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    NP Connects conversation with Davis, Burns, Morrissey and Nighan

    April 28, 2020

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    By Christopher Keefe and Philip Taub

    Nixon Peabody is bringing together leaders from a variety of backgrounds to share real-time perspectives on the coronavirus (COVID-19) pandemic. Here are takeaways from our April 23, 2020 NP Connects program.

    NP Connects brings together leaders from a variety of backgrounds to share real-time perspectives on the coronavirus (COVID-19) pandemic. 

    Our April 23, 2020 conversation included perspective from Wendell Davis (New England regional administrator, SBA), Matthew Morrissey (Principal & Chief Operating Officer, Fusion Cell), John Burns (CEO, TB12), Michael Klingshirn (Air Force Medical Officer and expert epidemiologist), and Morgan Nighan (Partner, Nixon Peabody). Click here to watch a recording of the session. 

    Below are takeaways from our most recent program:

    The SBA processed 10x its annual loan volume in two weeks. Some numbers:

    • There were 1.6MM loan applications nationwide
    • 87% of loans were for less than $350k
    • 4% of loans were in excess of $5MM
    • In Massachusetts, 47k loans were submitted and $10.3 billion was approved

    Demand for additional funding is great. There were 700–800k applications in queue at banks before the initial funding was exhausted and SBA expects a flurry of activity. The next round of funds will likely be exhausted in less time than the first. The $60 billion set aside for community banks will help small business owners. If your bank isn’t being responsive, then talk to multiple lenders including community banks and fintech companies that are approved PPP lenders. Get your documentation ready now.

    The program requires that loans must be spent on approved expenses (>75% on salaries/<25% on rent) by June 30. There is concern that businesses will have to bring employees back, even if there is no work for them, and then risk letting them go later. Unfortunately, that situation may apply to some businesses. Note that the PPP is not employee-specific so you don’t have to hire back the same employee that you let go previously.

    SBA has not issued guidance for loan forgiveness but it is expected that a formula will be created that reduces loan forgiveness if the 75% salary hurdle is not met. In the newly issued FAQ 31, the government states that if a borrower determines its loan was not necessary, they must return the money by May 7.

    The most challenging and stressful situations for business leaders involve making decisions based on imperfect and changing information. Make certain though that your decisions reflect your values. Working from home is difficult but seize the opportunities. A business tied to a physical location and service can begin creating blog posts and videos from home. Turn this challenge into an opportunity to add value to customers and create a sense of purpose among your employees. This will build a resilient and healthy team culture.

    As businesses begin planning to reopen, it will be some time before certain businesses operate as they once did because physical distancing will remain. Get help from those that have decades of experience dealing with pandemics around the globe if you are uncertain. Call a vet. Businesses need to evaluate floor plans and work space configurations. Will open floor plans finally be put to rest? Restaurant tables may be too close. Policies regarding uniform cleanliness and mask usage will need to be checked. Some of the responsibilities will fall to employers and employees. Some responsibilities will fall on customers. Make it known and visible that you have rights and responsibilities: stay home if you are ill. Wash your hands. Maintain physical distance. Cover your cough.

    TrendingCoronavirusNP Connects

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