites “frequently require large numbers of individuals to touch the same surfaces [and] gather closely together…” This order follows the path started by New York which shut down non-essential construction on March 29, 2020 pursuant to Executive Order 202.13. Pursuant to Executive Order 122, “essential” construction in New Jersey includes: Projects necessary for the delivery of health care services, including but not limited to hospitals, other health care facilities and pharmaceutical manufacturing facilities; Transportation projects, including roads, bridges and mass transit facilities or physical infrastructure, including work done at airports and seaports; Utility projects, including those necessary for energy and electricity production and transmission, and any decommissioning of facilities used for electricity generation; Residential projects that are exclusively designated as affordable housing; Projects involving pre-K-12 schools, including but not limited to projects in Schools Development Authority districts, and projects involving higher education facilities; Projects already underway involving individual single-family homes, or an individual apartment unit where an individual already resides, with a construction crew of 5 or fewer individuals. This includes additions to single-family homes such as solar panels; Projects already underway involving a residential unit for which a tenant or buyer has already entered into a legally binding agreement to occupy the unit by a certain date, and construction is necessary to ensure the unit’s availability by that date; Projects involving facilities at which any one or more of the following takes place: the manufacture, distribution, storage, or servicing of goods or products that are sold by online retail businesses or essential retail businesses, as defined by Executive Order No. 107 (2020) and subsequent Administrative Orders adopted pursuant to that Order; Projects involving data centers or facilities that are critical to a business’s ability to function; Projects necessary for the delivery of essential social services, including homeless shelters; Any project necessary to support law enforcement agencies or first responder units in their response to the COVID-19 emergency; Any project that is ordered or contracted for by Federal, State, county, or municipal government, or any project that must be completed to meet a deadline established by the Federal government; Any work on a non-essential construction project that is required to physically secure the site of the project, ensure the structural integrity of any buildings on the site, abate any hazards that would exist on the site if the construction were to remain in its current condition, remediate a site, or otherwise ensure that the site and any buildings therein are appropriately protected and safe during the suspension of the project; and Any emergency repairs necessary to ensure the health and safety of residents. Even if deemed essential, the order requires certain specific measures aimed at protecting the health and safety of essential workers and the public at large. These requirements include: Prohibition on non-essential visitors from entering worksites; Limits of ten individuals at worksite meetings, inductions, and workgroups; Mandatory social distance enforcement wherever possible; Staggering of work start and stop times as well as lunch breaks to limit the number of individual groupings; Restrictions on the number of individuals who can access common areas including restrooms and breakrooms concurrently; Requirements that workers and visitors wear cloth face coverings with limited exceptions and implement infection control practices, including proper hand washing and coughing and sneezing etiquette; Limits on sharing of equipment, machinery and/or tools; Increased sanitation protocols. Executive Order 122 will undoubtedly have a large impact on the property development and construction industries in the State of New Jersey. If you would like guidance on how to approach jobsite suspension or to review governing contracts to ensure compliance including with various notice provisions, please contact either Christian Jensen (cjensen@olenderfeldman.com) or Kurt Olender (kolender@olenderfeldman.com).

Though many of you may have missed it for obvious reasons, the New York Stop Hacks and Improve Electronic Data Security (“SHIELD”) Act became effective on March 21. In short, the SHIELD Act amended and strengthened New York’s data breach laws to include application to businesses outside of New York, impose security requirements, and otherwise expands prior New York law as follows: The definition of “Private Information” was broadened to include biometrics (i.e., fingerprints, voice prints, retina image), username/email addresses in combination with a password or security question/answer, financial account number, and credit/debit card number regardless of security code if account can be accessed/used with security code. Thus, a Breach involving Private Information now covers far more data than previously included. The definition of “Breach” was expanded to include any unauthorized access that compromises the confidentiality, security or integrity of Private Information. Certain examples are provided, and actual known acquisition of Private Information is no longer required. Thus, a Breach now covers far more and common scenarios and mere access is sufficient. The geographical scope of the SHIELD Act is expanded to cover any person/business that owns or licenses any information of any New York resident. Thus, the SHIELD Act is not limited to businesses located in New York or which conduct business in New York. Businesses or individuals to whom the SHIELD Act applies must now adopt reasonable security safeguards to protect the Private Information. These safeguards include the following: Administrative: Designate employee to coordinate the security program and identify risks. Assess the sufficiency of safeguards in place to control the identified risks. Train employees in adequate security program practices and procedures. Select vendors which can maintain appropriate safeguards, and enforcing same via written contract. Update and adapt all of the above on a regular basis and as-needed. Technical: The Privacy by Design concept - assess risks in network and software design. Assess risks in information processing, transmission and storage. Prevent, detect and respond to any attack or system failure. Regularly test and monitor system controls and procedures. Physical: Assess risks of information storage and disposal. Prevent, detect and respond to any intrusion, unauthorized access to Private Information. Secure and timely disposal of Private Information. Many businesses will find that they may already be contractually or legally bound to follow the requirements of the SHIELD Act independent of the Act itself as these requirements overlap in large part with best practices, the GDPR, the CCPA and many other regulatory schemes. Indeed, the SHIELD Act specifically notes that compliance with certain regulatory schemes by regulated businesses may substitute for some of the SHIELD Act requirements. Though the SHIELD Act allows the Attorney General to pursue civil penalties (up to $5,000 per security violation, $20 per failed breach notification up to $250,000), the SHIELD Act does not provide a private cause of action. However, failure to comply with the SHIELD Act could still result in private causes of action as a result of: (a) breach of contract where an entity must comply with all applicable legal requirements; or (b) the SHIELD Act being held to be evidence of reasonable data protection and security practices where there is a data breach. Thus, the risk of non-compliance is not limited to that of potential civil penalties. For more information or assistance, please contact Michael J. Feldman, Esq., at mfeldman@olenderfeldman.com or 908-964-2486. As always, and in particular during these trying times, please also regularly visit https://www.olenderfeldman.com/blog/ for constantly updated and useful critical information on government action, legal changes, funding (loans, grants, etc.) opportunities and related matters in connection with COVID-19.

On April 14, 2020, the SBA released a second interim final rule clarifying various aspects of the Paycheck Protection Program (PPP). Individuals with self-employment Income who File a Form 1040, Schedule C are eligible for a PPP loan if: (i) they are in operation on February 15, 2020; (ii) are an individual with self-employment income (such as an independent contractor or a sole proprietor); (iii) have a principal place of residence is in the United States; and (iv) have filed or will file a Form 1040 Schedule C for 2019. For individuals with income from self-employment, the proceeds of a PPP loan can be used for the following: (i) Owner compensation replacement, calculated based on 2019 net profit, (ii) Employee payroll costs for employees whose principal place of residence is in the United States, (iii) Mortgage interest payments (but not mortgage prepayments or principal payments) on any business mortgage obligation on real or personal property, business rent payments, and business utility payments. Borrower’s must have claimed or be entitled to claim a deduction for such expenses on the 2019 Form 1040 Schedule C for them to be a permissible use during the eight-week period following the first disbursement of the loan. The amount of loan forgiveness can be up to the full principal amount of the loan plus accrued interest. The actual amount of loan forgiveness will depend, in part, on the total amount spent over the covered period on: owner compensation replacement, payroll costs, mortgage interest payments, business rent payments, and business utility payments. Under the SBA’s present calculation, every self-employed individual applying for the PPP with no employees will have to repay some amount of their loan. Self-employed individuals’ maximum loan amount is determined on a monthly basis, and is $20,833 ($100k/12x2.5). In contrast, the maximum forgiveness amount for owner compensation is determined on a weekly basis and must be based on the taxpayer’s 2019 Schedule C, Line 31 (Net profit or Loss). For an individual making $100k, the maximum forgiveness amount for owner compensation is $15,385. Assuming an individual spends the remainder of the loan amount on forgivable overhead expenses, and applies the 25% non-payroll limitation to the forgiveness amount, there would be a gap of 1.53% of the loan amount for which forgiveness becomes impossible. Partnerships are eligible for a PPP loan however, partners in a partnership may not submit a separate PPP loan application as a self-employed individual. The self-employment income of general active partners may be reported as a payroll cost, up to $100k annualized on a PPP loan application filed by or on behalf of a partnership. If you received an SBA EIDL loan from January 31, 2020 through April 3, 2020, you can apply for a PPP loan. If your EIDL loan was not used for payroll costs, it does not affect your eligibility for a PPP loan. If your EIDL loan was used for payroll costs, your PPP loan must be used to refinance your EIDL loan. Proceeds from any advance up to $10,000 on the EIDL loan will be deducted from the loan forgiveness amount on the PPP loan. Self-employed individuals will need to rely on their 2019 Form 1040 Schedule C, which provides verifiable documentation on expenses between January 1, 2019 and December 31, 2019. For individuals with income from self-employment from 2019 for which they have filed or will file a 2019 Form 1040 Schedule C, expenses incurred between January 1, 2020 and February 14, 2020 may not be considered because of the lack of verifiable documentation on expenses in this period. The SBA will issue additional guidance for those individuals with self-employment income who: (i) were not in operation in 2019 but who were in operation on February 15, 2020, and (ii) will file a Form 1040 Schedule C for 2020. At least 75 percent of the PPP loan proceeds must be used for payroll costs. For purposes of determining the percentage of use of proceeds for payroll costs (but not for forgiveness purposes), the amount of any refinanced EIDL will be included. For loan forgiveness, you must submit evidence of business rent, business mortgage interest payments on real or personal property, or business utility payments during the covered period if you used loan proceeds for those purposes. If you have employees, you should submit Form 941 and state quarterly wage unemployment insurance tax reporting forms or equivalent payroll processor records that best correspond to the covered period (with evidence of any retirement and health insurance contributions). Businesses with legal gaming revenues are not rendered ineligible for a PPP loan if they meet the existing standard or if the following two conditions are satisfied: (a) the business’s legal gaming revenue (net of payouts but not other expenses) did not exceed $1 million in 2019; and (b) legal gaming revenue (net of payouts but not other expenses) comprised less than 50 percent of the business’s total revenue in 2019. Businesses that received illegal gaming revenue are categorically ineligible.

Receive Expert Guidance, Resources & Tools to Keep Your Business Thriving During and After the COVID-19 Pandemic. OlenderFeldman is pleased to sponsor and participate directly in this upcoming Zoom event hosted by the Business Innovators Alliance. The Firm’s Employment Practices Partner, Howard A. Matalon, will be live during this outreach program to provide practical guidance on important measures businesses can implement right now to maximize their productivity despite the current economic climate as well as tackling important questions from registrants. For more information and a link to registration, click here.