Financial Assistance from the US SBA for Small Businesses and Non-Profits (SBA file date: May 5 2020 v1)
Summary
This later version of the U.S. Small Business Administration Houston office slide deck (www.sba.gov/tx/houston) on financial assistance for small businesses and non-profits opens with an update: the EIDL application process has opened again for agricultural businesses, and applicants with a 200 series application number can re-apply for the EIDL Advance online. It repeats that the Paycheck Protection Program and Health Care Enhancement Act, signed Friday April 24, adds $310Bn for the Paycheck Protection Program and $60 Bn for Economic Injury Disaster Loans, and warns that the loan programs are first-come, first-served. PPP loans carry a maturity of 2 years and an interest rate of 1%, with at least 75% of the forgiven amount used for payroll. EIDL loans run up to $2 million, and the deck lists new EIDL as currently only open to agricultural businesses.
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U.S. Small Business
Administration
Agenda
1. Non-Monetary Assistance
from the US SBA and our Partners
2. Financial Assistance from the US SBA
for Small Businesses and Non-Profits
3. Additional Resources
These Slides are available to download at:
www.sba.gov/tx/houston
Recent Developments
Economic Injury Disaster Loan and PPP Updates
• At this time, the EIDL application process has opened again for
agricultural businesses
• If you applied in March before the CARES Act and received a 200
series application number, you can re-apply for the EIDL Advance
online. If you have 300 series application number, your loan request
is still being processed.
• $310Bn for Payroll Protection Program (PPP)
• If you have not applied with an SBA Lender, you need to act quickly.
• The loan programs are first-come, first-served
3
Recent Developments
“Paycheck Protection Program and Health Care Enhancement Act”
• Signed by President Trump Friday April 24
• Payroll Protection Program portions begin April 27 @ 9:30am
• $310Bn for Payroll Protection Program (PPP)
• $60Bn for community banks and CUs
• $30Bn for those with $10Bn - $50Bn assets
• $30Bn for those with less than $10Bn assets
• $60 Bn for Economic Injury Disaster Loans (EIDL) - will begin TBD
• $50Bn for EIDL loans
• $10Bn EIDL grants
4
Non-Monetary Assistance
Important Non-Monetary Assistance from SBA
SBA has three local Resource Partners
• Texas Gulf Coast Small Business Development Centers (SBDC)
• SCORE Mentors
• The WBEA Women’s Business Center (WBC)
A range of help during the downturn, to include:
• Cash flow management / short term financial management
• Messaging / Social Media to stay engaged with customers
• Import/Export
• Supply Chain
• Strategic Planning and Financial Tune-Up; prepare to prosper after the disaster
• Planning for further disasters / Risk management / Insurance counseling
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Contact Information
Small Business Development Center Houston SCORE
713-752-8444 713-487-6565
www.sbdc.uh.edu www.houston.score.org
Women’s Business Center U.S. Small Business Administration
713-681-9232 713-773-6500
www.wbea-texas.org/womens-
business-center SIGN-UP FOR EMAIL UPDATES:
www.sba.gov/tx/houston
FOLLOW US ON TWITTER:
@SBA_Houston
7
Financial Assistance
From the US SBA
SBA Debt Relief
7(a), 504, & Existing Disaster
Microloans Loans
• SBA will defer existing loan
• The SBA will automatically pay the payments through December 31,
principal, interest, and fees of current 7(a),
504, and microloans in regular servicing
2020 automatically.
status for a period of six months. • Borrowers of home and business
• If Lender receives a payment from a disaster loans do not have to
Borrower after March 27, 2020, they must contact SBA to request deferment.
inform Borrower it has the option of:
Lender either returning the payment or
applying the payment to further reduce
the balance.
9
Passage of the
Coronavirus Aid, Relief, and Economic Security (CARES) Act
Gives Businesses TWO Loan Choices
Affected, Eligible
Business?
Funded, and will be active 9:30 April 27 Funded – not active. Re-starts TBD
1 2
Paycheck Economic Injury
Protection Disaster Loan
Program (PPP) (EIDL)
Loan is from Loan is directly
existing SBA from the federal
Lender government (SBA)
10
Eligibility Update- Faith Based Organizations
1. Faith-based organizations, including houses of worship, are now
eligible to receive SBA loans under the PPP and EIDL programs.
2. Churches and related institutions qualify for PPP and EIDL loans as
long as they meet the requirements of Section 501(c)(3)
3. Organizations must be small. If in doubt check SBA’s size standards
tables https://www.sba.gov/document/support--table-size-
standards
11
Eligibility Update- Farm/Ranches
1. Agricultural producers, farmers, and ranchers with 500 or fewer employees whose
principal place of residence is in the United States are eligible.
2. Farms are eligible if: (i) the farm has 500 or less employees, OR (ii) it fit within the
revenue-based sized standard, which is an average annual receipts of $1M.
3. Additionally, farms can qualify for PPP if it meets SBA’s “alternative size standard.”
The “alternative size standard” is currently: (1) a maximum net worth of the
business not more than $15 million, AND (2) the average net income Federal
income taxes of the business for the two full fiscal years before the date of the
application be not more than $5 million.
12
PPP Loans
Payroll Protection Program (PPP)
• Intended to help small businesses with payroll and other operating
expenses.
• SBA will forgive the portion of the loan proceeds used to cover:
• The first eight weeks of payroll costs
• Rent
• Utilities
• Mortgage interest
• More details here:
• https://www.sba.gov/funding-programs/loans/paycheck-protection-
program-ppp
14
PPP Eligibility
• Small business affected by COVID-19 with less than 500 employees,
including
• sole proprietorships, independent contractors, self-employed persons
• private non-profit organization
• 501(c)(19) veteran organizations
• Certain businesses may have more than 500 employees if they meet
SBA’s size standards for those industries
• Hospitality and food industry businesses with more than one
location:
• could be eligible at the store and location level if store employs less than
500 workers
• This means each store location could be eligible
15
Loan Details & Forgiveness
• Details:
• Maturity of 2 years; interest rate of 1%
• Payments deferred for six months
• No collateral or personal guarantees required
• The Government nor lenders will charge small businesses any fees
• Forgiveness is:
• Based on employer maintaining or quickly rehiring employees and
maintaining salary levels
• Reduced if full-time headcount declines or if salaries and wages decrease
• Fully forgiven if the funds are used for payroll costs, interest on mortgages,
rent, and utilities
• At least 75% of the forgiven amount must have been used for payroll
16
How to Apply for PPP
• Apply through existing SBA 7(a) lenders –
Aprox 200 in the Houston District
• Other lenders will be added as necessary
• Lenders have began processing applications
on April 3, 2020 and funds replenished on
April 24, 2020.
• Check with your existing lender, or
• List of SBA Lenders is at
www.sba.gov/tx/houston under “corona
virus”
17
Documents Needed - PPP
Borrowers must submit documentation to establish eligibility such as:
• payroll processor records
• payroll tax filings
• If sole proprietorship, form 1099-MISC or income and expenses.
For borrowers that do not have such documentation, must provide:
• other supporting documentation
• such as bank records
• sufficient to demonstrate the qualifying payroll amount.
18
Calculating PPP Loan Amount
https://home.treasury.gov/system/files/136/How-to-Calculate-Loan-Amounts.pdf
19
Sample PPP Application (1 of 5)
20
Sample PPP Application (2 of 5)
21
Sample PPP Application (3 of 5)
22
Sample PPP Application (4 of 5)
23
Sample PPP Application (4 of 5)
24
EIDL Loans
EIDL has received $60 Bn in new funds for loans
And $10 Bn for new advances (grants)
Currently only open to Agricultural Businesses
Economic Injury Disaster Loans (EIDL)
Loans up to $2 million; no payments for 12 months
3.75% interest rate for small businesses; 2.75% for private non-profits.
Long-term repayments up to 30 years
May be used for fixed debts, payroll, accounts payable and other bills affected by the disaster
May be approved solely on the applicant credit score.
Date to Accept New EIDL is TBD 26
Additional EIDL Details
No cost to apply; No obligation to take the loan (if offered)
Amount is determined by SBA from your information
Existing SBA Disaster or Business loans do not make you ineligible
Personal guarantee requirements:
• None if loan is under $200,000
• If over $200,000 then guarantee from all 20% or greater owners
Collateral:
• If over $25,000 EIDLs require collateral
• SBA will not decline for lack of collateral, but requires the pledge of what is available
• Does not require primary residence in Texas
Date to Accept New EIDL is TBD 27
CARES Act - EIDL Grant
• Until Dec 31, 2020 affected small businesses may request up to $10K
• Repayment is not required even if subsequently denied a loan
• Eligibility determined by self-certification
• Advance may be used for any purpose described in section 7(b)(2) of the
Small Business Act (15 U.S.C. 636(b)(2)), including:
• paid employee sick leave if unable to work due to the direct effect of the COVID–19
• payroll to retain employees
• increased costs to obtain materials unavailable due to interrupted supply chains
• rent or mortgage payments
• obligations that cannot be met due to revenue losses
NOTE: An applicant may receive an EIDL Loan and a PPP loan as long as the
costs being paid with each are different (no "double-dipping").
Date to Accept New EIDL is TBD 28
How to Apply for EIDL
• For the COVID-19 disaster everything is online
• Works on iPhone with Safari / Chrome on Android
• If PC; works best with Internet Explorer or Microsoft Edge
• The website for applying for EIDL is www.sba.gov/disaster
• You may also contact the SBA Disaster Customer Service Center
(M - F 8:00 am to 8:00 pm, Sat/Sun 8:00 am to 5:00 pm Eastern Time)
• 1-800-659-2955
• e-mail disastercustomerservice@sba.gov
• TTY: 1-800-877-8339
Date to Accept New EIDL is TBD 29
30
Date to Accept New EIDL is TBD
Date to Accept New EIDL is TBD 31
Date to Accept New EIDL is TBD 32
Business Information (1 of 2)
Date to Accept New EIDL is TBD 33
Business Information (2 of 2)
Date to Accept New EIDL is TBD 34
Owner Information
Date to Accept New EIDL is TBD 35
Additional Information (1 of 2)
Date to Accept New EIDL is TBD
36
Additional Information (2 of 2)
Date to Accept New EIDL is TBD 37
After Applying
Loan Processing Decision
• Information verified; credit checked; you may be asked for more info
• EIDL amount is determined
• A loan officer contacts you; makes recommendations
• Decision normally takes up to 4 weeks
Loan Closes and Funds Disbursed
• Sign and Submit Loan Documents
• SBA will make initial loan disbursements for two months of working capital up to a maximum
of $15,000 per applicant (this does not include the up to $10K Advance). By doing this, the
SBA will ensure it is supporting the greatest number of applicants during this difficult time
• Case Manager assigned that will help you with the rest
Date to Accept New EIDL is TBD 38
Important Final Notes About EIDL Applications
• If more funds are needed you can submit supporting documents and
request an increase
• If less funds are needed you can request a reduction
• If denied:
• you get six months to provide a written reconsideration request with
new / supplemental information
• If denied a second time, you get an additional 30 days to appeal
• Please complete and submit everything required
Date to Accept New EIDL is TBD 39
Non-SBA Additional Info
Additional Info / Resources
• See your existing bank – they may have other SBA & non-SBA programs to help
• LiftFund Program
• Texas Restaurant Association Grant Program
• Check your local EDC (ex.- Galveston EDP Short-term Loan Program)
• Brazos Valley Community Relief Grant
• Harris County Small Business Loans Program
• U.S. Chamber of Commerce ‘Save Small Business Fund’
• Allied Arts Grant program for artists
• Hello Alice COVID-19 Grant
• Non-Profit Organization Assistance
• Visit your local Chamber of Commerce
• More coming…
41
Contact Information
Small Business Development Center Houston SCORE
713-752-8444 713-487-6565
www.sbdc.uh.edu www.houston.score.org
Women’s Business Center U.S. Small Business Administration
713-681-9232 713-773-6500
www.wbea-texas.org/womens-
business-center SIGN-UP FOR EMAIL UPDATES:
www.sba.gov/tx/houston
FOLLOW US ON TWITTER:
@SBA_Houston
42
Small Business Scam & Fraud Scheme Advisory
• The presence of an SBA logo on webpage or correspondence does
not guarantee the information is from the SBA
• If someone contacts you promising to get approval of an SBA loan,
but requires any payment up front, suspect fraud
• Any email communication from SBA will end with gov
• Report any suspected fraud to OIG’s Hotline at 800-767-0385 or
online at, https://bit.ly/2UxdAhL
43
Most Common Questions
Common Questions (1/2)
• Visit www.sba.gov/tx/houston, under Coronavirus resources:
• For a copy of this slide deck & the Houston District SBA lender list
• What banks are offering PPP loans?
• Many of the SBA lenders in Houston have already started
• Can I check status of my application?
• You will get Application Number
• Then will get advance (if requested) – watch your bank account
• Then you will receive email from SBA Disaster to start the lending process
• The Houston District office is unable to check status.
• Are EIDL loans forgiven?
• NO, but the Advance is a grant (is forgiven)
• How is the up to $10K EIDL Relief Grant calculated?
• Determined by the number of pre-disaster (i.e., as of January 31, 2020) employees.
The Advance will provide $1,000 per employee up to a maximum of $10,000.
Common Questions (2/2)
• Can I apply for both EIDL and PPP?
• YES; however, you cannot duplicate costs.
• Which loan should I apply for EIDL or PPP?
• Each business is different. Our network of local, free resources can help.
• I have already submitted my EIDL application can I submit for the
PPP loan?
• YES, just don’t duplicate costs included in the EIDL.
• If payroll was on the EIDL, you must refinance the EIDL into the PPP
• I have already submitted my EIDL application but didn’t get the
Advance?
• If application number starts with 22 - submit the new application to access
advance – won’t affect previous application
• If application begins with 33 – watch your bank account.
For questions about your specific situation
• For the EIDL Loan; SBA Disaster Customer Service:
• 1-800-659-2955 -- TTY: 1-800-877-8339
• e-mail disastercustomerservice@sba.gov
• For the PPP Loan:
• Contact the SBA lender of your choice
• Lender list at www.sba.gov/tx/Houston under Coronavirus Resources
• One of our Resource Partners for general guidance:
• Texas Gulf Coast SBDC 713-752-8444 www.sbdc.uh.edu
• Houston SCORE 713-487-6565 www.houston.score.org
• Women’s Business Center 713-681-9232 www.wbea-texas.org/womens-business-center
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