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I didn't see proving harm by COVID19 as a requirement for applying for the loan. The loan is to minimize unemployment claims. Without the loan I would've been l
by cannaceo 7y ago
I didn't see proving harm by COVID19 as a requirement for applying for the loan. The loan is to minimize unemployment claims. Without the loan I would've been looking to make proactive staff cuts immediately despite not being dramatically impacted by COVID19. With the loan I feel comfortable keeping my workforce employed. My understanding is the requirement to not pay back the loan is that you keep 75% of your staff employed but we will see what the SBA and banks require as part of their loan forgiveness criteria.
Another thing to note here is that despite not being harmed directly by COVID19 we are all suffering the indirect harm. Consumers are broke, supply chains are disrupted, air freight cost is sky high, etc.
- weixiyen 7y agoThe company applying for the loan is liable for fines if it gets audited and somehow it is shown that the relief was not 'necessary'. Not only that but the signatory is also exposed to the risk of imprisonment. The language in the terms of the loan is far too ambiguous for anyone that's not in a life-and-death situation to take on the risk imo.
- texasbigdata 7y agoIt's literally on the form. There's criminal liability for mis-stating.
- cannaceo 7y agoI should have been more clear. I was not required to prove economic hardship by providing financials. The application makes you certify the following: "Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant." This is fairly ambiguous language putting most applicants in a defensible position regardless of firm performance over the next 6 months. There was a lot of litigation against lenders during the last QE so banks were more cautious about compliance. However, I was still not asked for tax returns, any financial statements, etc.