News & Tech Tips

Considering an SBA Loan? Act Now.

Kathleen Hargrove on March 22, 2021

If you have been considering an SBA loan (other than PPP) for your business, this is an ideal time to apply.

 

We have compiled some key SBA loan related provisions included in the Economic Aid Act to further assist you with making this decision:

 

 

Extension of the Debt Relief Program established under the CARES Act

 

  • All borrowers with qualifying loans approved by the SBA prior to the CARES Act will receive an additional three months of P&I, starting in February 2021. Going forward, those payments will be capped at $9,000 per borrower per month.

 

  • After the three-month period described above, borrowers considered to be underserved—namely the smallest or hardest-hit by the pandemic—will receive an additional five months of P&I payments, also capped at $9,000 per borrower per month. They include:

 

  • Borrowers with SBA microloans or 7(a) Community Advantage loans

 

  • Borrowers with any 7(a) or 504 loan in the hardest-hit sectors, as measured by the severity of sector-wide job losses since the start of the pandemic. They include food service and accommodation; arts, entertainment and recreation; education; and laundry and personal care services.

 

 

  • SBA payments of P&I on the first 6 months of newly approved loans will resume for all loans approved between February 1 and September 30, 2021, also capped at $9,000 per month.

 

 

Modifications to 7(a) Loan Programs

 

  • Increases to 90 percent the loan guarantee amount on 7(a) loans, including for Community Advantage loans, until October 1, 2021.

 

  • Increases the Express Loan amount from $350,000 to $1 million on January 1, 2021, and then reverts permanently to a lower amount of $500,000 on October 1, 2021.

 

  • The Express Loan guaranty amount for loans of $350,000 and less is temporarily increased from 50 percent to 75 percent, and for loans above $350,000 the guarantee remains at 50 percent. On October 1, 2021, the guarantee reverts to 50 percent for all Express Loans.

 

 

Temporary Fee Reductions

 

  • Waives lender and borrower fees for both the 7(a) and 504 loan programs.

 

 

 

For further assistance with submitting an application or if you have any questions, please work with your Whalen advisor.

New PPP Changes For Small Businesses

Kathleen Hargrove on February 23, 2021

The Biden Administration announced this week that it will institute a two-week period starting Wednesday, 2/24 during which only businesses with fewer than 20 employees will be able to apply for Paycheck Protection Program (PPP) loans.

 

The exclusive application window is one of several moves the White House said it is making to further target the PPP funds to the smallest businesses. The administration also will:

 

  • Change the PPP loan calculation formula to help sole proprietors, independent contractors, and self-employed individuals receive more financial support. In addition, $1 billion will be set aside for businesses in this category that don’t have employees and are located in low- and moderate-income areas. Details of the changes have not yet been released.

 

  • Eliminate a restriction preventing small business owners with prior nonfraud felony convictions from obtaining relief through the PPP.

 

  • Remove a rule preventing small business owners who are delinquent on federal student loan payments from securing a PPP loan.

 

  • Allow noncitizen small business owners who are lawful U.S. residents to use individual taxpayer identification numbers (ITINs) to apply for relief.

 

The administration said the 14-day exclusive application period is designed to help the 98% of small businesses that have fewer than 20 employees, noting that these businesses often struggle more than larger businesses to collect the necessary paperwork and secure a PPP loan through a lender.

 

The White House statement also said that the administration would continue to work with lenders and other stakeholders to address PPP processing delays caused by anti-fraud validation checks that must be completed before loan guaranty approval is granted. The statement said the U.S. Small Business Administration (SBA) would continue to work with lenders to create streamlined processes to resolve issues as quickly as possible while still working to ensure taxpayer funds are spent wisely.

 

The administration also will make the following moves:

 

  • Update key areas of SBA websites to help more applicants find resources for understanding relief options and completing applications.

 

  • Continue to conduct stakeholder outreach to learn more about challenges and opportunities in the implementation of current emergency relief plans.

 

  • Launch a new initiative to increase communication with lenders. Specifically, the SBA will increase opportunities for lenders to provide recommendations and ask questions about the PPP. The goal is to drive resolution of open questions and concerns in a more streamlined way.

 

The application window for the current $284 billion iteration of PPP is scheduled to close March 31.

 

For any questions regarding this announcement or assistance with your PPP filing, please contact your Whalen advisor.

 

 

Source: Journal of Accountancy

Small Business Relief Grant

Kathleen Hargrove on October 29, 2020

The Small Business Relief Grant is designed to provide relief to Ohio businesses that have been negatively affected by COVID-19.

 

Governor Mike DeWine has designated up to $125 million of funding received by the State of Ohio from the federal CARES Act to provide $10,000 grants to small businesses to help them through the current crisis.

 

The program, which will begin accepting applications November 2, 2020, will be administered by the Ohio Development Services Agency.

 

For the full Terms and Conditions for participation in the Small Business Relief Grant, please click here.

 

 

For questions or assistance with the application process, please contact your Whalen advisor.

 

 

 

SOURCE: Ohio Development Services Agency

PPP Application Window Extended to August 8

Kathleen Hargrove on July 8, 2020

President Trump signed a bill Saturday re-opening the application window for the Paycheck Protection Program (PPP) until Aug. 8.

 

The five-week extension had been approved last week by both chambers of Congress. The U.S. House of Representatives and the Senate both passed the legislation by unanimous consent.

 

The House’s approval on July 1 came after the Senate passed the extension in a surprise move the night of June 30, just a few hours before the PPP application window was scheduled to close.

 

The extension keeps a source of funding open to struggling small businesses while Congress works on a second, more targeted funding program. The PPP, which has approximately $129 billion in funding remaining, was launched in early April as the COVID-19 pandemic battered the U.S. economy and forced many businesses to close. The program provides forgivable loans that small businesses and other qualifying entities can use to cover payroll and other select costs.

 

The U.S. Small Business Administration (SBA), which oversees the program with the Treasury Department, stopped accepting loan applications at midnight on June 30. The program had not yet officially re-opened as of Sunday evening, according to the SBA’s PPP home page.

 

As of June 30, the SBA had approved nearly 4.9 million loans for a total of more than $520 billion.

 

 

 

 

SOURCE: Journal of Accountancy

 

 

Trump Signs Additional Small Business Coronavirus Relief Bill

Kathleen Hargrove on April 24, 2020

President Trump has just signed a $484 billion interim coronavirus bill into law that includes additional money for the small-business loan program, as well as more funding for hospitals and testing.

The bill passed the Senate earlier this week and was approved by the House yesterday.

It includes more than $320 billion for the Paycheck Protection Program, or PPP, created by the CARES Act, which was passed late last month.

The PPP, which provides forgivable loans to small businesses that keep their employees on the payroll, had quickly run out of money due to high demand

About $60 billion of the additional PPP funding will be set aside for businesses that do not have established banking relationships, such as rural and minority-owned companies.

The bill also provides $60 billion in loans and grants for the Small Business Administration’s disaster relief fund, $75 billion for hospitals and $25 billion for coronavirus testing.

Another expansive round of coronavirus legislation is expected to be released in the coming weeks. We will continue to monitor this and keep you updated on any new information.

If you think your business is eligible for assistance and has not already received funding through this program, we are happy to help guide you through the process.

 

As always, feel free to reach out to your Whalen advisor with any questions on this new bill or anything else you may have questions about during this time.

 

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