CLIENT SPOTLIGHT: Factory Five Racing

Factory Five Racing was founded in 1995. Over the years they have grown from a start-up business in a small garage to become the world's largest manufacturer of "build-it-yourself" component car kits. They employ a full-time crew of about 40 people, and are located in Wareham, Massachusetts (about an hour south of Boston). They make their products right here in the USA, in the heart of New England where American manufacturing was born.
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CLIENT SPOTLIGHT: Luca + Danni

Fred and Danny Magnanimi grew up watching their father create beautiful, handcrafted jewelry in the family's Cranston, RI jewelry manufacturing business. When the boys grew up, Fred moved to New York and began working on Wall Street as an investment banker, while younger brother Danny, still enamored by the family business, stayed home. Increased competition from overseas businesses created significant challenges for the business, but Danny was confident he could find a way for the family business to evolve and thrive. This was his mission, this was his passion.
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        SBA Issues Additional Guidance on PPP Loan Certification Requirements

        On May 13, 2020, the SBA revised its frequently asked questions and added question #46 – “How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request?” In order to receive a PPP loan a borrower had to certify in good faith that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” The SBA has created a safe harbor whereby any borrower who, together with its affiliates, received a PPP loan of less than $2 million will be deemed to have made that certification in good faith. The SBA has determined that borrowers requesting less than $2 million “are generally less likely to have had access to adequate sources of liquidity” and are therefore eligible for the PPP loans. This should provide some comfort to those businesses that borrowed less than $2 million that the SBA won’t take the position that the certification was not made in good faith and the business was therefore not eligible for the loan.

        Additionally, for those borrowers who received loans greater than $2 million, if in the course of a review the SBA determines that a borrower did not have an adequate basis for making that certification the SBA indicated that it will seek repayment of the outstanding loan balance. In such instance, as long as “the borrower repays the loan after receiving notification from SBA, SBA will not pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning necessity of the loan request.” Accordingly, if a large loan has to be repaid the SBA is giving companies a window to repay the loans without subjecting such company to additional enforcement procedures.

        The additional guidance has not changed the requirement that at least 75% of the loan has to be used for eligible payroll expenses in order to obtain full forgiveness of the loan.

        A full version of the Paycheck Protection Plan Loans Frequently Asked Questions (FAQs) can be viewed here

        Partridge Snow & Hahn's Business Law Group is ready to answer further questions and to advise your business regarding PPP loans. For additional information and resources visit the firm's COVID-19 Advisory Group page.