Seeking Federal Assistance? Some legal tips for businesses.
CARES Act / Small Business Administration Programs
Buffalo Business First
Plenty of businesses are applying for loans fast and furiously through the U.S. Small Business Administration as they look for ways to secure their futures.
Business owners however have a lot to consider and should tread carefully, particularly with misinformation in rampant circulation.
Speaking with attorneys, accountants, and/or financial institutions who are familiar with the loan process, and who have put the time in to learn how to best service their client may be a prudent decision.
An important aspect to consider through all of it is the long-term impact COVID-19 could have on the business, said Nicholas Taylor, associate at HoganWillig PLLC.
“We are working with our clients in an all-encompassing manner so that they are in the best possible operative position once the pandemic has subsided,” he said.
Before they apply, he said entities should think about other forms of assistance, amending their business plans, tax implications, and examining cash flow for the remainder of the year and beyond.
Also it’s crucial that businesses document how funds received through a disaster or PPP loan are used, as well as ensuring they are used for proper and approved services, Taylor said.
Penalties for misuse, he noted, could result in loss of loan forgiveness or immediate repayment at 1.5 times the amount received.
“In effect, the SBA will ensure that the funds are being used to assist businesses who have been most impacted by the COVID-19 pandemic, and not for the expansion of a business’ operation or the enrichment of the business’ owners or executives,” he added.
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