SBA resumed accepting PPP applications on April 27

On April 24, lawmakers approved $484 billion in additional funding for small businesses, including $310 billion for the PPP. SBA resumed accepting PPP applications on April 27. Check the SBA’s Coronavirus webpage for additional information.

SBA EIDL Loan and Advance Update (5/4/2020)

SBA has resumed processing EIDL applications that were submitted before the portal stopped accepting new applications on April 15 and will be processing these applications on a first-come, first-served basis. SBA will begin accepting new Economic Injury Disaster Loan (EIDL) and EIDL Advance applications on a limited basis only to provide relief to U.S. agricultural businesses.

Check the SBA’s Coronavirus webpage for additional information on both programs.

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NC Job Retention Grant

Governor Roy Cooper announced a new Job Retention Grant, funded by the CARES Act and administered by the NC Department of Commerce. Those eligible include for-profit businesses in the state, as well as some nonprofits – provided they did not receive benefits of another relief program such as the SBA's Paycheck Protection Program or the Fed's Main Street Lending program.

Eligible firms have to demonstrate they were negatively impacted by the pandemic, meaning their sales or gross receipts dropped at least 10 percent during the COVID period (March to May). They must also have maintained at least 90 percent of their North Carolina workforce from what it was in February.

Qualifying companies could be in line for grants worth up to 125 percent of two months of payroll – capped at a maximum of $250,000. As the company counts its payroll, it can’t include wages, salaries or bonuses for any individual employee that makes in excess of $100,000.

When applications close on Sept. 1, the state will take a look at eligible applicants, add up their maximum grant sums and, if it exceeds $15 million, everyone will be pro-rated in a lesser amount. More information, including FAQs and a sample application are available on the Job Retention Grant website.

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SBA Paycheck Protection Program

The CARES Act includes $349 billion for a federal small business loan program called the Paycheck Protection Program (PPP). The program is designed to get cash in the hands of small businesses quickly, and incentivize business owners to keep employees on payroll by offering them loan forgiveness. This loan provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. SBA will fully forgive the loan if all employees are retained and if 75% of more of the money is used on payroll.

Who can apply?

In order to be eligible, you must be a small business (500 employees or less). Starting April 3, small businesses and sole proprietors can access this program. Starting April 10, independent contractors and self-employed individuals can apply. Some nonprofits also qualify.

How can the loan be used?

For payroll (including benefits), interest on mortgage, rent and utilities.

How much of the loan will be forgiven?

In order to be fully forgiven, you must retain all employees. In addition, 75% of more of the loan must be used on payroll. If you are unable to retain all employees, you will be required to repay a portion of the loan.

What are the loan terms?

Interest rate is 1%. All payments are deferred for six months, though interest will continue to accrue during this period. Any portion of the loan that is not forgiven will need to be repaid within 2 years. You do not need to pledge any collateral to receive this loan.

How to apply?

This program is available through participating SBA lenders. A spreadsheet of North Carolina based participating lenders can be found here. A list of active 7(a) lenders in North Carolina (also participating in PPP) is available here. Additionally, click here for a list of fintech PPP lenders.

View and download the application here, but be sure to connect with your lender to determine if there are other forms and documentation you need to fill out and submit.

What materials will you need to apply?

Reach out to a participating lender and work with them to gather the necessary documentation such as:

• Payroll and payroll tax records for the last year
• For sole proprietors: you will need documentation of income and expenses. If this is not available, you must provide supporting documentation such as bank records to demonstrate payroll amount.
• Calculate your maximum borrow level:
  

  	Step 1: Aggregate payroll costs from the last twelve months for employees whose principal place of residence is the United States.
  	Step 2: Subtract any compensation paid to an employee in excess of annual salary of $100,000
  	Step 3: Calculate average monthly payroll costs (divide the amount from Step 2 by 12).
  	Step 4: Multiply the average monthly payroll costs from Step 3 by 2.5.
  	Step 5: Add the outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020, less the amount of any “advance” under an EIDL COVID-19 loan (because it does not have to be repaid).

Do independent contractors count as employees for purposes of loan forgiveness?

No, independent contractors have the ability to apply for a PPP loan on their own so they do not count for purposes of a borrower’s PPP loan forgiveness.

If I apply for a PPP, can I still apply for other SBA disaster loans?

Yes. However, you cannot use your PPP loan for the same purpose as your other SBA loan(s). If you received an SBA Economic Injury Disaster Loan (EIDL), you can apply for a PPP loan. If your EIDL loan was not used for payroll costs, it does not affect your eligibility for a PPP loan. If your EIDL loan was used for payroll costs, your PPP loan must be used to refinance your EIDL loan. Proceeds from any advance up to $10,000 on the EIDL loan will be deducted from the loan forgiveness amount on the PPP loan.

Accepting an Approved Loan? Stop First to Consider:

If you have already laid off employees, you should be sure they will come back prior to accepting the full loan. In order to be fully forgiven, you must maintain full payroll. Employees may be collecting new unemployment benefits that provide an increase in pay.

PPP Loan Forgiveness Application & Instructions

On May 18 the SBA released a PPP Loan Forgiveness Application form and detailed instructions that will help small businesses seek forgiveness at the conclusion of the eight-week covered period, which begins with the disbursement of their loans. They 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

Click here to view the application and instructions.

Small Business PPP Information, Tools, and FAQs (Treasury Department)

The Treasury Department is maintaining a CARES Act “Assistance for Small Businesses” web page that contains useful links to borrower and lender information and application forms, interim final rules, and FAQs.

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SBA ECONOMIC INJURY DISASTER LOANS (EIDL)

The U.S. Small Business Administration is offering low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Here's key information you need to know:

Eligibility

In order to be eligible, you must be a small business (500 employees or less). Eligible businesses include:

• North Carolina small businesses affected by the disaster - common eligible businesses include retailers, restaurants, recreational facilities, tourism-based businesses, manufacturers, owners of rental property, hotels, and wholesalers
• Private non-profits
• Small agriculture cooperatives are eligible, but agricultural enterprises are not
• Small aquaculture businesses

Criteria for loan approval

• Credit history – Applicants must have a credit history acceptable to SBA
• Repayment – SBA must determine that the applicant business has the ability to repay the SBA loan
• Eligibility – The applicant business must be located in a declared disaster area and have suffered working capital losses due to the declared disaster

Use of loan funds

These working capital loans may be used to pay fixed debts, payroll, accounts payable, and other bills that could have been paid had the disaster not occurred. The loans are not intended to replace lost sales or profits or for expansion.

Application amount

You will not be asked how much you would like to borrow. The SBA uses the information you provide to determine the loan amount. Small businesses can receive a secured loan up to $2 million, and an unsecured loan up to $25,000.

Interest rate and term

The interest rates for this disaster at 3.75 percent for small businesses and 2.75 percent for non-profit organizations.

Collateral requirements

• Economic Injury Disaster Loans over $25,000 require collateral
• SBA takes real estate as collateral when it is available
• SBA will not decline a loan for lack of collateral, but requires borrowers to pledge what is available

Basic filing requirements

• Completed SBA loan application (SBA Form 5 or 5C)
• Tax information authorization (IRE Form 4506T) for the applicant and other business principals
• Complete copies of the most recent Federal Income Tax Return.
• Schedule of Liabilities (SBA Form 2202)
• Personal Financial Statement (SBA Form 413)
• Current year—to-date profit and loss statement
• Monthly sales figures (SBA Form 1368)

How to apply

To apply for a COVID-19 Economic Injury Disaster Loan, click here.

Up to $10,000 Advance on SBA EIDL

Small business owners and non-profits now have the opportunity to get up to a $10,000 Advance on an Economic Injury Disaster Loan (EIDL). To qualify for the Advance on an EIDL, visit https://covid19relief.sba.gov to fill out a new, streamlined application. The Advance may be available even if an EIDL application was declined or is still pending, and will be forgiven.

Per SBA guidance on April 13, 2020: To ensure that the greatest number of applicants can receive assistance during this challenging time, the amount of your Advance will be determined by the number of your 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.

To apply for the Advance, businesses need to submit a new application even if they previously submitted an EIDL application. According to SBA, applying for the Advance will not impact the status or slow existing applications.

Likely Timelines

SBA is projecting that once a completed application is received, it will take 2-3 weeks to get a “yes or no” decision. If the loan is approved, it will take approximating 7 days to receive the funds. Taken together, it will likely take about a month between submitting a completed application and receiving the loan proceeds.

Application assistance

While the application process may seem daunting, assistance with preparing financial statements and submitting the loan application is available from the SBTDC and other partners.

For information on the status of your economic injury disaster loan

Contact SBA disaster customer service: (1) By phone at 1-800-659-2955 (TTY/TDD: 1-800-877-8339); or (2) via email at disastercustomerservice@sba.gov

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SBA Eligibility for Faith-Based Organizations

On April 4, 2020, SBA issued guidance clarifying that all faith-based organizations impacted by Coronavirus (COVID-19) are eligible to participate in the Paycheck Protection Program and the Economic Injury Disaster Loan program, without restrictions based on their religious identity or activities, to the extent they meet the eligibility criteria outlined in the CARES Act. See details in the SBA Faith-Based FAQs.

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SBA Express Bridge Loans

The Express Bridge Loan Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 with less paperwork. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster Loan. If a small business has an urgent need for cash while waiting for decision and disbursement on Economic Injury Disaster Loan, they may qualify for an SBA Express Bridge Loan.

Businesses may apply for up to $25,000. The loan will be repaid in full or in part by proceeds from the SBA EIDL loan. To find an Express Bridge Loan Lender, see SBA’s Lender Match Tool or contact the NC SBA District Office.

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SBA Debt Relief for Existing Loans

As part of SBA's debt relief efforts, the SBA will automatically pay the principal, interest, and fees of current 7(a), 504, and microloans for a period of six months. The 6 month payment relief is not a deferment, but actual debt forgiveness. The SBA will also automatically pay the principal, interest, and fees of new 7(a), 504, and microloans issued prior to September 27, 2020.

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Deferments for SBA-Serviced Loans

To assist borrowers that have been adversely affected by COYID-19-related economic disruptions, the U.S. Small Business Administration (SBA) is providing deferment relief to its existing borrowers on certain SBA-serviced loans (disaster home and business loans and SBA-purchased 504 debentures) through December 31, 2020. For existing SBA borrowers with loans serviced by SBA that were in "regular servicing'" status on March I, 2020, SBA is providing an automatic deferment of principal and interest. For additional details, see the SBA Procedural Notice.

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NC COVID-19 Rapid Recovery Loan Program

The North Carolina COVID-19 Rapid Recovery Lending program supports North Carolina small businesses and family farms as they recover from the economic impact of COVID-19. This rapid recovery loan helps small businesses bridge the gap between when crisis strikes and when federal loans, insurance payouts, and other relief funds are approved, or businesses have time to recover.

NC COVID-19 Rapid Recovery loans are not designed to be a singular source of assistance for small businesses. Repayment is expected either from more permanent funding sources or from the future cash flow of the business.

Loan Details

Loans are available for up to $50,000, based on the business’s current revenue. Loan agreements are structured as follows:

• Loan sizes capped at approximately two months of current revenue.
• Six months of no interest and no payments, followed by 48 months of principal and interest payments at 5.5% interest.
• Interest will begin to accrue on any unpaid balance at the beginning of the seventh month.
• There are no prepayment penalties.
• Defaulted loans are subject to collections.

Who is eligible?

• Applicants must be a North Carolina small business affected by COVID-19 (all 100 NC counties are eligible).
• Applicants must have at least one (1) employee, who could be the self-employed owner.
• Start-up businesses that began operations before March 23, 2020 are eligible.

Requirements

• Any individual with greater than 20% ownership in the applying business must personally guarantee the loan.
• Proceeds from the loan may only be used for maintaining or restarting a business.
• The use of loan funds to pay off debts already incurred for qualifying business maintenance or restart purposes may be authorized on a case-by-case basis.
• Borrowers are required to assign the proceeds of future assistance programs, including SBA loans, to the repayment of their Rapid Recovery Loan.

Logistics & Timeline

• Businesses interested in applying should be prepared to complete an online application and provide tax returns, profit and loss statements, and bank statements.
• The partners in this program are committed to moving quick to assist businesses and they will be in touch with applicants as soon as possible.
• Loans subject to availability of funds.

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Main Street Lending Program

The Federal Reserve has announced that it is establishing a Main Street Lending Program (Program) to support lending to small and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 pandemic. The Program will operate through three facilities: the Main Street New Loan Facility (MSNLF), the Main Street Priority Loan Facility (MSPLF), and the Main Street Expanded Loan Facility (MSELF). U.S. businesses may be eligible for loans if they meet either of the following conditions: (1) the business has 15,000 employees or fewer; or (2) the business had 2019 revenues of $5 billion or less. Loans issued under the Program would have a four year maturity, and principal and interest payments on the loans will be deferred for one year. Eligible lenders may originate new loans (under MSNLF and MSPLF) or increase the size of (or "upsize") existing loans (under MSELF) made to eligible businesses.

For details, visit the program website and the Main Street Lending Program Overview.

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COVID-19 Capital Relief Database

CASE at Duke launched #COVID19CapitalRelief, a searchable database for global, national and regional capital sources for profit and nonprofit entrepreneurs at risk due to #COVID19. It already contains over 90 capital offerings worth over $14.5 billion.

To learn more: https://www.linkedin.com/pulse/helping-entrepreneurs-covid19-world-part-2-over-145-billion-clark
To find capital: https://bit.ly/COVID19CapitalRelief

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Federal Coronavirus Tax Relief

The U.S. Treasury Department and Internal Revenue Service have announced that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020. Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.

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N.C. Department of Revenue Special Penalty Relief

N.C. Department of Revenue recently announced that they will extend the April 15 tax filing deadline to July 15 for individual, corporate, and franchise taxes to mirror the announced deadline change from the Internal Revenue Service. In addition to the filing extension, the NCDOR will not charge penalties for those filing and paying their taxes after April 15, as long as they file and pay their tax before the updated July 15 deadline.

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EXIM Export Credit Insurance

As of April 1, Export-Import Bank of the United States (EXIM) Export Credit Insurance relief measures are as follows:

1. Multi-Buyer and Single-Buyer Short-Term Insurance Program

• Streamlined processing of multi-buyer policy renewals that are eligible for renewal within 60 days from the date of this notification;
• Extension of expiry dates of up to 30 days for exporter single-buyer policy (ESS) renewals that expire within 60 days from the date of this notification;
• Streamlined processing of all Special Buyer Credit Limit (SBCL) renewals that expire on or before April 1, 2020, including the extension of the final shipment date up to 30 days;
• Extension of up to 30 days for shipment reporting and premium payment deadlines for all shipments made during a 30-day period from the date of this notification;
• Extension of overdue reporting requirements for up to 30 days for all overdues that would normally have required reporting during the next 30 days from the date of this notification;
• Extension of up to 30 days beyond the claim filing period if the claim filing deadline specified in the policy occurs within 30 days from the date of this notification;
• Flexibility in claims analysis and the documentation necessary to file a claim; and
• If you are a financial institution with a Letter of Credit Policy or Financial Institution Buyer Credit Policy, please contact us if assistance is needed to address concerns regarding your insurance-related obligations.

2. Medium-Term Single-Buyer Insurance Policies Issued to Exporters

• Extension of up to 30 days beyond the claim filing period if the claim filing deadline specified in the policy occurs within 30 days from the date of this notification;
• Extension of up to 30 days for policies that expire within 60 days from the date of this notification;
• Extensions of up to 30 days of shipment reporting and premium payment deadlines for all shipments made during a 30-day period from the date of this notification;
• Flexibility in claims analysis and the documentation necessary to file a claim; and
• If you are a financial institution or a policyholder/guaranteed lender financing impacted exporters, please contact us if assistance is needed to address concerns regarding EXIM coverage obligations.

Should you have any questions regarding this fact sheet, we encourage you to contact Sharyn Koenig | sharyn.koenig@exim.gov | (305) 526-7436 x17

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US Chamber “Save Small Business” Fund

The U.S. Chamber of Commerce Foundation is launching the Save Small Business Fund. Funded by contributions from corporate and philanthropic partners, the Foundation will provide $5,000 supplemental grants to small employers in economically vulnerable communities.

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City and County Small Business Emergency Funds

Orange County | Carrboro

Buncombe County | City of Asheville

Downtown Wilmington

City of Charlotte

City of Greensboro

City of Raleigh

Town of Apex

Haywood County

Jackson County

City of Fayetteville (via CEED)

Wake County (Wake Forward)

Guilford County

City of Durham