Certain provisions of the Coronavirus/COVID-19 economic stimulus legislation are subject to the issuance of government regulations and other government action; thus, certain details regarding the legislation may be clarified or added.
Calculating Loan Amount
Economic Injury Disaster Loan (EIDL)
New Allowable Uses of PPP Loan Proceeds2
Elimination of the “Alternate Covered Period”
1 For clarity, these are to be updated as soon as feasible
2 For clarity, these new uses are in addition to: (i) payroll costs (as defined in the CARES Act, Economic Aid Act, and this interim final rule); (ii) costs related to the continuation of group health care, life, disability, vision, or dental benefits during periods of paid sick, medical, or family leave, and group health care, life, disability, vision, or dental insurance premiums; (iii) mortgage interest payments (but not mortgage prepayments or principal payments); (iv) rent payments; (v) utility payments; (vi) interest payments on any other debt obligations that were incurred before February 15, 2020; and (vii) refinancing an SBA EIDL loan made between January 31, 2020, and April 3, 2020
3 This appears to conflict with Section 320 of the Economic Aid Act which amends Section 364 of title 11 of the United States Code by adding at the end the following: “(g)(1) The court, after notice and a hearing, may authorize a debtor in possession or a trustee that is authorized to operate the business of the debtor under section 1183, 1184, 1203, 1204, or of this title to obtain a loan under paragraph (36) or (37) of section 7(a) of the Small Business Act (15 U.S.C. 636(a)), and such loan shall be treated as a debt to the extent the loan is not forgiven in accordance with section 7A of the Small Business Act or subparagraph (J) of such paragraph (37), as applicable, with priority equal to a claim of the kind specified in subsection (c)(1) of this section. (2) The trustee may incur debt described in paragraph (1) notwithstanding any provision in a contract, prior order authorizing the trustee to incur debt under this section, prior order authorizing the trustee to use cash collateral under section 363, or applicable law that prohibits the debtor from incurring additional debt. (3) The court shall hold a hearing within 7 days after the filing and service of the motion to obtain a loan described in paragraph (1). Notwithstanding the Federal Rules of Bankruptcy Procedure, at such hearing, the court may grant relief on a final basis.’’ As such, we await further clarity from the SBA and U.S. Treasury on this point
4 Italicized text has been added by the Economic Aid Act.