Updates on PPP and EIDL Programs from the SBAFor your information some updates that I have received or heard about on the SBA Loan Programs:
- As of Friday the 3rd of April a new PPP application form was released. This application form is attached. You will notice on the form that when calculating the loan amount it now asks you the amount of 2.5 times your monthly salary plus your EIDL loan amount if you have filed for the EIDL and you know what the loan amount is before April 3. Why is this being added?? (some fact some are my assumptions based on conversations):
- Before April 3, since the PPP program was not available till the 3rd.
- I understand you are not required to add this loan amount. Some banks are saying differently at this time, but this will allow you to move your EIDL loan to a PPP loan from 3.75% to 1% but also from 30 years to 2 year term. You are required to pay off the EIDL loan when the PPP loan is received. This DOES NOT affect the Emergency EIDL grant. The EIDL grant is separate and does not have to be repaid if used for business operating expenses. My suggestion as a mentor is not to mention this to mentees since most of Texas did not apply for EIDL loan before the 3rd and definitely did not know the loan amount at this time. My reasoning for sharing is to make sure you are aware if asked. The bank will be the final decision maker on what is required
- As of last Friday, when applying for a PPP loan, you are not allowed to add your people that are 1099. The reasoning for this is because your 1099 people can apply on their own for a PPP or an EIDL.
- Also with the PPP loan any loan forgiveness must consist of at least 75% being payroll costs
- SBA has expanded the eligibility for requirements for both loans to include religious nonprofits. Please see this link for more details. https://www.sba.gov/
document/support–faq- regarding-participation-faith- based-organizations-ppp-eidl
- I have talked to a few companies/mentors/others and the timeframe for the EIDL grant does not seem to be happening in 3 business days as of right now. If anyone knows of a company that has received the EIDL grant already please let us know and the timeframe of receipt if you can
- As we all know, by listening to the news or reading newspapers/articles, there is lots of confusion and frustration by the small business owner around acquiring a PPP loan. Unfortunately this will be rocky for a while Some things to consider here”
- Make sure these companies have applied for the EIDL loan and grant
- Banks are only working with customers that have a business relationship with the bank and not just a personal account. Talking to a few companies I have found out they just have personal accounts not business accounts. Not sure that was a wise decision before the virus for tax, tracking revenue and expenses, etc. Unfortunately that is coming back to hurt them. In the future in mentoring we should be encouraging companies to open a business account if they are able.
- Here is the link to determine the SBA sponsored lenders by zip code. www.sba.gov/
paycheckprotection/find To be realistic it probably will still be tough to find a lender for the next week or so until the lenders streamline their understanding and process, plus the SBA is working hard to add more lenders immediately. They need to keep checking with the lenders.
- Small Businesses may have the fear that money is running out before they get their application into the system. The Federal Reserve, announced today, that they will be buying the PPP loans from the banks to provide the banks more flexibility to process more loans. The Federal Reserve will be releasing more information about this program this week
- I have attached the latest version of the presentation we have been using for our webinars trying to keep this updated with the latest changes.
- We have had two webinars on the SBA loan process this week and the attendance is trending down on these events though both were still over 60 companies. My hope/thought is the high demand we are seeing for menotring around the SBA loan program will be trailing off in the next two weeks.
Here are some FAQ. Click Here!