CLIENT ADVISORY: PAYCHECK PROTECTION PLAN AND FLORIDA FORECLOSURE MORATORIUM EXTENDED; AUTOMATIC FORGIVENESS PROPOSED

*ORIGINALLY CIRCULATED ON JULY 3, 2020*
Congress has voted to extend the deadline to apply for the SBA’s Paycheck Protection Plan (PPP) until August 8, 2020. The PPP had expired on June 30, despite over $130 Billion remaining unallocated when the program shut down. The bill extending the program must now be signed by the President.
A separate bill has also been introduced by the Senate Banking Committee that would automatically forgive PPP loans of $150,000 or less if the debtor submits a one page attestation form to the lender. The lender would be held harmless if the debtor’s attestation contained false information. The goal of this measure is to reduce administrative costs to both small businesses and lenders that are incurred when the debtor applies for forgiveness. According to Sen. Kevin Cramer, 85% of PPP loans extended were $150,000 or less, yet these loans received only 26% of $520 Billion loaned. He estimates the costs of applying for forgiveness at $2,000 for the small business and $500 for the lender. Sen. Marco Rubio has also called for a second round of aid for businesses that have already used up their PPP loans.
Equally significant this week in Florida, Gov. DeSantis issued an executive order extending the suspension of foreclosures and evictions until August 1, 2020. The moratorium has been in place since April 2 and was set to expire on July 1. The moratorium does not eliminate the obligation to pay rent or mortgages. Landlords may still issue eviction notices, but courts will not hold hearings on foreclosures and evictions, and sheriffs will not execute writs or court orders. The CARES Act also places a federal moratorium on foreclosures and evictions until July 25, 2020 for certain federal home loans and housing programs. Rep. Maxine Waters and Sen. Elizabeth Warren have each introduced bills that would extend the federal moratorium under the CARES Act through March 2021.
For further information or a consultation, please contact us at 305-200-8816 or at ahpaly@coradinlaw.com.

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Last Modified: July 23, 2020