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Messages - jackofall

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1
COVID-19 / Wuhan Novel Coronavirus Discussion / Re: Lakewood cases
« on: July 28, 2020, 01:31:45 PM »
Following

2
On The Road / Re: Hertz Master Thread
« on: July 20, 2020, 02:01:46 PM »


Got this email. No clue if this is something new or not.

3
Correct, but you can't take out a distribution from your assets or a bonus that is not in ordinary, for the next 30 years. As well as no loans from your business etc
If you regularly take out, it is  a non issue. Basically no funny business. Seems  (somewhat) fair.

4
It is a limitation on the EIDL borrower from transferring any of the EIDL borrower's assets (this would include any assets owned by the EIDL borrower including cash, cash equivalents, short-term and long-term assets, etc.) to basically anyone, whether a current owner of or partner in the EIDL borrower, or any company owned by an owner or partner, or any other company.  This would include any EIDL loan proceeds as well.  This language is there to prevent the depletion of the EIDL borrower's assets by the company owners/partners or any company owned by them, or any other unaffiliated company.  Note:  as shown below for regular 7a loans, they are not referring to assets used in the ordinary course of business.

 

SBA has a similar prohibition on its SBA 7a loans – see below for example of the language on non-PPP SBA 7a loans:

C. Borrower and Operating Company certify that they will not, without Lender’s prior written consent:

[ ] 3. Transfer of Assets - Sell, lease, pledge, encumber (except by purchase money liens on property acquired after the date of the Note), or otherwise dispose of any of Borrower’s property or assets, except in the ordinary course of business.

5
Very interesting. Thanks for posting
Welcome!
You know we have a "like" button ;)

7

My attorney received clarity from the SBA that this paragraph only refers to SBA funds.

8
There is another clause, at least on my docs.

LIMITS ON DISTRIBUTION OF ASSETS
• Borrower will not, without the prior written consent of SBA, make any distribution of Borrower's assets, or give any preferential treatment, make any advance, directly or indirectly, by way of loan, gift, bonus, or otherwise, to any owner or partner or any of its employees, or to any company directly or indirectly controlling or affiliated with or controlled by Borrower, or any other company.

9
Read closely again- it says:
Ineligible Uses of Loan
• Dividends or bonuses
• Payment to owners, unless for performance of services

There is another clause, at least on my docs.

LIMITS ON DISTRIBUTION OF ASSETS
• Borrower will not, without the prior written consent of SBA, make any distribution of Borrower's assets, or give any preferential treatment, make any advance, directly or indirectly, by way of loan, gift, bonus, or otherwise, to any owner or partner or any of its employees, or to any company directly or indirectly controlling or affiliated with or controlled by Borrower, or any other company.

10
I say lets say if it gets better in 2 years can I then take out more. or for the life of the loan I can not take out more?

the dry facts of the terms looks like this. but makes no sense for me
The language in the loan says no distributions, which is insane. I would love to see official clarity from the SBA on this.

11
Anyone has a legal opinion on this section?
I am waiting on a tax attorney to give me an officially opinion. Off the record he said there is no way that was the intent of the SBA.

12
When trying to submit the SBA app for EIDL I can't get past the beneficial owner screen, the next button is greyed out. Has anyone had this issue?
Make sure the top question iui s answered. Is the business owned by another business.

13
If using a 24 week period and the funds are used at 12 weeks you can't apply for forgiveness then? You need to wait until the 24 weeks are up?
No need to wait. Heard at yesterdays hearing with Munchin.

14
Amazing what Cross River did. 4th highest amount of loans in the country! Wow!!

15
Great beginners guide.

https://www.amazon.com/dp/1624144292/ref=cm_sw_em_r_mt_dp_U_fJt1Eb4223Z3J

The key to good SD is high quality unbleached bread flour.

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