Author: Milton Cross

Loan Details and Forgiveness

The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Loan Forgiveness

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The loan forgiveness form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
*    Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
*    Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan
*    Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
*    Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30
*    Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined
In addition, I have already seen much online criticism about the form and forgiveness process. (This is a partial list – I am sure many other discussions of the form and process can be found online.):

Click here to download the Paycheck Protection Forgiveness Loan Forgiveness Instructions and Application (–paycheck-protection-program-loan-forgiveness-application;

Moreover, no one should be surprised if changes to the form and rules are announced before the end of the period to apply for forgiveness, given the many changes announced already. For example, the notes to the FAQ’s on the program show how often it has already been changed. You should check the links in this message regularly for further updates – the rules have literally been created at the same time as the program has been rolled out. In particular, additional relief bills have been discussed in Congress which could affect PPP forgiveness, for example, by addressing the limits on rehiring employees in areas subject to a Stay at Home Order which makes such hiring difficult, if not impossible.
Nonetheless, I thought it worth sending you the link to the form, so that you and your accountant can begin to prepare what your bank lender will need to process your forgiveness application. You can also see where the implementation of the PPP program may not have matched its presentation – and discuss that concern directly with your lender. If you have questions on the PPP forgiveness (and recognizing that no one may yet have the answers, including the SBA), please contact Stanley Jaskiewicz at 215-241-8866 or, or Milton Cross at 215-241-8844 or

Successful investors know that deferring taxes today can lead to long-term profits.

The recent “Tax Cuts and Jobs Act” offers one new way to do just that – while creating jobs at the same time (

Under the new law, investments in areas designated as “Opportunity Zones” can win substantial tax benefits, including not only the deferral of taxes, but also basis adjustments and potentially a permanent exclusion of gain on sale of properties in such zones.

Although the program was created to “to spur economic development and job creation in distressed communities,” in the Philadelphia area, at least, those zones include some of the hottest neighborhoods for new development (

Even better, taxes on already-appreciated property in those zones can be rolled over into such an investment, to provide additional deferral.

A list of designated zones is online at  A detailed map of them is available at  A listing by county and zip code is at

Naturally, there are many details and regulations to parse, as with most tax benefits.

But the potential benefit can be well worth that effort – and expense.

For example, qualifying investments must be made through so-called “Opportunity Funds” – you can’t just buy a property in your own name in one of the zones with the intention of getting the tax benefit.

Attorneys Milton H. Cross and Peter D. Cripps of Spector Gadon & Rosen P.C.’s Corporate Law and Real Estate & Real Estate Litigation practice groups are keeping up with the new programs, as well as with the many new rules that are in the pipeline – including IRS regulations expected this fall.

Moreover, even though the program is new, there are already many resources available about it:

The Council of Development Finance Agencies also has a webinar about the program online:

For further information about how you can take advantage of this program, or whether a particular property is eligible for its benefits, please contact Milton H. Cross at 215-241-8811 or, or Peter D. Cripps at 215-241-8884 or


In the April, 2016 Recent Development, I referred to Representations and Warranties that should be included in the Sale and Purchase Agreement for the sale of a business. A Representation is an assertion of fact true on the date that the party makes the Representation.  A Warranty is a promise of indemnity if the Representation is inaccurate.

Buyer:  The Buyer wants comprehensive representations and warranties that are not qualified by knowledge or materiality.

Seller:   The Seller wants to narrow the scope of its representations and warranties and qualify by:

  • Materiality: qualifying the representation or warranty by materiality or what might cause a material adverse affect.
  • Knowledge: limiting the representation or warranty to the knowledge of certain individuals of Seller.
  • Disclosure: qualifying a representation or warranty with information disclosed on a disclosure schedule.

An example (there are many creative variations for each of these examples) of materiality, knowledge and disclosure follows.

Financial Statements. Seller has delivered to Buyer true, correct and complete copies of balance sheets and the related statements of income and of cash flows for the Company including its subsidiaries and partnerships for the period ended December 31, 2016 (including the related notes and schedules thereto) (the “Financial Statements”). To the best of Seller’s knowledge, each of the Financial Statements is complete and correct in all material respects, and has been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved and presents fairly the assets, liabilities, financial position, results of operations and cash flow of the Company as at the dates and for the periods indicated.

Survival of Representations and Warranties. All Seller’s representations and warranties contained in this Agreement or any other agreement, schedule, certificate, instrument or other writing delivered by Buyer, Company or Seller in connection with this transaction shall survive for (   ) years after the Closing Date, unless otherwise expressly stated herein.  If a party hereto determines that there has been a breach by any other party hereto of any such representation or warranty and notifies the breaching party in writing reasonably promptly after learning of such breach, such representation or warranty and liability therefor shall survive with respect to the specified breach until such breach has been resolved, but no party shall have any liability after such (     ) year period for any matters not specified in a writing delivered within such (    ) year period.

Absence of Certain Developments. Except as set forth on Schedule _____ hereto, since the date of the Financial Statements: (a) there has not been any material adverse change in the effect of the business or assets of the Company which would materially effect the business; (b) there has not been any damage, destruction or loss, whether or not covered by insurance, with respect to the assets of the Company; and (c) the Business of the Company has been conducted in ordinary course, consent with past practice.

Termination. This Agreement may be terminated and the transaction contemplated hereby may be abandoned at any time prior to the Closing Date as follows:

(a)  By the Buyer, upon a breach of Seller, or failure of Seller to perform in any material respect (which breach or failure cannot be or has not been cured within thirty (30) days after the giving of notice of such breach or failure), any representation, warranty, covenant or agreement on the part of the Company.

(b) To Seller’s knowledge, the Company has complied with all Environmental Laws and the Company has not received any notice alleging any violation of an Environmental Laws with respect to Company or the Seller’s Business or the Included Assets.  Any past noncompliance with Environmental Laws by or with respect to the Company or the Seller’s Business is identified by the Company on Schedule ____, and has been resolved without any pending, ongoing or future obligation, cost or liability. To Seller’s knowledge, there has been no Release of Hazardous Materials in violation of any Environmental Law on any property occupied or leased by the Company.

If you have any questions regarding how to best sell or buy a business, please contact Milton Cross at 215-241-8811.