The previous post on the third round of funding for the Paycheck Protection Program covered the big stuff – the necessity test, qualifications for taking out a second loan, and the latest attempt at simplified forgiveness. Here in Part 2, I’ll be going over the finer details, including EIDL advances, expense deductions, the ERTC, and other notes and restrictions.

Covered Period

The Act will permit you to select your covered period (i.e., the period in which you must spend the PPP loan funds).  The covered period must be greater than eight weeks and not more than twenty-four weeks beginning from the date of disbursement.
Continue Reading Paycheck Protection Program Take Three? – Part 2

2020 has certainly been an interesting year.  Thankfully, it is ending with a new federal act aimed at relieving businesses, industries, and individuals affected by the COVID-19 pandemic.  It is known as the Consolidated Appropriations Act, 2021.

This Act consists of more than just a stimulus package. It also contains funding for the government through most of 2021.  My previous post, Finally, More Money! – The Consolidated Appropriations Act, 2021, covered a broad overview of the stimulus package.  This post will discuss the third round of the popular Paycheck Protection Program (PPP).

While this is the third round of funding for the PPP, it is only the second time a single business may apply for that funding. The second round of PPP funding went to qualifying businesses that missed out on money the first time.
Continue Reading Paycheck Protection Program Take Three? – Part 1

It must be a Christmas miracle.  After deadlocking this summer and delaying over the weekend, the United States Senate and the House of Representatives have agreed to additional aid to those impacted by the COVID-19 pandemic.  The President has also signed this new bill, known as the “Consolidated Appropriations Act, 2021” (the “Act”).

The Act is approximately 5,000 pages long, so a detailed analysis will take some time.  Therefore, this post is not intended to be comprehensive, and many items are still being hammered out. Here’s what we know so far:

The Bare Bones

The Act consists of $900 billion in aid and was a compromise between the two parties.  As such, it is not perfect. There are some aspects of the Act that both sides of the aisle are criticizing.
Continue Reading Finally, More Money! – The Consolidated Appropriations Act, 2021

2020 has been a year of adapting, readapting, and then adapting again in an effort to combat a global pandemic.  Those in education have been hit particularly hard.  Most educators and administrators have had to develop multiple contingency plans, often with little warning.

The Lancaster Bar Association is concerned about the impact these unprecedented times are having on educators and the increased responsibilities they have been taking on.  Our teachers and administrators are putting themselves at risk daily to ensure the children of our community continue to get the education they need.  Some, like Manheim Township counselor Alexandra Chitwood, have even lost their lives.
Continue Reading Lancaster Bar Association is Offering Classroom Heroes Free Living Wills

As we enter another month of the Covid-19 pandemic, the stories of people becoming gravely ill without a Healthcare Power of Attorney and Living Will continue to mount.  Recently, a doctor on a Covid-19 unit shared a story about a young man who required a ventilator to breathe.  He never expressed to his family what his wishes would be in this situation, leaving them to guess.

To further complicate matters, his parents did not agree on a course of action for their son.  It added strife and stress to an already unimaginably hard situation.  This particular stress could have been avoided if the young man had a Health Care Power of Attorney and Living Will. Continue Reading What is a Living Will, and Why do I Need One?

This time of the year, our thoughts turn to family and friends.  Maybe we reflect on the past year or look forward to the next.  For association boards and property managers, these happy thoughts are interrupted by questions about snow removal. When do we call snowplows? What kinds of deicers should we use? And does our association have any liability for slips and falls?
Continue Reading HOA Snow Removal: Your Questions Answered

It’s only been a few hours since the Governor and the Secretary of Health announced that the state is imposing a limitation on the sale of alcohol on Wednesday, November 25, 2020.  What does this mean and who does it apply to?

On-Site Alcohol Consumption Must End at 5:00 pm

The Order provides that all sales or service of alcohol for on-site consumption must cease no later than 5:00 p.m. on November 25th.  It goes on to provide that no customer may possess alcoholic beverages within the business after 6:00 p.m. This includes:
Continue Reading Restriction of On-Site Alcohol Sales for Wednesday, November 25

On October 29, 2020, Governor Wolf signed House Bill 2438, Expanding Broadband Access with Existing Infrastructure, into law.  This new bill will make it easier for rural residents of Pennsylvania to access high-speed broadband internet by changing the rules for easements. Continue Reading Easing into Easements: PA Expands Access to Broadband Internet

On October 29, 2020, Governor Wolf signed into law House Bill 2370, which will permanently permit the use of remote notarization in Pennsylvania.  Before the passage of this bill, Pennsylvania did temporarily permit the use of remote notarization during the COVID-19 pandemic.

What is Remote Notarization?

Remote notarization is the notarizing of legal documents while the client is not physically in the presence of the notary by utilizing technology.  The client still personally appears before the notary using a Zoom-type program where the notary can see and hear the client.  Under prior law, the notary and the client had to be in the same physical location while the client signed the legal document.

The notary must still validate the client is who they say they are by

  • using personal knowledge (the notary knows the client)
  • relying on an affidavit from a credible witness, or
  • by using technology tools designed to confirm the identity of the client. If using this form of validation,, the notary must use two different types of identity proofing.  Identity proofing is a service provided by a third party. Typically the program the notary is using to conduct the remote notarization, such as SafeDocs, will have identity proofing integrated into their system.

The notary must be able to identify the record that they will be notarizing and watch the client execute the document.  The certificate attached to the notarized document must also state that the notary was completed by “means of communication technology.”

Should I Use a Remote Notary?

Using a remote notary is not without its fair share of problems.  Such problems include:

  • Lack of personal information available in public or private data sources. If you have no or limited credit history, it is unlikely that you will be able to pass an identity proofing.  This will affect younger clients and clients who have no credit cards or mortgages.
  • Lack of technology. If the client doesn’t have a device with a camera and microphone, they won’t be able to utilize a remote notary.  Also, if the device the client does have is outdated, they might not be able to run the program for the remote notary.
  • Lack of internet. The client and notary must both have highspeed internet.   This will disadvantage clients who have no or limited access to internet.
  • Storage of notary records. A remote notary is required to store the audio-visual recording for at least ten (10) years.  This may create significant liability issues for notaries.  What happens if their computer crashes or is hacked?  Additionally, if storing in the cloud, there will be a cost involved to maintain that record.
  • Acceptance by the Recorder of Deeds. The Recorder of Deeds is not required to accept documents notarized remotely for recording.  This will create confusion as there are sixty-seven (67) Recorder of Deeds Offices throughout the State.  It is likely that each Recorder will come up with their own policy and there will be a lack of consistency across the state.

In this rapidly evolving age of technology adaptations, Russell, Krafft & Gruber LLP is here to answer your technology-related legal questions.

Nichole Baer is an attorney at Russell, Krafft & Gruber, LLP, in Lancaster, Pennsylvania. She received her law degree from Stetson University, College of Law and practices in several areas, including Business, Commercial Real Estate, Estate Planning, and Estate Administration.

Phase 3 of the Lancaster Small Business Recovery & Sustainability Fund opens on Monday, November 9, 2020, at 8:00 a.m. and will remain open until Friday, November 13, 2020, at 5:00 p.m.  Recovery Lancaster is a grant program that does not award grants on a first-come, first-serve basis. The Phase 3 funding cycle consists of $10,000,000 that the federal CARES Act distributed to Lancaster County. Moreover, Recovery Lancaster will distribute $3,500,000 of this amount to businesses with twenty (20) or fewer employees.

Who qualifies?

To apply, the applicant must be a business, a 501(c)(3), or an agricultural entity that operates in Lancaster County and employs 500 or fewer employees.  The determination of employees is based on a “headcount” and not on FTE equivalents.  Part-time employees are each considered one employee for this calculation.

The headcount does include the owner of a business if the owner works in the business, but it does not include independent contractors.

Applicants must show that they have sustained a revenue loss of 40% or greater when comparing revenue from April-September 2019 to revenue received April-September 2020.

What are the restrictions or disqualifications?

Applicants may receive funding assistance even if the business has received other grants and loans from other sources, such as PPP, PIDA, Lancaster City Emergency Fund, Phase I or Phase 2 of the Small Business Recovery and Sustainability Fund, or other such grant programs.

Passive income businesses, such as residential and commercial landlords, are ineligible to apply.  Entities receiving (or who will be receiving) direct allocation of funds from the county, such as libraries, Fire Stations, and EMS, are also ineligible.

Moreover, a business may be ineligible if an owner has been charged, arrested, or incarcerated for a felony.  If an applicant may be disqualified for these reasons, you should check the program for specific restrictions.

How can I apply?

The application will be located at http://www.recoverylancaster.com, and applicants are strongly encouraged by the Fund to fill out the application online.

To apply, the applicants must provide documentation, including but not limited to:

  • EIN or SSN (if reporting as a sole proprietor)
  • NAISC Code
  • Entity name
  • Summary of Goods and/or Services produced
  • Summary of Proposed Use of Working Capital
  • April-September 2019 Revenue Statement
  • April- September 2020 Revenue Statement
  • 2019 Gross Revenue
  • 2019 Net Profit (or Loss)
  • 2019 Total Operating Expenses
  • 2019 Depreciation Included in Operating Expenses
  • Year the business was established
  • The highest number of employees reported from April 1, 2019 – April 1, 2020
  • Copies of the business’s 2019 federal tax return
  • Information regarding how COVID-19 has impacted the business operations and/or working capital

 Is there anything else I should know?

Recipients can use the funds to cover necessary working capital costs.  Those costs include payroll, rent, mortgage, supplies, and operating expenses (including safety retrofits) but do not include owner compensation.

Grant funds cannot be used

  • to pay compensation to shareholders, partners, or sole proprietors
  • to pay back loans to pay owner compensation, or
  • to pay back loans to related parties such as shareholders, partners, or family members.

The maximum cap on the amount awarded to a business will be based on its number of employees.  The maximum caps are:

Company Size Max Award for 1st Awardee Max Award for 2nd Time Awardee
1-20 Employees $20,000 $10,000
21-50 Employees $50,000 $25,000
50-100 Employees $80,000 $40,000
101-250 Employees $125,000 n/a
251-500 Employees $175,000 n/a

Recovery Lancaster will release some information, including the legal name and d/b/a name of the applicant, the municipality the applicant is located, the funding amount requested, and the score result given by the funding committee.

However, Recovery Lancaster will not publicly release revenue amounts, operating expenses, the purpose of the funding, or whether funding was obtained.

Laws and regulations remain a moving target for COVID-19-related relief.  As such, the laws and regulations discussed today may change soon.  Please consult with a legal professional regarding the Lancaster Small Business Recovery & Sustainability Fund if you have any legal concerns.

Nichole Baer is an attorney at Russell, Krafft & Gruber, LLP, in Lancaster, Pennsylvania. She received her law degree from Stetson University, College of Law and practices in several areas, including Business, Commercial Real Estate, Estate Planning, and Estate Administration.