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  • PPP Loans Under $2 Million Get A Significant Waiver From SBA

    PPP Loans Under $2 Million Get A Significant Waiver From SBAIf your company received a loan of less than $2 million under the Paycheck Protection Program, the new message from the Small Business Administration is that you're OK.In an addition to its lengthy list of FAQs, the SBA said Wednesday that all loans granted under that dollar threshold will be viewed as having met the "good faith" standard necessary under the PPP.The clarification comes after Treasury Secretary Steve Mnuchin said in April that the SBA would be reviewing PPP recipients who received more than $2 million to be sure that they needed those funds given their large size. In particular, public companies that received the funds have been ordered to give them back. The sole known public transportation company that received one, Evo Transportation & Energy Services, had not indicated by Thursday whether it was returning its $10 million. (It had disclosed the receipt of the loan in an 8-K filing with the Securities & Exchange Commision in late April. No subsequent 8-K filing announcing the return of the funds has been filed)."Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith," the SBA said in its updated FAQs.Statistics released by the SBA for round 2 of the PPP, which began April 27, showed that just over 19% of the loans were over the $2 million cutoff, which means more than 80% don't need to worry about the certification.The law firm of Scopelitis Garvin Light Hanson Feary sent out a notice on the change, laying out the concern that some smaller borrowers under the PPP faced. "Many PPP borrowers have been struggling with the new SBA mandate that borrowers revisit their loan application certification that ‘[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant,'" Scopelitis said in its Law Alert. The law firm noted that the mandate was not part of the original CARES Act that set up PPP, but was handed down later "in response to much negative publicity surrounding high profile borrowers."The $2 million threshold and the need to certify the need for those funds if a company got more than that is leading some loan recipients to give back the money. The deadline for doing that without triggering a "good faith" investigation was Thursday but has been pushed back to Monday."SBA has determined that this safe harbor is appropriate because borrowers with loans below [the $2 million] threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment than borrowers that obtained larger loans," the SBA said in its FAQs. "This safe harbor will also promote economic certainty as PPP borrowers with more limited resources endeavor to retain and rehire employees."The SBA also said the sheer number of loans under $2 million would be difficult to investigate for their good faith certification given the stretched resources at the agency. "This approach will enable SBA to conserve its finite audit resources and focus its reviews on larger loans, where the compliance effort may yield higher returns," the agency said.(There already has been discovery of potential PPP fraud involving a trucking company).   Through last Friday, the SBA had approved 2,571,167 loans under phase 2 of the PPP, disbursing approximately $188.9 billion. Companies with less than $10 billion in assets got 32% of the disbursed loans, while companies with more than $50 billion got 53%. The tranche between those two got 15%.See more from Benzinga * US Airlines Aim To Keep It Clean During COVID-19 * Today's Pickup: COVID-19 Gives Smaller e-Commerce Firms A Chance Against Amazon * Largest East Coast Retail Grocery Group Taps Americold For New Frozen Facilities(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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  • Want to invest like Warren Buffett? Buy and hold these ASX 200 shares

    warren buffett

    One of the simplest and arguably most effective investment strategies is buy and hold investing.

    This strategy sees investors buy the shares of quality companies with positive long term outlooks and hold onto them for as long as the investment thesis remains intact.

    This is a strategy that has been used by legendary investor Warren Buffett. And you can’t argue with his track record, can you?

    With that in mind, here are two top S&P/ASX 200 Index (ASX: XJO) shares that I think would be quality buy and hold options:

    Nanosonics Ltd (ASX: NAN)

    The first buy and hold option to consider is Nanosonics. It is best-known for its trophon EPR disinfection system for ultrasound probes. It has been growing its installed base at a rapid rate over the last few years and has continued this trend in FY 2020. During the first half it increased 17% on the prior corresponding period to 22,500 units. This is still well short of its addressable market of 120,000 units.

    Which is positive for two reasons. As well as benefiting from unit sales, Nanosonics earnings lucrative recurring revenues from the consumable products the system requires. Consumable and service sales were up 40% to $34.1 million in the first half. This represents 70% of its total sales during the period. As its market share grows, so too will these sales. Combined with the impending launch of several new products, I believe the future is bright for Nanosonics.

    REA Group Limited (ASX: REA)

    I think REA Group would be a great buy and hold option. I’ve been very impressed with the way the realestate.com.au operator can still deliver earnings growth in the toughest of trading conditions. This was evident in its third quarter update which revealed a 1% increase in revenue to $199.8 million and an 8% lift in EBITDA to $119.6 million. This was despite a 7% decline in listings during the quarter.

    While listings volumes are likely to remain subdued for the immediate term, when conditions do improve I expect REA Group’s earnings growth to accelerate. So with its shares down 23% from their 52-week high, now could be an opportune time to snap them up.

    And don’t miss out on these top stocks which have been sold off and could be great buy and hold options now.

    5 cheap stocks that could be the biggest winners of the stock market crash

    Investing expert Scott Phillips has just named what he believes are the 5 cheapest and best stocks to buy right now.

    Courtesy of the crashing stock market, these 5 companies are suddenly trading at significant discounts to their recent highs… creating what could be incredible opportunities for bargain-hungry investors.

    Simply click here to scoop up your FREE copy and discover the names of all 5 cheap shares to buy now… before the next stock market rally.

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    Returns as of 7/4/2020

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    James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia has recommended Nanosonics Limited and REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Want to invest like Warren Buffett? Buy and hold these ASX 200 shares appeared first on Motley Fool Australia.

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  • Take advantage of ASX share market volatility

    stock market chart volatility

    I think it’s important to take advantage of ASX share market volatility when we can.

    Volatility is a key feature of shares. Each day there are different buyers and sellers. Obviously there will be different views about what price people are willing to buy and sell at.

    This coronavirus period of time has seen some of the strongest volatility in decades. I think it’s important to take advantage of the lower share prices. Collectively, investors are only willing to sell their shares at lower prices when there’s something to actually worry about. And there’s always something to worry about. Eventually that particular worry will pass, just like the GFC. 

    The price we pay for our investments is the biggest factor for deciding our future returns. If you can buy during periods like this when prices are a lot lower then you’ll boost your future returns significantly.

    These low share prices don’t last forever. Just look at how the ASX share market volatility has lowered and prices have recovered strongly since 23 March 2020 even though the actual economic numbers like unemployment just get worse and worse.

    What ASX shares on the share market are opportunistic buys due to volatility?

    A number of exciting shares like Pushpay Holdings Ltd (ASX: PPH) were a lot cheaper a few weeks ago, but I wouldn’t describe those shares as opportunistic any more. They’re still solid buys though.

    I think ASX share market volatility have made these shares buys: diversified property business Brickworks Limited (ASX: BKW), water entitlement business Duxton Water Ltd (ASX: D2O) and investment business Magellan Global Trust (ASX: MGG).

    Plenty more investment opportunities

    Those few named ideas aren’t the only shares that could be great buys today. These top ASX shares could be wonderful cheap buys right now.

    Our experts at The Motley Fool have just released a FREE report detailing 5 shares you can buy now to take advantage of the much cheaper share prices on offer.

    One is a diversified conglomerate trading 40% off it’s all time high, all while offering a fully franked dividend yield of over 3%…

    Another is a former stock market darling that is one of Australia’s most popular and iconic businesses. Trading at a significant discount to its 52-week high, not only does this stock offer massive upside potential, but it also trades on an attractive fully franked dividend yield of almost 4%.

    Plus, this free report highlights 3 more cheap bets that could position you to profit in 2020 and beyond.

    Simply click here to scoop up your FREE copy and discover the names of all 5 cheap shares.

    But you will have to hurry because the cheap share prices on offer today might not last for long.

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    Returns as of 7/4/2020

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    The post Take advantage of ASX share market volatility appeared first on Motley Fool Australia.

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