Small Business Assistance
SBA & Treasury Department Release Forgiveness Loan Application for Paycheck Protection Program
The U.S. Small Business Administration and Department of the Treasury released the Paycheck Protection Program (PPP) Loan Forgiveness Application with detailed instructions. Additional guidance for both borrowers and lenders will be forthcoming, according to Congressman Andy Barr's office.
The form and instructions inform borrowers how to apply for forgiveness of their PPP loans, consistent with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). SBA will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities.
The form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
The U.S. Small Business Administration and Department of the Treasury released the Paycheck Protection Program (PPP) Loan Forgiveness Application with detailed instructions. Additional guidance for both borrowers and lenders will be forthcoming, according to Congressman Andy Barr's office.
The form and instructions inform borrowers how to apply for forgiveness of their PPP loans, consistent with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). SBA will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities.
The form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
- Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles.
- Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan.
- Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness.
- Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30.
- Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined.
Federal Reserve Creates Main Street Lending Program
The Federal Reserve recently took additional actions to provide up to $2.3 trillion in loans to support the economy. This funding will assist households and employers of all sizes and bolster the ability of state and local governments to deliver critical services during the coronavirus pandemic. The Main Street Lending Program will enhance support for small and mid-sized businesses that were in good financial standing before the crisis by offering 4-year loans to companies employing up to 10,000 workers or with revenues of less than $2.5 billion. Principal and interest payments will be deferred for one year. Eligible banks may originate new Main Street loans or use Main Street loans to increase the size of existing loans to businesses. Banks will retain a 5 percent share, selling the remaining 95 percent to the Main Street facility, which will purchase up to $600 billion of loans. Firms seeking Main Street loans must commit to make reasonable efforts to maintain payroll and retain workers. Borrowers must also follow compensation, stock repurchase, and dividend restrictions that apply to direct loan programs under the CARES Act. Firms that have taken advantage of the PPP may also take out Main Street loans.
To support further credit flow to households and businesses, the Federal Reserve will broaden the range of assets that are eligible collateral for TALF. As detailed in an updated term sheet, TALF-eligible collateral will now include the triple-A rated tranches of both outstanding commercial mortgage-backed securities and newly issued collateralized loan obligations. The size of the facility will remain $100 billion, and TALF will continue to support the issuance of asset-backed securities that fund a wide range of lending, including student loans, auto loans, and credit card loans. For more information, check with your lender or VIEW THE TERM SHEETS ON-LINE HERE.
The Federal Reserve recently took additional actions to provide up to $2.3 trillion in loans to support the economy. This funding will assist households and employers of all sizes and bolster the ability of state and local governments to deliver critical services during the coronavirus pandemic. The Main Street Lending Program will enhance support for small and mid-sized businesses that were in good financial standing before the crisis by offering 4-year loans to companies employing up to 10,000 workers or with revenues of less than $2.5 billion. Principal and interest payments will be deferred for one year. Eligible banks may originate new Main Street loans or use Main Street loans to increase the size of existing loans to businesses. Banks will retain a 5 percent share, selling the remaining 95 percent to the Main Street facility, which will purchase up to $600 billion of loans. Firms seeking Main Street loans must commit to make reasonable efforts to maintain payroll and retain workers. Borrowers must also follow compensation, stock repurchase, and dividend restrictions that apply to direct loan programs under the CARES Act. Firms that have taken advantage of the PPP may also take out Main Street loans.
To support further credit flow to households and businesses, the Federal Reserve will broaden the range of assets that are eligible collateral for TALF. As detailed in an updated term sheet, TALF-eligible collateral will now include the triple-A rated tranches of both outstanding commercial mortgage-backed securities and newly issued collateralized loan obligations. The size of the facility will remain $100 billion, and TALF will continue to support the issuance of asset-backed securities that fund a wide range of lending, including student loans, auto loans, and credit card loans. For more information, check with your lender or VIEW THE TERM SHEETS ON-LINE HERE.
Congress Passes Additional Funds for Paycheck Protection Program and Other Small Business Loan Programs; Trump Signs Bill
Following the Senate's approval on April 21 of increased funding for the Paycheck Protection Program and additional resources for Small Business Administration disaster loan programs, it was passed by the U.S. House on April 23 and signed by President Trump on April 24. The additional funding provides $310 billion for PPP loans, including $60 billion reserved exclusively for lending by small, community financial institutions. The bill also increases funding for the Disaster Loans Program Account by $50 billion and provides an additional $10 billion in funding for the Economic Injury Disaster Loan grants.
It is recommended that business owners complete the PPP application and get it to their lender immediately, because additional funding will be administered on a first-come, first-serve basis. The SBA began taking applications again on Monday, April 27, 2020.
As established by the CARES Act, the Paycheck Protection Program provides relief to millions of small businesses so they can sustain their businesses and keep their workers employed. Small businesses and eligible nonprofit organizations, veterans organizations, and tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards. For additional details, VISIT HERE.
Paycheck Protection Program Info:
CARES Act | What You Need to Know:
Families First Response Act: IRS & U.S. Dept of Labor Issue Guidance
Following the Senate's approval on April 21 of increased funding for the Paycheck Protection Program and additional resources for Small Business Administration disaster loan programs, it was passed by the U.S. House on April 23 and signed by President Trump on April 24. The additional funding provides $310 billion for PPP loans, including $60 billion reserved exclusively for lending by small, community financial institutions. The bill also increases funding for the Disaster Loans Program Account by $50 billion and provides an additional $10 billion in funding for the Economic Injury Disaster Loan grants.
It is recommended that business owners complete the PPP application and get it to their lender immediately, because additional funding will be administered on a first-come, first-serve basis. The SBA began taking applications again on Monday, April 27, 2020.
As established by the CARES Act, the Paycheck Protection Program provides relief to millions of small businesses so they can sustain their businesses and keep their workers employed. Small businesses and eligible nonprofit organizations, veterans organizations, and tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards. For additional details, VISIT HERE.
Paycheck Protection Program Info:
- For an overview of the program, CLICK HERE.
- Paycheck Protection Program FAQ (04-26-20), CLICK HERE
- Guidance on how to calculate maximum PPP loan amounts (04-24-20), CLICK HERE
- If you’re a lender, more information can be found HERE.
- If you’re a borrower, more information can be found HERE.
- The application for borrowers posted HERE.
CARES Act | What You Need to Know:
- For the full text of the CARES Act, VISIT HERE
- View the U.S. Chamber of Commerce Small Business Guide for a summary of CARES Act small business provisions in this legislation.
- View the Frequently Asked Questions (FAQs) for the CARES Act prepared by the U.S. Senate Committee on Small Business and Entrepreneurship.
Families First Response Act: IRS & U.S. Dept of Labor Issue Guidance
- View the U.S. Internal Revenue Service notice “Effective Date for Employment Tax Credits Under the Families First Coronavirus Response Act.” This includes further details on the IRS tax provisions included in the Phase II COVID-19 legislation. [VISIT HERE]
- View The U.S. Department of Labor FAQ document regarding specific labor provisions included in the Families First Coronavirus Response Act (Phase II), including paid sick leave and expanded FMLA. [VISIT HERE]
- Employers' Guide to Coronavirus Paid Leave Programs - U.S. Chamber [VISIT HERE]
SBA Loans for Small Businesses Impacted by COVID-19
With revenue loss and cash flow top of mind for many small businesses in Central Kentucky impacted by COVID-19 restrictions, small businesses are highly encouraged to reach out to their local bank to inquire about short-term loans and other options given recent federal actions. The U.S. Small Business Administration (SBA) has set up emergency disaster relief loans for small businesses seeking economic relief in Kentucky. Begin the application process here: ON-LINE HERE.
The SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance per small business and can help overcome the temporary loss of revenue. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%. SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
For assistance in filling out the SBA Disaster Loan application, potential loan applicants can:
1. Go to their local bank as most banks handle SBA loans.
2. Visit KSBDC's dedicated webpage for small business information and assistance options.
3. KSBDC has also created a small business hotline: 1-888-475-SBDC (7232) to efficiently route callers to a KSBDC business coach in their region. You can reach any of the KSBDC business coaches through our streamlined communication options by using any or all of the following:
With revenue loss and cash flow top of mind for many small businesses in Central Kentucky impacted by COVID-19 restrictions, small businesses are highly encouraged to reach out to their local bank to inquire about short-term loans and other options given recent federal actions. The U.S. Small Business Administration (SBA) has set up emergency disaster relief loans for small businesses seeking economic relief in Kentucky. Begin the application process here: ON-LINE HERE.
The SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance per small business and can help overcome the temporary loss of revenue. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%. SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
For assistance in filling out the SBA Disaster Loan application, potential loan applicants can:
1. Go to their local bank as most banks handle SBA loans.
2. Visit KSBDC's dedicated webpage for small business information and assistance options.
3. KSBDC has also created a small business hotline: 1-888-475-SBDC (7232) to efficiently route callers to a KSBDC business coach in their region. You can reach any of the KSBDC business coaches through our streamlined communication options by using any or all of the following:
- Phone: 1-888-475-7232
- Website: http://kybizhelp.com
- E-mail: [email protected]
