Latest info on paycheck protection, business loans

 

As our state continues the process of re-opening, I wanted to provide you with a new small business loan update regarding the Economic Injury Disaster Loan (EIDL) Program and the Paycheck Protection Program (PPP) offered through the U.S. Small Business Administration (SBA).

EIDL

SBA has reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to all eligible applicants experiencing economic impacts due to COVID-19. Previously, the program was limited to agricultural applications for a period of time.

PPP

Recently, the President signed the PPP Flexibility Act into law. This legislation, which I helped introduce in the House, provides greater flexibility to businesses who need this money to get through this challenging time. You can read more about the changes here.

Unfortunately, for some First District businesses, the terms of the PPP had proven too inflexible for employers, employees, and lenders weathering the current economic storm. This bill allows forgiveness for expenses beyond the original 8-week covered period, relaxes restrictions limiting non-payroll expenses to 25% of loan proceeds, eliminates restrictions that limit loan terms to 2 years, ensures full access to payroll tax deferment for businesses that take PPP loans, and provides a rehiring safe harbor for businesses unable to rehire employees due to the effects of enhanced Unemployment Insurance.

I’ve included additional information below that I hope you will find helpful. If you haven’t yet had the opportunity, I’d encourage you to sign up to receive my newsletters and press releases.

I’m grateful to serve as your Representative. Our full staff remains available to help with any issues you may have, so please don’t hesitate to reach out.

Respectfully,

Jack Bergman

 

SBA’s Economic Injury Disaster Loans and Advance Program Reopened to All Eligible Small Businesses and Non-Profits Impacted by COVID-19 Pandemic

To further meet the needs of U.S. small businesses and non-profits, the U.S. Small Business Administration reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to all eligible applicants experiencing economic impacts due to COVID-19 today.

“The SBA is strongly committed to working around the clock, providing dedicated emergency assistance to the small businesses and non-profits that are facing economic disruption due to the COVID-19 impact.  With the reopening of the EIDL assistance and EIDL Advance application portal to all new applicants, additional small businesses and non-profits will be able to receive these long-term, low interest loans and emergency grants – reducing the economic impacts for their businesses, employees and communities they support,” said SBA Administrator Jovita Carranza.  “Since EIDL assistance due to the pandemic first became available to small businesses located in every state and territory, SBA has worked to provide the greatest amount of emergency economic relief possible.  To meet the unprecedented need, the SBA has made numerous improvements to the application and loan closing process, including deploying new technology and automated tools.”

SBA’s EIDL program offers long-term, low interest assistance for a small business or non-profit. These loans can provide vital economic support to help alleviate temporary loss of revenue.  EIDL assistance can be used to cover payroll and inventory, pay debt or fund other expenses.

Additionally, the EIDL Advance will provide up to $10,000 ($1,000 per employee) of emergency economic relief to businesses that are currently experiencing temporary difficulties, and these emergency grants do not have to be repaid.

SBA’s COVID-19 Economic Injury Disaster Loan (EIDL) and EIDL Advance

  • The SBA is offering low interest federal disaster loans for working capital to small businesses and non-profit organizations that are suffering substantial economic injury as a result of COVID-19 in all U.S. states, Washington D.C., and territories.
  • These loans may be used to pay debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact, and that are not already covered by a Paycheck Protection Program loan.  The interest rate is 3.75% for small businesses.  The interest rate for non-profits is 2.75%.
  • To keep payments affordable for small businesses, SBA offers loans with long repayment terms, up to a maximum of 30 years. Plus, the first payment is deferred for one year.
  • In addition, small businesses and non-profits may request, as part of their loan application, an EIDL Advance of up to $10,000. The EIDL Advance is designed to provide emergency economic relief to businesses that are currently experiencing a temporary loss of revenue. This advance will not have to be repaid, and small businesses may receive an advance even if they are not approved for a loan.
  • SBA’s EIDL and EIDL Advance are just one piece of the expanded focus of the federal government’s coordinated response.
  • The SBA is also assisting small businesses and non-profits with access to the federal forgivable loan program, the Paycheck Protection Program, which is currently accepting applications until June 30, 2020.

For additional information, please visit the SBA disaster assistance website at SBA.gov/Disaster.

SBA and Treasury Announce New and Revised Guidance Regarding the Paycheck Protection Program

The U.S. Small Business Administration, in consultation with the U.S. Department of the Treasury, issued new and revised guidance for the Paycheck Protection Program (PPP).  This guidance implements the Paycheck Protection Program Flexibility Act (PPPFA), signed into law by President Trump on June 5, 2020, and expands eligibility for businesses with owners who have past felony convictions.

To implement the PPPFA, SBA revised its first PPP interim final rule, which was posted on April 2, 2020.  As described in detail in our announcement on June 8, 2020, the new rule updates provisions relating to loan maturity, deferral of loan payments, and forgiveness provisions.

In addition, as an exercise of SBA’s policy discretion in furtherance of President Trump’s leadership and bipartisan support on criminal justice reform, the eligibility threshold for those with felony criminal histories has been changed.

The look-back period has been reduced from 5 years to 1 year to determine eligibility for applicants, or owners of applicants, who, for non-financial felonies, have (1) been convicted, (2) pleaded guilty, (3) pleaded nolo contendere, or (4) been placed on any form of parole or probation (including probation before judgment). The period remains 5 years for felonies involving fraud, bribery, embezzlement, or a false statement in a loan application or an application for federal financial assistance. The application also eliminates pretrial diversion status as a criterion affecting eligibility.

SBA issued revised PPP application forms to conform to these changes.  The guidance and revised application forms are available on SBA’s and Treasury’s websites.  SBA will issue additional guidance regarding loan forgiveness and a revised forgiveness application to implement the PPPFA in the near future.

Click here to view the new Interim Final Rules.

Click here to view the new Borrower Application.

Click here to view the new Lender Application.

Who Can Apply

The following entities affected by Coronavirus (COVID-19) may be eligible:

  • Any small business concern that meets SBA’s size standards (either the industry based sized standard or the alternative size standard)
  • Any business, 501(c)(3) non-profit organization, 501(c)(19) Veterans organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
    • 500 employees, or
    • That meets the SBA industry size standard if more than 500
  • Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location
  • Sole proprietors, independent contractors, and self-employed persons.

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