This post was last updated on April 23 to reflect clarified messaging and updates from the federal government.
UPDATE 4.23.20: The Senate and House of Representatives have both passed a new $484 billion coronavirus relief package, including more than $300 billion in additional funds for the Paycheck Protection Program (PPP) designed to bail out small- and medium-sized businesses (SMBs), according to the New York Times.
According to the Marin SBDC, all applications that are already in the cue will be processed and people will still be able to get funding. If you submitted and are waiting to hear back, you still have a chance, and "some PPP banks are still accepting applications and may be able to fund those requests." The portal expected to open soon after the package is finalized. If you want to talk with someone at the SBA about your application, call 1-800-659-2955 (SBA Disaster Assistance Customer Service Center). It's open 24/7.
Since the CARES Act was signed into law on March 27, a $2 trillion stimulus package related to the COVID-19 pandemic, small business owners have been scrambling to figure out how to put such a massive stimulus from the federal government to work for them.
In addition to $250 billion for direct payments to individuals and families, $250 billion in unemployment insurance benefits and $500 billion in loans for distressed companies, it contains the "Paycheck Protection Program," as it's called, a $350 billion program for businesses with less than 500 employees, i.e., every business in the 94941.
That $350 billion comes in the form of loans, guaranteed by federal government, that will function as grants under certain conditions. The debt will be forgiven if the funds are used for payroll costs, mortgage interest, rent and utility payments and if businesses retain employees and employees receive at least 75% of their prior pay. The PPP will be ready to accept applications on April 3.
Companies can rehire employees in coming weeks without penalty. For businesses that reduce their headcount or reduce wages more than 25%, the amount of the loan forgiven will be reduced in proportion to payroll cuts, but the companies can rehire employees in coming weeks without penalty. The small business loans will be 2.5 times monthly payroll costs, although some groups in the travel and restaurant industries had sought four times operating costs. The loans come with a rate of 4 percent or below, and the maximum loan amount is $10 million.
A key component is that SBA Loan certified banks are processing and issuing the PPP loans. To date among local banks, that includes Bank of Marin, Redwood Credit Union, First Republic Bank and Wells Fargo. If you are a lender looking to participate in the program, GO HERE FOR MORE INFO.
We know that business owners like you want to know how to get in the queue, where to apply, what the application requirements are and on and on. The critically important next step is to get in touch with your bank, and get your objectives on their radar ASAP.
Here's an excellent set of FAQs on the PPP.
Here's an FAQ specifically for would-be borrowers.
Here's another extremely informative set of FAQs from Govern for California.
And here's the application.
According to the Marin SBDC, all applications that are already in the cue will be processed and people will still be able to get funding. If you submitted and are waiting to hear back, you still have a chance, and "some PPP banks are still accepting applications and may be able to fund those requests." The portal expected to open soon after the package is finalized. If you want to talk with someone at the SBA about your application, call 1-800-659-2955 (SBA Disaster Assistance Customer Service Center). It's open 24/7.
Since the CARES Act was signed into law on March 27, a $2 trillion stimulus package related to the COVID-19 pandemic, small business owners have been scrambling to figure out how to put such a massive stimulus from the federal government to work for them.
In addition to $250 billion for direct payments to individuals and families, $250 billion in unemployment insurance benefits and $500 billion in loans for distressed companies, it contains the "Paycheck Protection Program," as it's called, a $350 billion program for businesses with less than 500 employees, i.e., every business in the 94941.
That $350 billion comes in the form of loans, guaranteed by federal government, that will function as grants under certain conditions. The debt will be forgiven if the funds are used for payroll costs, mortgage interest, rent and utility payments and if businesses retain employees and employees receive at least 75% of their prior pay. The PPP will be ready to accept applications on April 3.
Companies can rehire employees in coming weeks without penalty. For businesses that reduce their headcount or reduce wages more than 25%, the amount of the loan forgiven will be reduced in proportion to payroll cuts, but the companies can rehire employees in coming weeks without penalty. The small business loans will be 2.5 times monthly payroll costs, although some groups in the travel and restaurant industries had sought four times operating costs. The loans come with a rate of 4 percent or below, and the maximum loan amount is $10 million.
A key component is that SBA Loan certified banks are processing and issuing the PPP loans. To date among local banks, that includes Bank of Marin, Redwood Credit Union, First Republic Bank and Wells Fargo. If you are a lender looking to participate in the program, GO HERE FOR MORE INFO.
We know that business owners like you want to know how to get in the queue, where to apply, what the application requirements are and on and on. The critically important next step is to get in touch with your bank, and get your objectives on their radar ASAP.
Here's an excellent set of FAQs on the PPP.
Here's an FAQ specifically for would-be borrowers.
Here's another extremely informative set of FAQs from Govern for California.
And here's the application.
You also need to understand the distinction between the PPP and SBA Economic Injury Disaster Loans (EIDL), some of which have already been approved, including to at least one Mill Valley business(!), with stalwart support and guidance form the Marin SBDC.
NOTE: There is a new portal for EIDL applications and processing. IT IS HERE.
An added wrinkle of the EIDL program is that the SBA has added a checkbox on the application for applicants to request a rapid $10,000 advance on their loan. According to Marin SBDC officials, the advance is paid within three days of a successful EIDL application, and may not have to be repaid. If you already completed your application, SBA will be in touch to offer you the chance to request this since it wasn’t available last week. If you started to apply, but never completed your application, then start with the new portal application. To get the $10,000 advance, you still need to apply for the EIDL loan.
NOTE: NorCal/Marin SBDC is hosting a number of free webinars on EIDLs and PPP, with plenty of time set aside for Q&A allowing you to ask questions about either one or both. Click the link below to join a free webinar on either April 8, April 10, April 13, April 15 and April 17. All are from 10:30am-11:30am:
NOTE: There is a new portal for EIDL applications and processing. IT IS HERE.
An added wrinkle of the EIDL program is that the SBA has added a checkbox on the application for applicants to request a rapid $10,000 advance on their loan. According to Marin SBDC officials, the advance is paid within three days of a successful EIDL application, and may not have to be repaid. If you already completed your application, SBA will be in touch to offer you the chance to request this since it wasn’t available last week. If you started to apply, but never completed your application, then start with the new portal application. To get the $10,000 advance, you still need to apply for the EIDL loan.
NOTE: NorCal/Marin SBDC is hosting a number of free webinars on EIDLs and PPP, with plenty of time set aside for Q&A allowing you to ask questions about either one or both. Click the link below to join a free webinar on either April 8, April 10, April 13, April 15 and April 17. All are from 10:30am-11:30am:
Who's Lending VIA PPP?
| Accepting applications ONLY from current customers: Umpqua Bank Bank of America Heritage Bank of Commerce Mechanics Bank Bank of Marin Banner Bank SAFE Credit Union Redwood Credit Union SF Fire Credit Union Wells Fargo | MAY BE accepting applications outside of current customers: US Bank Summit State Bank 1st Capital Bank Chase US Business Bank Other Fin'l Tech Firms Approved to Lend: Lendistry Paypal Intuit Square Kabbage Search Light Lending |
What About Both? Can I Do Both?
Q: If I have applied for, or received an Economic Injury Disaster Loan (EIDL) related to COVID-19 before the Paycheck Protection Program became available, will I be able to refinance into a PPP loan?
A: Yes! In fact, federal officials are encouraging small business owners to apply for both. If you received an EIDL loan related to COVID-19 between January 31, 2020 and now, you are able to refinance the EIDL into the PPP for loan forgiveness purposes. However, you may not take out an EIDL and a PPP for the same purposes. Remaining portions of the EIDL, for purposes other than those laid out in loan forgiveness terms for a PPP loan, would remain a loan. If you took advantage of an emergency EIDL grant award of up to $10,000, that amount would be subtracted from the amount forgiven under PPP.
PPP Program is LIVE
Marin SBDC is a valuable resource, able to take business owners through the process step by step. SIGN UP HERE if you want their support.
Marin SBDC previously help webinars on timely topics like "Emergency Cash Flow Resources and Opportunities" and "Restaurants Responding to COVID 19."
[UPDATE 4.9.20]: We've heard from both regional business leaders, NorCal SBDC officials and many of you who have filed applications, and here's some new info:
Questions? Email us here and we'll get you the answer ASAP or connect with the best person to do so.
A: Yes! In fact, federal officials are encouraging small business owners to apply for both. If you received an EIDL loan related to COVID-19 between January 31, 2020 and now, you are able to refinance the EIDL into the PPP for loan forgiveness purposes. However, you may not take out an EIDL and a PPP for the same purposes. Remaining portions of the EIDL, for purposes other than those laid out in loan forgiveness terms for a PPP loan, would remain a loan. If you took advantage of an emergency EIDL grant award of up to $10,000, that amount would be subtracted from the amount forgiven under PPP.
PPP Program is LIVE
Marin SBDC is a valuable resource, able to take business owners through the process step by step. SIGN UP HERE if you want their support.
Marin SBDC previously help webinars on timely topics like "Emergency Cash Flow Resources and Opportunities" and "Restaurants Responding to COVID 19."
[UPDATE 4.9.20]: We've heard from both regional business leaders, NorCal SBDC officials and many of you who have filed applications, and here's some new info:
- We're now learning about new information requested by lenders, including supporting documentation like 941 statements for the prior quarter, copies of W-3 statements and annualized payroll reports broken out by employee. HERE'S A SHORT VIDEO THAT HELPS YOU ACCESS THAT INFO.
- You should use all W2 folks (PT and FT) to calculate/submit the PPP amount requested but not 1099 folks (who can apply directly for a PPP).
- Forgiveness calculations are quite limited (for now, it does not include anyone who works less than 32 hours. You can’t combine people to make one FTE).
- If you meet the forgiveness criteria, 100% can be forgiven even if you ask for more than payroll (e.g. lease, rent, utilities) as long as at least 75% is for payroll
- Even if loans aren’t forgiven, the interest rates are attractive. 3.75% for disaster loan if a for profit; 2.75% for Disaster loan for a nonprofit and 1% for a PPP loan, up from .5% just a few days ago).
- Bridge loans, which are the usual alternative to the SBA and PPP programs are at prime plus 2-6%.
- If a business wants to be considered for the $10K advance in the PPP, go to SBA website and fill out, even if not applying for the Disaster loan. You can then apply for PPP.
- BOTH loan programs are SBA programs. It’s just that one is processed through your bank, the other directly through SBA.
- Wells Fargo just announced they hit their $10billion limit on PPP applications by clients.
- To find out which banks are doing PPP loans go to www.sba.gov/paycheckprotection/find
Questions? Email us here and we'll get you the answer ASAP or connect with the best person to do so.