Author Archives: BCGL Law

UPDATE (March 25, 2020): 

As announced by Governor Wolf late this afternoon, the Commonwealth of Pennsylvania has made available a $60 million dollar loan fund to Pennsylvania businesses that have already felt, or are vulnerable to, adverse economic impact resulting from COVID-19. The loan fund will be administered through the Pennsylvania Industrial Development Company (PIDA) and will be locally administered on a county-by-county basis. For Lancaster County, applications will only be accepted through the Lancaster Economic Development Company (EDC). Please visit the Lancaster EDC’s website for complete details. A brief summary of the highlights of the loan program are as follows:

 

  • Loan amounts of up to $100,000, subject to certain limitations based on size of business and total expenses incurred by the business during 2019 and the first portion of 2020
  • Terms of loans will be 36 months
  • Interest rates, in most cases, will be 0% (in some cases, may be 2%)
  • 12-month interest only payments, followed by amortizing payments over 12-year period and due in full at end of 36 month term
  • Will be secured by UCC filing on all assets of business – but security interest may be subordinate to the existing primary commercial financing institution
  • The loans may ONLY be applied for through the Lancaster EDC via email at the designated address: apply@edcfinancecorp.com
  • Available only to for-profit businesses
  • Certain financial covenants and restrictions may apply which will limit the amount of loan funds available to a business under this program, but they do not appear to be overly restrictive in most cases

 

Financing is available on a first come- first served basis, so we recommend anyone that is in need and is considering alternative financing sources should apply as soon as possible. Once the loan funds are expended, there is no guarantee it will be replenished or increased

 

ORIGINAL ARTICLE (March 23, 2020): 

While we can’t yet accurately predict all of the impacts of Governor Wolf’s Executive Order issued on March 19, 2020 -- ordering the closure of all businesses deemed “non-essential” by the Order, related chart and other materials – among the negative impacts on businesses will be the struggle to meet their short-term operating cash needs with declining cash flow. We expect that a more complete picture of the emergency and other financing alternatives available to businesses in the aftermath of COVID-19 and the Governor’s Executive Order will emerge over the next few weeks and months. We will continue to monitor the status and availability of the various emergency tools and relief being contemplated to combat the negative financial impact on businesses, but we also understand the importance of decision makers having accurate and up-to-date information upon which to rely in the short-term.

 

Based on what we know:

 

  • WHAT SHOULD I DO IF MY BUSINESS HAS OUTSTANDING BANK FINANCING?

If you have an existing relationship with a bank, you should contact your relationship manager to inquire as to any emergency relief they may be offering.  Some lenders (nationally, regionally and locally) are proactively offering 90-day principal payment deferments (i.e. requiring only interest only payments during the deferment period), while others are considering deferment requests on a case-by-case basis.  Obtaining a principal deferment can be a quick way to conserve operating cash during the deferment period.  If you have questions or would like our advice on how and when to make a deferment request, please feel free to contact us.

 

  • IS SHORT TERM WORKING CAPITAL FINANCING AVAILABLE?

While you may always reach out to your existing lender to request short-term working capital term financing, if your lender isn’t willing to provide that financing or if you don’t presently have a commercial lending relationship, the United States Small Business Association (SBA) is offering Economic Injury Disaster Loans to eligible businesses to pay fixed debts, payroll and other bills that can’t be paid due to the impact of COVID-19.  The loans are being offered at fairly low, fixed interest rates – 3.75% for for-profit businesses, and 2.75% for non-profit businesses – in amounts of up to $2,000,000, and for a term of up to 30 years, all as determined based on the particular circumstances facing the business.  The most important criteria for these loans – that the state in which the business is located be established and declared as an effected area – has already been satisfied when Pennsylvania was declared eligible effective as of March 19, 2020.

 

More information on the SBA programs are available on the following links:

 

SBA Economic Injury Disaster Loan information: https://disasterloan.sba.gov/ela/Information/EIDLLoans

 

You may apply for an SBA Economic Injury Disaster Loan by clicking the following link:  https://disasterloan.sba.gov/ela

 

The Small Business Administration is offering a webinar on their new emergency loan opportunities on Wednesday, March 25th from 10:30 – 11:30 a.m.  More information and registration is available here: https://pasbdc.ecenterdirect.com/events/26677

 

As always, if you have questions about your specific situation, please feel free to contact one of our attorneys.

Dear Clients and Friends,

 

As we head into the second week of Governor Wolf’s order mandating the closure of all “non-life sustaining businesses”, BCGL remains committed to assisting you, your business and your family to make the best decisions possible in light of the extraordinary circumstances which confront us all.

 

BCGL will continue to operate on a full time basis during this time. All BCGL attorneys and service providers are and will remain available via telephone and email to address your legal needs.

 

It has been announced that the Pennsylvania State Police will be participating in the enforcement of the Governor’s Order. Please contact us with any questions you may have with respect to your company’s eligibility to continue operations.

 

On Monday at noon, BCGL’s Employment Law Department will host a Webinar titled CORONAVIRUS UPDATE FOR EMPLOYERS. For information about how to join the webinar, please click here.

 

On Monday, we also expect to update you on:
-The Coronavirus Aid, Relief and Economic Security Act (CARE Act), as it works its way through the 
 legislative process; and
-Financing Alternatives and Strategies for Businesses.

 

Thank you for your continued trust in BCGL during this historic time. We wish you and your family the best.

 

                                               Sincerely.

 

                                               Rory O. Connaughton

                                               Managing Member

On Thursday, March 19, 2020, Governor Wolf issued an Order pursuant to his disaster emergency powers, directing the immediate closure of all businesses that are not life sustaining.  Enforcement of the Order was scheduled to begin on Saturday, March 21, 2020 at 12:01 a.m.

 

Following the issuance of the Order, the Wolf Administration created a process for businesses to request waivers from the closure mandate.  Due to the high volume of waiver requests received, the Administration is delaying enforcement of the Order, which will now begin on Monday, March 23, 2020 at 8:00 a.m.  The amended Order delaying enforcement is available here.

 

In addition to delaying enforcement, the Administration has also issued a revised list of life sustaining businesses.  The list was updated to conform with guidance issued by the Department of Homeland Security concerning Essential Critical Infrastructures.  The Administration has also issued a FAQ addressing questions about the Order. 

 

Requesting a Waiver

 

The Administration created an online waiver application for non-life-sustaining businesses to request an exemption from the closure Order.  According to the Administration, waiver requests will be reviewed by the Department of Community and Economic Development (DCED), and a response will be issued via email.  Businesses applying for a waiver must remain closed until a decision is made about their application. 

 

Businesses that are considering a waiver request are encouraged to contact BCGL prior to submitting their request. 

 

Download a PDF of this article here.

Dear Clients & Friends,

As you are likely aware, Governor Wolf has ordered the physical closure of all “non-life sustaining businesses” effective as of 8 p.m. this evening (March 18).


In anticipation of that order, BCGL has developed a firm wide plan that will enable us to avoid interruptions in service. Although our office is closed, our lawyers and other service providers will continue to work to meet the needs of our clients on a remote basis. Do not hesitate to contact us. We are here and will continue to meet your needs through this historic time.


We are also prepared to advise you on discrete issues related to the impact of COVID-19 including crisis management, human resources, business interruption issues, privacy and security issues, and contractual provisions implicated by the COVID-19 response including force majeure clauses.

If you are scheduled to meet with any of our lawyers or team members at the office, you will be contacted to make alternative arrangements.  


We wish for the continued health and safety of all of our clients, friends and team members and a return to normalcy for everyone as soon as possible.


Sincerely,

Rory O. Connaughton
Managing Member