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MAY 6, 2020 

On April 3, 2020, banks, credit unions, and community lenders throughout the U.S. started to accept applications from businesses for the new Small Business Administration lending facility, the Paycheck Protection Program, created by the CARES Act. Aimed at providing immediate relief to small and mid-sized businesses across the country in response to COVID-19, the program was extremely popular and the initial $349 billion appropriation by Congress to fund the program soon ran out. On April 27, 2020, the Paycheck Protection Program reopened with an additional $310 billion appropriation from Congress. 

Among the recipients of the first wave of Paycheck Protection Program Loans were several publicly traded companies. On April 23, 2020, the Department of Treasury and SBA issued additional guidance for Paycheck Protection Program Loan applicants stating that it would be “unlikely that a publicly traded company with substantial market value and access to capital markets will be able to make the required certification [that current economic uncertainty makes the loan request necessary to support its ongoing operations] in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification.” In addition, the April 23, 2020 guidance provides that loan applicants who return their Paycheck Protection Program Loan by May 7, 2020 will have been deemed to have made the above certification in good faith. 

On April 28, 2020, the Department of Treasury and SBA issued additional guidance clarifying that the guidance that the SBA previously issued on April 23, 2020 (excerpted above) also applies to privately held businesses. On May 5, 2020, further guidance was issued that extended the safe harbor repayment deadline from May 7th to May 14th and the SBA indicated that prior to May 14, 2020, the SBA would issue additional guidance that would clarify how the SBA will review a borrower’s certification that the loan was necessary to support its ongoing operations. In addition, the SBA has stated that it will review individual Paycheck Protection Program Loan files for all loans in excess of $2 million, in addition to other loans as appropriate. 

UKS will continue to monitor this developing issue and provide updates as necessary. The UKS Covid-19 Response Team is standing by, ready to help you and your business with question or concerns regarding a wide range of legal issues relating to the Covid-19 pandemic. For further information on the Paycheck Protection Program, please contact Attorney John F. (Jef) Wolter or Attorney John J. Alissi

Attorney Wolter is a member of the Firm’s Commercial Lending & Banking Practice Group. In the commercial finance area, Attorney Wolter concentrates in the transactional representation of banks, financial institutions, and small business investment companies. Attorney Wolter may be reached at or at (860) 548-2645.  

Attorney Alissi currently serving as the Firm’s President, is a member of the Firm’s Commercial Lending & Banking Practice Group. Attorney Alissi represents commercial banks, finance companies and other debt and equity providers in all aspects of commercial lending. Attorney Alissi may be reached at or at (860) 548-2619.  

Updike, Kelly & Spellacy, PC would like to thank associate Michael J. Paciorek for his contributions to this client alert. 

Disclaimer:  The information continued in this material is not intended to be considered legal advice and should not be acted upon as such.  Because of the generality of this material, the information provided may not be applicable in all situations and should not be acted upon without legal advice based on the specific factual circumstances.