Paycheck Protection Program Update for April 13, 2020
The Treasury released an updated Paycheck Protection Program FAQ today (click here to read). We expect that there will continue to be further guidance, processes, and procedures issued which we will continue to provide updates once available. Please feel free to pass these announcements along to your colleagues and they can click here to sign up for our newsletters.
Read morePaycheck Protection Program Update for April 11, 2020
Late last night, the Treasury released an updated Paycheck Protection Program FAQ (click here to read). Notably, it confirms that lenders do not need a separate SBA authorization for the SBA to guarantee a PPP loan. We expect that there will continue to be further guidance, processes, and procedures issued which we will continue to provide updates once available. Please feel free to pass these announcements along to your colleagues and they can click here to sign up for our newsletters.
Read morePaycheck Protection Program Update for April 8, 2020
Additional information has been released within the last 24 hours, including this updated Paycheck Protection Program Frequently Asked Questions (click here to access). Notably, the deadline to close loans has been extended to ten (10) calendar days from the date of loan approval. We expect that there will continue to be further guidance, processes, and procedures issued which we will continue to provide updates once available. Please feel free to pass these announcements along to your colleagues and they can click here to sign up for our newsletters.
Read more“Payroll Protection Loan Applications Start Friday” – Finance and Commerce – 2020
Originally published on “Finance & Commerce” Companies taking a hit from the COVID-19 pandemic can start applying for federal payroll assistance as soon as this Friday. The Paycheck Protection Program, created under last week’s CARES Act, will offer low-interest, forgivable loans that companies can use to maintain payroll and other essential expenses. The act, signed into law Friday, ordered the U.S. Small Business Administration to issue guidelines and regulations for the program within 15 days. On Tuesday, the agency announced initial guidance and published application materials. Companies of fewer than 500 employees, including sole proprietorships, can apply starting April 3, and independent contractors and self-employed workers can apply starting April 10. The new loans are unlike any federal program before in both the speed of their rollout and their simplicity for applicants, said Bruce Strong, state director for the Minnesota Small Business Development Centers. “These are unprecedented amounts of relief coming in the form of these bills, and the terms of the relief are staggering,” Strong said in an interview. “To think a business can get through this Payment Protection Program a forgivable loan up to $10 million … obviously has never happened before and likely will never happen again.” The actual amount for which a company is eligible is calculated at 2.5 months of payroll expenses, using the company’s average over the preceding 12 months, up to that $10 million, said Nick Jellum, an attorney and president at Stillwater-based Jellum Law who regularly works with lenders that provide SBA Express loans. Loan proceeds that are spent on eligible business expenses, including payroll, utilities, rent and mortgage interest within eight weeks will be forgiven, assuming the company maintains, or quickly rehires to, its pre-coronavirus level of employment and wages. Any amount not forgiven must be repaid within two years, the SBA announced Tuesday, at 0.5% interest. All SBA loans, including through the Payment Protection Program, will have all payments deferred for six months under a provision of the CARES Act championed by Minnesota Sen. Amy Klobuchar along with Sens. Chris Coons, D-Delaware, and Ben Cardin, D-Maryland. “I think it is a great program for not just borrowers but also lenders, and certainly employees,” Jellum said of the Payment Protection Program. “My biggest concern going into this was, is the government going to make the program attractive to lenders to participate in it? And the answer to that is absolutely, yes.” Among other enticements to lenders, compliant loans are fully guaranteed by the SBA. Furthermore, the bill sweetens the pot with processing fees, paid to lenders by the government, of at least 1% of loan value, or as high as 5% for loans of $350,000 and below. Applicants will not pay any fees. “This is really unheard of for SBA to actually pay lenders what would be considered an origination fee,” Jellum said, adding that he’s hearing from some banks that have not historically offered SBA loans but are exploring taking part in this new program. The processing fee will be the primary revenue stream for banks that process payment protection loans, since the interest rate is so low and so […]
Read moreJellum Law is pleased to announce James Keig as a Partner of the Firm!
James Keig has been a transaction attorney with Jellum Law since 2016, primarily focusing his practice on commercial loan transactions. Since joining the firm, James has assisted Jellum Law’s lender clients in closing nearly half a billion dollars of commercial loans. James is a 2010 cum laude graduate of the University of Minnesota Law School and received a B.S. degree in 2004 from Brigham Young University. In 2019, James was recognized as a Super Lawyers ® Rising Star. Join us in congratulating James as a Partner of Jellum Law at James.Keig@JellumLaw.com.
Read moreTable of Experts: Franchising Panel Discussion
The Minneapolis/St. Paul Business Journal held a panel discussion recently where Nick Jellum served as moderator. Read the full article here.
Read moreJellum becomes NAGGL Sustaining Member
Jellum has increased its membership with NAGGL to a Sustaining Membership – click here for more information.
Read moreJellum moderates SBA panel discussion
Nick Jellum was selected as a moderator for Minneapolis/St. Paul Business Journal’s panel discussion on SBA-lending. The article, Table of Experts – Exploring the SBA Lending Landscape, is featured in the Business Journal’s May 22, 2015 edition.
Read more2014 Legislative Session Update
This year the Minnesota legislature made some significant changes to laws which affect banking and lending. The following is a brief summary of some noteworthy changes adopted by the legislature during its most recent session: 1. Minnesota Public Benefit Corporation Act Effective January 1, 2015, new corporations can elect Public Benefit Corporation status upon initial incorporation and existing corporations will have the option to convert to Public Benefit Corporation status. Public Benefit Corporations, often referred to as B-corps, are a hybrid type of entity that fits somewhere between nonprofit and for-profit business entities. Minnesota’s B-corp legislation allows for two types of Public Benefit Corporations to be formed: General Benefit Corporations (“GBCs”) and Specific Benefit Corporations (“SBCs”). GBCs work toward a general positive impact while SBCs work toward a specific, self-defined cause. Directors and officers of both GBCs and SBCs have a fiduciary duty to not only maximize shareholder gain, but also to make decisions based on what will benefit the public in a way that aligns with their mission. What public benefit a Public Benefit Corporation has chosen to pursue could have a drastic effect on the entity’s future profitability and, for this reason, lenders considering loans to borrowing entities of this type will be wise to consider and understand the public benefit chosen when making lending decisions. 2. Minnesota Revised Uniform Limited Liability Company Act Effective August 15, 2015, all newly formed limited liability companies (“LLCs”) will be governed by the Minnesota Revised Uniform Limited Liability Company Act (the “Revised Act”). Additionally, from the initial effective date until January 1, 2018, LLCs that were formed in compliance with the prior law may elect to be governed by the Revised Act. One of the larger changes made by the Revised Act is that LLCs no longer must exclusively be managed by Managers. Under the Revised Act, they may also be managed by Members, or the Board of Governors. This distinction will be particularly important for lenders to keep in mind when determining who has the authority to enter into agreements on behalf of the LLC. As the Revised Act provides greater flexibility in LLC management options, lenders must be sure to pay extra close attention to the type of management chosen, and documented in an LLC’s governing documents, in order to determine the appropriate party to execute documents on behalf of the LLC. 3. Minnesota Foreclosure Mediation A bill was introduced this past legislative session which sought to impose new mediation requirements into the foreclosure process and afford foreclosure mediators certain powers and authority. This bill received strong pushback from multiple sources, including the Independent Community Bankers of Minnesota legislative committee, of which Nicholas Jellum of this office is a member, and ultimately did not pass. However, it is very likely that this bill will be introduced in the next legislative session. As such, lenders who routinely conduct residential mortgage foreclosures would be wise to keep this area of proposed legislation on their radars. 4. Extension of Small Servicer Exemption under Minn. Stat. § 582.043 Minn. Stat. § 582.043 was originally enacted following the 2013 legislative session and requires lenders […]
Read moreNick Jellum attending SBA Lending Technical Conference
Nick Jellum is attending the SBA Lending Technical Conference in Bonita Springs, Florida from May 6-8. For more information on the conference visit http://www.naggl.org or contact Nick for updates at Nick@JellumLaw.com.
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