Congress and President Donald Trump have approved an additional $310 billion for the Small Business Administration's Paycheck Protection Program. The SBA also has updated rules for PPP loans, with one change requiring businesses to make a good-faith certification that receiving a loan is a "necessity."
An attorney outlines five steps that can help contractors mitigate the effects that the coronavirus pandemic could have on their businesses. Those steps include reviewing active and upcoming contracts, cutting short-term project expenses, and considering sources of capital.
Surety Agents and Sureties Can Help Small Contractors Manage Risk Before bidding on jobs or signing contracts, small contractors should get expert information from surety agents and sureties on how to reduce risk. Working together, they can examine and mitigate possible risks from owners, general contractors, contract language, suppliers, labor issues, materials availability and pricing, weather, thieves and safety practices. Learn more here
Payment bond claim amounts must be traceable to an individual employee, according to the Utah Supreme Court, which overturned a lower court decision that the full amount sought under a bond claim was recoverable under state statute. The high court "made clear to claimants making claims on a payment bond that it is not simply a money grab for all costs and expenses on a project," two attorneys write.
The trend of heightened False Claims Act enforcement after government stimulus spending combined with the oversight mechanisms in the Coronavirus Aid, Relief and Economic Security Act suggests an upcoming increase in FCA investigations and enforcement actions, attorneys write. Businesses must ascertain their eligibility to receive federal relief funds, and they need "sufficient safeguards and oversight mechanisms to ensure they are complying with all post-loan requirements," the attorneys write.
Whether force majeure clauses in construction contracts offer relief in pandemic-related disputes depends on how narrowly such clauses are written, experts said. An attorney said that contractors should be on guard for a lack of allowances for project delays, and they should keep documentation regarding any delays to demonstrate the coronavirus pandemic's effects on their operations.
NASBP Blog: What surety bond producers and underwriters need to know about False Claims Act and enforcement risks of the Paycheck Protection Program
Due to the NASBP membership's concerns about the False Claims Act and enforcement risks of the US Small Business Administration Paycheck Protection Program, NASBP has organized a Virtual Seminar that will be held at 2 p.m. Eastern on Wednesday, May 6. NASBP Attorney Advisory Council Participant David Robbins and his colleagues at Crowell & Moring will address fraud and enforcement risks when applying for, accepting, using and seeking forgiveness for US SBA PPP funds. The NASBP Virtual Seminar will address key risk areas and risk mitigation techniques for bond producers, sureties and contractors. Read more.
New episode of NASBP podcast "Let's Get Surety" looks at managing the workplace during COVID-19
Get the most out of the NASBP Surety Pro Locator with a Premier Listing
The NASBP Surety Pro Locator connects NASBP bond producer agencies with prospective clients seeking surety relationships. These prospective clients can locate a NASBP bond producer by searching in a specific state or for a specific type of bond. All NASBP members appear as a Basic Listing in the Surety Pro Locator and can upgrade to a Premier Listing. The Premier Listing allows NASBP bond producer members to list the types of bonds they offer, offer additional company descriptions and contacts, showcase social media presence, and more. Premier Listings also sit higher in a state search than those agencies that choose not to upgrade their listing. Upgrade your agency listing to a Premier Listing for only $799 for a full year by completing the Locator Online Information Request Form. Contact Doug Smith via email or at 352-333-6015 for more information.
The construction industry received a greater share of Paycheck Protection Loans than other sectors during the program's first round of funding. Loans totaling $44.9 billion went to about 178,000 construction firms, accounting for more than 13% of first-round PPP funding.
Founded in 1942, NASBP is the association of and resource for surety bond producers and allied professionals. NASBP producers specialize in providing surety bonds for construction contracts and other purposes to companies and individuals needing the assurance offered by surety bonds.