Financial Resources Related to COVID-19
- Business Oregon Small Business Navigator and Hotline – this is the best resource for Oregon businesses that need answers quickly. If you can’t find information on their website, call their hotline for assistance.
- PPP FAQ (updated 5/13/20)
- Schwabe Williamson and Wyatt PPP Loan Forgiveness Updates
- Paycheck Protection Program
- Geffen Mesher article on the updates to the PPP Loan Forgiveness Program
- New SBDC SBA Funding Chart – See What is Covered under each SBA Program (as of 4/22/20)
Small businesses with an interest in SBA funding programs can take the following steps to minimize issues and ensure the fastest processing possible by the SBA and/or your bank:
o Be current – check the SBA website for the most recent guidance and forms.
o Be aligned – clearly know how you arrived at your average monthly payroll costs & loan amount.
o Be thorough – follow all the steps outlined in the forms and checklists.
o Be yourself – put the borrower’s name on the application as your company’s legal name. It ought to match the name that is registered with the Secretary of State.
o Be prepared – collect your supporting documents and have them ready when you apply.
o Be consistent – make sure to provide consistent information on all documentation (inconsistencies slow down the process by necessitating additional verification).
o Be in touch – contact your banker or local SBDC office with questions.
Please know that until the new law is passed and the regulations written, we are unable to provide specific guidance but we are confident that taking the steps above will increase your likelihood of securing funds.
- For businesses who have already applied for PPP, they should contact their bank to confirm everything is ready for this next round of funding.
- For businesses who have not yet applied, they should contact their bank and complete the application as soon as possible.
For businesses whose banks have not participated in the SBA programs, there are a few non-bank funders doing Payroll Protection loans:
- Paypal, https://www.loanbuilder.com/ppp-loan-support
- Intuit: https://quickbooks.intuit.com/small-business/coronavirus/paycheck-protection-program/
- Lendio: https://www.lendio.com/covid-relief/sba-paycheck-protection-program-loans/
- Nav: https://app.nav.com/paycheck-protection-program-form
We are now getting the calls regarding the payback of PPP and clients wanting to ensure they are “doing” things correctly for the forgiveness piece of PPP. Bookkeepers are referring the clients to ask the bank. Our commercial and SBA gurus are going to get slammed even more than they are now, 3 calls already this morning. Here are excerpts from the SBA Paycheck Protection Program 13 CFR Part 120 that should answer your question, both from a borrower’s and from a lender’s perspective. Also see my comments at the bottom:
What certifications need to be made?
On the Paycheck Protection Program application, an authorized representative of the applicant must certify in good faith to all of the below:
- The applicant was in operation on February 15, 2020 and had employees for whom it paid salaries and payroll taxes or paid independent contractors, as reported on a Form 1099-MISC.
- Current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant.
iii. The funds will be used to retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments; I understand that if the funds are knowingly used for unauthorized purposes, the federal government may hold me legally liable such as for charges of fraud. As explained above, not more than 25 percent of loan proceeds may be used for non-payroll costs.
- Documentation verifying the number of full-time equivalent employees on payroll as well as the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight week period following this loan will be provided to the lender.
- Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities. As explained above, not more than 25 percent of the forgiven amount may be for non-payroll costs.
- During the period beginning on February 15, 2020 and ending on December 31, 2020, the applicant has not and will not receive another loan under this program.
vii. I further certify that the information provided in this application and the information provided in all supporting documents and forms is true and accurate in all material respects…
viii. I acknowledge that the lender will confirm the eligible loan amount using tax documents I have submitted. I affirm that these tax documents are identical to those submitted to the Internal Revenue Service. I also understand, acknowledge, and agree that the Lender can share the tax information with SBA’s authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews.
What do lenders have to do in terms of loan underwriting?
Each lender shall:
- Confirm receipt of borrower certifications contained in Paycheck Protection Program Application form issued by the Administration;
- Confirm receipt of information demonstrating that a borrower had employees for whom the borrower paid salaries and payroll taxes on or around February 15, 2020;
iii. Confirm the dollar amount of average monthly payroll costs for the preceding calendar year by reviewing the payroll documentation submitted with the borrower’s application; and
Follow applicable BSA requirements…..
Each lender’s underwriting obligation under the PPP is limited to the items above and reviewing the “Paycheck Protection Application Form.” Borrowers must submit such documentation as is necessary to establish eligibility such as payroll processor records, payroll tax filings, or Form 1099-MISC, or income and expenses from a sole proprietorship. For borrowers that do not have any such documentation, the borrower must provide other supporting documentation, such as bank records, sufficient to demonstrate the qualifying payroll amount.
Can lenders rely on borrower documentation for loan forgiveness?
Yes. The lender does not need to conduct any verification if the borrower submits documentation supporting its request for loan forgiveness and attests that it has accurately verified the payments for eligible costs. The Administrator will hold harmless any lender that relies on such borrower documents and attestation from a borrower. The Administrator, in consultation with the Secretary, has determined that lender reliance on a borrower’s required documents and attestation is necessary and appropriate in light of section 1106(h) of the Act, which prohibits the Administrator from taking an enforcement action or imposing penalties if the lender has received a borrower attestation.
Two recommendations that I have been suggesting business owner’s think about doing is to: 1. Set up a separate account to administer the funds out of, and then use those funds only for the eligible purposes during the eight weeks from when they get the funds (eligible payroll, mortgage interest, rent and utilities); 2. Keep accurate and meticulous records of the expenses paid with those funds. These records will be what the business owner will need to provide to the bank to get their loan forgiven. Any amount left over in the account may be part of the unforgiven part of the loan. They then can either keep it as cash and pay it back over two years at 1%, or just use it to pay off the balance of the loan. One note is that payroll must be at least 75% of the costs, meaning mortgage interest, rent and utilities can make up no more than 25% of the loan forgiveness amount. The main thing is to keep accurate records.
Please let me know if this helps.
Please check with a professional advisor, such as your CPA or tax attorney.
- Explore the loan programs that best meet(s) your needs. Here are the primary ones that are available:
- Your local financial institution (bank/credit union). Many are offering payment deferrals and some have special loan programs.
- SBA Economic Injury Disaster Advance Loan. Apply online. For questions either call the SBA Disaster Helpdesk, which is open from 8AM to 8PM EDT 7 days a week: (800) 659-2955, or contact your local Oregon SBDC office.
- SBA Express Bridge Loan for those who have applied, are waiting on the SBA EIDL and who currently have a business relationship with an SBA Express Lender.
- SBA Debt Relief for existing SBA loans. If you have an existing SBA loan (7a or 504) you may be eligible.
- SBA Paycheck Protection Program which is still being rolled out and will be available through select financial institution yet to be fully identified. This is part of the recently approved CARES Act. The first round is exhausted, and second-round is not yet available. check back for updates.
- Check with your local Chamber and or Economic Development Districts/Organization for other loans and grants that might be available. Additional small business loans and grants will become available shortly.
- Applying for SBA Disaster Loans: EIDL Information
- Paycheck Protection Program Loans: Frequently Asked Questions
- SBA Disaster Loans, as well as the new loans made available through the CARES Act, can be forgivable, in whole or in part, if the funds are used as the lending terms require (payroll, rent/mortgage, utilities, etc.). Talk to the SBDC or your SBA-approved lender today to learn how to apply for a forgivable loan
- SBA EIDL Application
- SBDC EIDL Fact Sheet
- SBA PPP
- SBDC PPP Fact Sheet
- State of Oregon Employment Department
- Unemployment Online Claim System
- Oregon Community Foundation
- US Chamber of Commerce COVID-19 Emergency Loans Small Business Guide and Checklist
- The Main Stree Lending Program: What your Business Needs to Know