COVID 19SBA FINANCING

OHIO SBDC AT RHODES STATE COLLEGE

APRIL 10, 2020

KATHY KELLER

Funded in part through a cooperative agreement with the U.S. Small Business Administration. The Ohio SBDC program is also funded in part by

the Ohio Development Services Agency. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of the SBA. Reasonable accommodations for persons with disabilities will be made if requested at least two weeks in

advance. For arrangements, call the Ohio SBDC at 419-995-8184.

SBA ECONOMIC INJURY DISASTER LOAN

WHO CAN APPLY:

SMALL BUSINESSES (500 EMPLOYEES OR FEWER)

SOLE PROPRIETORS/INDEPENDENT CONTRACTORS

SMALL AGRICULTURAL COOPERATIVES

SMALL AQUACULTURE BUSINESSES

MOST NON-PROFIT ORGANIZATIONS

LOSS MUST BE DIRECTLY RELATED TO COVID 19

HOW MUCH YOU CAN BORROW:

UP TO $2 MILLION DOLLARS WITH REAL ESTATE COLLATERAL

UP TO $25,000 WITHOUT COLLATERAL

AS OF 4/10/2020 THE SBA SAID THE CAP WILL BE $15,000

EIDL ADVANCE UP TO $10,000

AS OF 4/09/2019 THE SBA SAID THE LIMIT WILL BE $1,000

EIDL ADVANCE FORGIVEN

HOW CAN YOU USE LOAN FUNDS:

FIXED DEBT PAYMENTS

PAYROLL EXPENSES

ACCOUNTS PAYABLES

OTHER BUSINESS BILLS

SBA’S ECONOMIC INJURY DISASTER LOAN

INTEREST RATE ON THE LOAN:

3.75% FOR SMALL BUSINESSES

2.75% FOR ELIGIBLE NON-PROFIT ORGANIZATIONS

TERMS OF THE LOAN PAYMENT:

UP TO 30 YEARS

MONTHLY REPAYMENT EXAMPLE

$25,000 @ 3.75% OVER 30 YEARS = $115/MONTH

3-4 WEEK APPROVAL TIME

ADVANCE 1 WEEK DEPOSIT TIME

SBA’S ECONOMIC INJURY DISASTER LOAN

WHAT YOU NEED TO APPLY:

ONLINE APPLICATION

MOST RECENT BUSINESS INCOME TAX RETURN

IF NOT A 2019 THEN DECEMBER 31, 2019 PROFIT & LOSS STATEMENT

EIN NUMBER

BUSINESS BANKING ACCOUNT ROUTING NUMBER

BUSINESS BANKING ACCOUNT NUMBER

OTHER INFORMATION MAY BE REQUESTED IN PROCESS:

SCHEDULE OF LIABILITIES (SBA FORM 2202)

PERSONAL FINANCIAL STATEMENT (SBA FORM 413)

IRS 4506T FOR THE APPLICANT, PRINCIPALS AND BUSINESS AFFILIATES

HOW TO APPLY:

www.sba.gov/disaster

Call Small Business Development Center at Rhodes State College at

419-995-8184

SBA PAYCHECK PROTECTION PROGRAM

SBA PAYCHECK PROTECTION PROGRAM

WHAT IS IT

■ CARES Act

■ Form of SBA 7(a) Loan

■ Keeps Employees at Regular Payroll Level

■ Incentive to Retain Worker’s

■ Smoother Transition to Return to Operations After COVID-19

■ 250% of Eligible Payroll for 8 Weeks

■ Loan Forgiveness of up to 8 Weeks Payroll Expenses

SBA PAYCHECK PROTECTION PROGRAM

■ Can be Used With EIDL

■ Costs Cannot Be Duplicated

■ EIDL Rolls into PPP

■ EIDL Advance is Deducted From PPP Forgiveness

SBA PAYCHECK PROTECTION PROGRAMWHO IS ELIGIBLE

■ Small Businesses with Fewer than 500 Employees

■ 501(C)(3) Non-profits

■ 501(C)(19) Veterans Organizations

■ Tribal Business Concerns Described in 31(b)(2)(C)

■ Individuals Who Operate a Sole Proprietorship

■ Independent Contractor/Eligible Self-Employed Individuals

■ Qualifying Franchises <500 Employees at Each Location

SBA PAYCHECK PROTECTION PROGRAM

WHAT IS ELIGIBLE

■ Payroll Costs for Employees who Earn < $100,000 Annually

■ Costs For Group Health Benefits

■ Group Health Insurance Premiums

■ Mortgage Interest (some restrictions do apply)

■ Rent

■ Utilities

■ Other Debt Interest on Obligations Prior to February 15, 2020

■ $10 Million Dollar Maximum Amount

SBA PAYCHECK PROTECTION PROGRAM

WHAT ARE THE TERMS

■ 8 Weeks Payroll Expenses Forgiven

■ 75% Must be used for Payroll

■ Remaining 25% Becomes Loan

■ .5% Interest Rate

■ 2 Year Maturity

■ 6 Month Payment Deferment

■ No Early Payment Penalty

SBA PAYCHECK PROTECTION PROGRAMHOW MUCH CAN I BORROW

■ 250% of 2019 Annual Monthly Payroll Costs

■ Seasonal Business Eligible for Average from February 15-June 30 2019

■ New Businesses Use January 1-February 15, 2020

■ 75% Must be Used for Payroll

SBA PAYCHECK PROTECTION PROGRAMHOW CAN I APPLY

■ Contact Eligible Lender

■ www.rhodesstate.edu/sbdc - List of 7(a) Lenders

■ Application at www.sba.gov – MUST GO TO LOCAL LENDER

SBA PAYCHECK PROTECTION PROGRAMWHAT WILL I NEED TO APPLY

REGISTERED ENTITIES WILL NEED:

■ Documentation for 2019 Payroll Records

■ Documentation for Group Health Insurance Premiums Paid in 2019

■ Documentation for Amounts Paid to Retirement Plan Funding

SOLE PROPRIETORS/INDEPENDENT CONTRACTORS WILL NEED:

■ Form 1099- MISC for Independent Contractor

■ Income/Expenses for Sole Proprietor OR

■ Other Supporting Documents ie. Bank Statements, Invoices, etc.

SBA PAYCHECK PROTECTION PROGRAMHOW WILL LOAN BE FORGIVEN

■ Return to Lender after 8 Weeks

■ Documentation for:

– Number of Employees

– Payroll Rates

– Payroll Tax Expenses (IRS, State Income Tax, Unemployment)

– Mortgage Payments

– Lease Payments

– Utility Payments

■ Certification by Owner or Legal Representative to Attest Proper Use

SBA PAYCHECK PROTECTION PROGRAMQUESTIONS

SBDC at Rhodes State College

www.rhodesstate.edu/sbdc

KATHY KELLER 419-995-8184

CRAIG BROWN 419-303-6611

America’ SBDC

www.americassbdc.org

Small Business Administration

www.sba.gov