To Our Clients, Partners and Friends,
We are writing with updates as circumstances change, we learn more, and there is further clarity from various stakeholders. We contacted a number of leaders of lending institutions in the Central Ohio market to understand how their institutions are addressing the fallout for landlords and tenants. We spoke with compliance executives to gauge the environment and guidance they are receiving from regulators. The general consensus is that lenders and regulators are collaborating, recognizing that we are all in this mess together.
Regulators have been forward-thinking, proactive, and flexible in encouraging lenders to work through this unprecedented event. For property owners that are in good standing, many lenders are offering 60 to 90-day deferments on mortgage payments when requested by the borrower. The 60 to 90-day deferment would likely be added on to the length of the loan, and no payments will be due until the 60 to 90-day period has passed. We are told that this can be initiated with a phone call to the borrower’s primary contact.
Given the volume of requests, the lender will follow up later with a short amendment to the loan agreements. These provisions are intended to provide a period of time for everyone to catch up. Lenders are telling us that they are not reviewing leases or amendments as there is simply not enough capacity in the system. Lenders also indicated that there are direct to business lending options, with reasonable underwriting standards and terms through SBA.gov. Every circumstance is unique and should be thoughtfully reviewed by legal professionals.
We are advising our clients to investigate these opportunities. Documentation, including times and dates of conversations with lenders and tenants, is paramount. We encourage you to be thoughtful and empathetic and also understand that there may be unintended consequences to any action you take. Documentation with lenders and tenants should be thoroughly vetted prior to signing by any party.
Please let us know if we may help. This too shall pass. We are strong together. Please stay healthy and safe.
Guidance on Preparing Workplaces for COVID-19 from U.S. Department of Labor Occupational Safety and Health Administration
Ohio Resources for Economic Support: this includes support for families, small businesses and banking updates.
Help for Businesses:
CARES Act: The Small Business Administration (SBA) and the Department of Treasury has begun releasing the information that will guide the programs created through the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
- CARES Act Flow Chart for Small Businesses
- Frequently Asked Questions on Small Business Loans in Coronavirus CARES Act
Paycheck Protection Program: The Paycheck Protection Program prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion toward job retention and certain other expenses.
Small Business Association: Small business owners in all U.S. states and territories are currently eligible to apply for a low-interest loan due to Coronavirus (COVID-19)
The Economic Injury Disaster Loan is directly from the Small Business Administration (SBA). The SBA is offering up to $2 million in assistance to pay fixed debts, payroll, accounts payable and other bills. The loan must be repaid but can be deferred for up to one year. Apply here.
- A Step-by-Step Guide on How to Apply for an SBA Economic Injury Disaster Loan
- The Economic Injury Loan Emergency Advance is an emergency advance of $10,000 for small businesses. To access the advance, you first apply for an Economic Injury Disaster Loan mentioned above and then request the advance. You do not need to pay back the advance if it’s awarded to you (you still need to pay the loan).
U.S. Chamber of Commerce: Coronavirus small business guide
Pay Benefits for Reduced Hours: SharedWork Ohio allows workers to remain employed and employers to retain trained staff during times of reduced business activity. The Ohio Department of Job and Family Services provides eligible individuals an unemployment insurance benefit proportionate to their reduced hours.
Ohio Bureau of Worker’s Compensation: Ohio’s Bureau of Workers’ Compensation (BWC) system is the exclusive provider of workers’ compensation insurance in Ohio and serves 249,000 public and private employers. To help businesses facing difficulties due to the COVID-19 pandemic, the Ohio BWC is announcing the deferment of insurance premium installment payments for March, April and May until June 1, 2020.
Grace Period for Health Premiums: All health insurers are required to provide the option of deferring premium payments, interest free, for up to 60 calendar days from each original premium due date. This means that employers can defer their premium payments up to two months, giving them some relief on costs, while keeping their employees insured.
Ohio Banker’s League: Customer assistance programs and measures by banks in Ohio.