SBA Programs

6/11/2020 UPDATEPaycheck Protection Program Flexibility Act Signed Into Law June 5, 2020

• Extends the timeline to spend PPP funds and receive forgiveness from 8 to 24 weeks
  • New deadline is December 31,2020, as opposed to the June 30, 2020 deadline established in the CARES Act
• Reduces the 75% payroll ratio requirement to 60%
  • At least 60% of a PPP loan must be used for payroll costs to be eligible for loan forgiveness, overriding and replacing the 75% requirement established by the SBA. The remaining 40% can be used for non-payroll costs such as rent, mortgage interest, or utilities.
• Extends loan limit from 2 to 5 years
  • This measure sets a five-year minimum repayment term for any forgivable portions of PPP loans, overriding the two-year repayment term established by the SBA.
  • This provision only applies to loans issued after enactment of this bill, though borrowers and lenders would be allowed to modify existing loan terms.
• Allows a business receiving loan forgiveness to also defer payroll taxes, which was prohibited under the CARES Act.
• Extends the June 30 rehiring deadline and provides relief to businesses that are unable to rehire laid off employees.
  • Under current law, businesses must rehire employees by June 30. Now, a loan could be forgiven if the business can demonstrate that it is:
    • Unable to rehire a laid off employee;
    • Unable to rehire a similarly qualified employee before December 31, 2020; or
    • Unable to return to a pre-pandemic level of business activity due to compliance with social distancing, safety, or public health guidance related to the COVID-19 pandemic.

6/3/2020 UPDATE
At this time, the Small Business Association (SBA) loans have not made any major announcements. It is assumed that the following is still the case:

• The portal for the Economic Injury Disaster Loan (EIDL) program remains open for Agricultural businesses, and for those who meet the criteria below to re-apply as needed. For all others, the application remains closed at this time.
  • Interested in more information about how the government has been utilizing these funds? The SBA has provided a report with these details.
• The Paycheck Protection Program (PPP) was last re-opened on April 27, 2020 for applications. This process is completed through a lender – you will need to connect with your bank if you are still interested in applying for this program.
  • Already applied to the PPP? Our office has created a guide for helping you work through what to do now. Click here to review this critical information.
  • There is currently a bill in Congress that would extend the amount of time businesses have to spend PPP funds (currently only 8 weeks) – stay tuned for more information!
  • The SBA has a report regarding how the PPP funds have been disbursed to date. Click here if you are interested in learning more.

5/8/2020 UPDATE

EIDL Portal Opened for Ag businesses and Certain Non-Ag Businesses

Agricultural businesses may now apply for the Economic Injury Disaster Loan and EIDL Advance program on a limited basis.

For agricultural businesses that submitted an EIDL application through the streamlined application portal prior to the legislative change, SBA will process these applications without the need for re-applying.

Due to limitations in funding availability and the unprecedented submission of applications already received, the EIDL application portal will remain closed to non-agricultural businesses, with the following exception:

Non-agricultural businesses may re-apply to complete their original application if they meet the following criteria:

• The business completed an EIDL application prior to March 29
• The business received a confirmation number starting with “2″
• The business has not yet reapplied through the streamlined portal

Businesses that applied prior to March 29, received a confirmation number starting with “2,” and have not yet reapplied through the streamlined portal must reapply through this portal in order to be considered for an EIDL Loan or Advance.

Businesses that submitted their EIDL applications on March 30 or later and received a confirmation number starting with “3” will continue to have their applications processed on a first-come, first-served basis.

Apply through the SBA EIDL Portal here.

Paycheck Protection Program

SBA resumed accepting PPP loan applications on Monday, April 27, at 10:30 AM EDT. If you have already submitted a PPP application, your application will be processed on a first come, first served basis. If you have not yet applied, contact your lender to begin the application process. Find participating lenders here. If your lender is unable to accept PPP applications, please contact our office to find out which banks may still be accepting applications.

(New) SBA reminds borrowers to review carefully the required certification on the Borrower Application Form that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Any borrower who applied for a PPP loan prior to April 24, 2020 and repays the loan in full by May 14, 2020 will be deemed by SBA to have made the required certification in good faith.

(New) According to the U.S. Treasury, a borrower’s PPP loan forgiveness amount will not be reduced if the borrower laid off an employee, offered to rehire the same employee, but the employee declined the offer. To qualify for this exception, the borrower must have made a good faith, written offer of rehire, and the employee’s rejection of that offer must be documented by the borrower. Employees and employers should be aware that employees who reject offers of re-employment may forfeit eligibility for continued unemployment compensation.

5/1/2020 UPDATE:

New funds were approved for both the EIDL and PPP programs on 4/23/2020. Our understanding is that the SBA online portal for the EIDL program never re-opened, and it is presumed that funds are being used for applications already in the system. This status may change as funds are allocated, so we will keep you posted.

Applications are still being accepted for the PPP program. Contact your bank first to see if they are participating. If you need assistance in finding a lender let us know.

Details about each of these programs can be found below.

4/27/2020 UPDATE:

FRAUD ALERT!

Information from the SBA

Sophisticated fraud and scam attempts are on the rise in connection with federal SBA loans. If you are considering applying or are in the process of applying for the Paycheck Protection Program (PPP) or Economic Injury Disaster Loan (EIDL), please keep the following tips in mind:

• The SBA does NOT initiate contact with small businesses on any type of funding. If you are proactively contacted by someone claiming to represent the SBA, suspect fraud.
• If you are contacted by someone who promises to get you approval of an SBA loan but requires ANY payment up front or offers a high interest bridge loan, suspect fraud.
• The SBA has limits on the fees a broker can charge a borrower:
  • 3% – loans $50,000 or less
  • 2% – loans $50,000 to $1,000,000
  • An additional 1/4% on amounts over $1,000,000
  • Any attempt to charge more than these fees is inappropriate and should be reported.
• Keep an eye out for phishing attacks/scams utilizing the SBA logo. These may be attempts to obtain your Personally Identifiable Information (PII), or to install ransomware/malware on your computer.
  • If you are in the process of applying for an SBA loan and receive email correspondence asking for PII, ensure that the referenced application number matches your actual application number.
  • Any email coming from the SBA will come from an email account ending in sba.gov.
  • The presence of the SBA logo on a website does NOT guarantee the information is accurate or endorsed by the SBA. Please cross-reference any information you receive with the information available at www.sba.gov.

Please report any suspected fraud at the following:

• Office of Inspector General (OIG) Hotline: 800-767-0385

Online at this website

4/13/2020 Update:

There has been an overwhelming response to the SBA programs recently announced through the CARES Act. Because of this there have been delays in response time for the EIDL, and some banks have temporarily stopped accepting applications for the PPP (paycheck protection) loan program.

We are advised that new banks are coming online to offer the PPP program all the time. The SUNY Canton SBDC continues to be our local resource for all SBA programs. They can be contacted at 315.386.7312 or request an appointment online here.

Clarification on SBA programs:

The SBDC in Albany has provided some clarification to the SBA EIDL and PPP programs.

Economic Injury Disaster Loan Program (EIDL)

• Up to $10,000 cash advance
• Cash advance will be based on the number of employees for businesses with fewer than 11 employees.
• The cash advance calculation is $1,000 per employee with a maximum cash advance of $10,000.
• If you applied as a sole proprietor, self-employed individual or an independent contractor and did not list any employees in you application, the portal will assume 1 employee for the business owner when calculating the advance eligibility.
• The cash advance does not need to be repaid.
• Disbursements will begin this week and are based on when the applications were received and processed.
• The loan applications will be processed in the order in which they have been received. It will likely be several weeks before your application is assigned to a case manager. The program has received millions of applications in the last three weeks.

There is no way for applicants to check the status of their application, and no confirmation email will be sent. If the applicant saw a confirmation number upon submission of their application, the application has been received and is processing.

Paycheck Protection Program (PPP)

Interest Rate – 1%
Loan Term – 2 Years
Non-Profit Eligibility

• 501(c)(3)s
• 501(c)(19) Veteran Organizations
• Religious Organizations
• Tribal Businesses

Headcount determination

• May be actual employees or full-time equivalents. Defer to your lenders for their preference.

Forgiveness may be prorated based on actual eligible payroll express during the performance period (8-weeks).

The performance period (8 weeks) begins immediately following the disbursement of the loan proceeds.

• If you have laid off employees prior to receiving the PPP loan, you will have a short window to rehire them.
• You may not defer the spending until you are re-opened.
• If you are planning to utilize the funds when your business re-opens, you should delay your application until you are prepared to use the funds. Please keep in mind that these funds are first come, first serve and may not be available when it is convenient to participate.

Seasonal business that had employees in 2019 but had not yet hired their 2020 staff may be eligible. Work with your lender to determine your eligibility and average monthly payroll calculations.

Expenses that CAN NOT be included in the average monthly payroll calculations for loan amount determination and/or forgiveness:

• Employer contributions of social security and Medicare.
• Disability and/or unemployment insurance.
• Payroll processing fees.

For sole proprietors, self-employed individuals, independent contractors and LLCs filing as sole proprietors/partnerships:

• The lender will determine the mechanism for identifying the owner’s average monthly payroll.
• Each lender is likely to use a different approach to this determination and you will have to follow the guidance of your lender.

If you have multiple businesses, check with the lender as to how the multiple businesses should apply for the program.

• The multiple businesses should be working with the same lender for the application processes.
• The lender will need to verify that the total number of employees of the businesses qualify as a small business.
• The lender may have the multiple businesses apply under 1 application or as separate applications.
• The lender will have the final say on how to approve and process applications from owners with multiple businesses.

If you have received an EIDL cash advance prior to the disbursement of the PPP loan, the EIDL advance may be deducted from the total of the PPP loan approval.

3/31/2020 Update:

**ATTENTION: Small businesses (including sole proprietors, independent contractors, self employed persons, and not-for-profits) could get a $10,000 grant in just three days!**

We encourage any business that has been affected by COVID-19 to explore these programs!

The CARES Act was approved on Friday March 27, 2020 which made more assistance available to small businesses suffering temporary revenue loss due to the COVID-19 pandemic. The United States Chamber of Commerce provides a breakdown here including step by step instructions for how to apply for a $10,000 forgivable loan through the SBA Economic Injury Disaster Loan (EIDL) that can be deposited into your bank account in three days. Apply Now.

The SBA Paycheck Protection Program (PPP) is designed to help small businesses keep their employees on the payroll, or hire them back if they have already been laid off. The SBA will forgive loans to businesses that keep employees on the payroll for eight weeks and use funds for payroll, rent, utilities, or mortgage interest. Applications will be available through banks beginning on April 3, 2020. For more information go here. Please contact your local bank to see if they are an SBA lender, or could become one.

The SUNY Canton SBDC continues to be our local resource for all SBA programs. They can be contacted at 315.386.7312 or request an appointment online here: Canton SBDC: Make an appointment.

Locally, the North Country Alliance has created an emergency working capital program to provide businesses located in the NCA service region with short-term relief and access to working capital in response to the COVID-19 Pandemic. For application and program guidelines, please click here.

Initial Announcement:

SBA Administrator Jovita Carranza has approved a statewide disaster declaration for New York. Eligible small businesses may now apply for SBA Economic Injury Disaster Loans (EIDL) online. Businesses can take advantage of free assistance offered by SBA’s network of Resource Partners for help with preparing their loan applications. Contact SUNY Canton SBDC as indicated above.