SMALL BUSINESS ADMINISTRATION UPDATES
"Schedule an Online Appointment" with SUNY Stony Brook or SUNY Farmingdale Small Business Developmental Center for COVID-19 Economic Injury Disaster Loans (EIDL) - Click Here for Info
*The Small Business Administration strongly suggests if you wish to apply for "up to" a $10,000 Advance on your EIDL, please visit www.SBA.gov/Disaster as soon as possible to fill out a new, streamlined application. In order to qualify for the Advance, you need to submit this new application even if you previously submitted an EIDL application prior to March 31st. Applying for the $10,000 Advance will not impact the status or slow your existing application.*
Small Business Assistance from Congressman Zeldin - https://zeldin.house.gov/smallbusinessassistance
NEW INTERIM FINAL RULE ISSUED BY TREASURY: The Treasury Department has issued a new interim final rule which is posted on their website, this one related to loan increases. https://home.treasury.gov/system/files/136/Interim-Final-Rule-on-Loan-Increases.pdf
1. Loan Increases
- If a partnership received a PPP loan that did not include any compensation for its partners, can the loan amount be increased to include partner compensation?
Yes. If a partnership received a PPP loan that only included amounts necessary for payroll costs of the partnership’s employees and other eligible operating expenses, but did not include any amount for partner compensation, the lender may electronically submit a request through SBA’s E-Tran Servicing site to increase the PPP loan amount to include appropriate partner compensation, even if the loan has been fully disbursed, provided that the lender’s first SBA Form 1502 report to SBA on the PPP loan has not been submitted. After the initial SBA Form 1502 report on the PPP loan has been submitted to SBA, or after the date the first SBA Form 1502 was required to be submitted to SBA, the loan cannot be increased. In no event can the increased loan amount exceed the maximum loan amount allowed under the PPP Program, which is $10 million for an individual borrower or $20 million for a corporate group. Additionally, the borrower must provide the lender with required documentation to support the calculation of the increase. The interim final rule posted on April 14, 2020, describes how partnerships, rather than individual partners are eligible for a PPP loan. The interim final rule further explained that the self-employment income of general active partners could be reported as a payroll cost, up to $100,000 annualized, on a PPP loan application filed by or on behalf of the partnership. Guidance describing how to calculate partnership PPP loan amounts and defining the self-employment income of partners was posted on April 24, 2020 (see How to Calculate Maximum Loan Amounts, Question 4 at https://www.sba.gov/sites/default/files/2020-04/How-toCalculate-Loan-Amounts.pdf).
- If a seasonal employer received a PPP loan before the alternative criterion for determining the maximum loan amount for seasonal employers became available, can the loan amount be increased based on a revised calculation using the alternative criterion?
Yes. If a seasonal employer received a PPP loan before the alternative criterion for such employers was posted on April 28, 2020, and would be eligible for a higher maximum loan amount under the alternative criterion, the lender may electronically submit a request through SBA’s E-Tran Servicing site to increase the PPP loan amount, even if the loan has been fully disbursed, provided that the lender’s first SBA Form 1502 report to SBA on the PPP loan has not been submitted. After the initial SBA Form 1502 report has been submitted to SBA, or after the date the initial SBA Form 1502 report was required to be submitted to SBA, the loan cannot be increased. In no event can the increased loan amount exceed the maximum loan amount allowed under the PPP Program, which is $10 million for an individual borrower or $20 million for a corporate group. Additionally, the borrower must provide the lender with required documentation to support the calculation of the increase.
The FAQ was updated last night with 2 additional FAQ’s regarding extending the date for safe harbor and affiliation rules for entities with foreign and U.S. affiliates (Q 43 & 44)
- Question: What if a Borrower has two sole proprietorships with the same SS#?
Answer from 7aPaycheckLoanQuestions@sba.
If a borrower has more than 1 Schedule C Business that uses the same SS#, then the information of both businesses needs to be combined, and you will use both DBA names as applicable in the Borrower information screen. You will document your internal file indicating as such. As you have already approved 1 PPP Loan, you can request an increase as long as no disbursements have been made and there is still loan funds in the PPP loan program.
- Question: Does the 10-day disbursement window include weekends?
Answer: 10 calendar days
page 2. Disbursements a. Can a borrower take multiple draws from a PPP loan and thereby delay the start of the eight-week covered period? No. The lender must make a one-time, full disbursement of the PPP loan within ten calendar days of loan approval; for the purposes of this rule, a loan is considered approved when the loan is assigned a loan number by SBA.1
- Question: Are Homeowners Associations eligible for PPP?
Answer from HQ’s: Yes, they are eligible for EIDL’s also. Caveat: As long as it doesn’t discriminate on who can live there. For example, 55+ Homeowner Associations are not eligible.
§120.176 Compliance with other laws.
All SBA loans are subject to all applicable laws, including (without limitation) the civil rights laws (see parts 112, 113, 117 and 136 of this chapter), prohibiting discrimination on the grounds of race, color, national origin, religion, sex, marital status, disability or age. SBA requests agreements or evidence to support or document compliance with these laws, including reports required by applicable statutes or the regulations in this chapter.
- How do I calculate employees under PPP?
- Lender forgiveness: Not much has come out yet but we know the below
How much of my loan will be forgiven? You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
You will also owe money if you do not maintain your staff and payroll.
· Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount.
· Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.
· Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.
How can I request loan forgiveness? You can submit a request to the lender that is servicing the loan. The request will include documents that verify the number of full-time equivalent employees and pay rates, as well as the payments on eligible mortgage, lease, and utility obligations. You must certify that the documents are true and that you used the forgiveness amount to keep employees and make eligible mortgage interest, rent, and utility payments. The lender must make a decision on the forgiveness within 60 days.
As of May 3, 2020 - New guidance issued today. https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequently-Asked-Questions.pdf
Question: Will a borrower’s PPP loan forgiveness amount (pursuant to section 1106 of the CARES Act and SBA’s implementing rules and guidance) be reduced if the borrower
laid off an employee, offered to rehire the same employee, but the employee declined the offer?
Answer: No. As an exercise of the Administrator’s and the Secretary’s authority under Section 1106(d)(6) of the CARES Act to prescribe regulations granting de minimis exemptions from the Act’s limits on loan forgiveness, SBA and Treasury intend to issue an interim final rule excluding laid-off employees whom the borrower offered to rehire (for the same salary/wages and same number of hours) from the CARES Act’s loan forgiveness reduction calculation. The interim final rule will specify that, to qualify for this exception, the borrower must have made a good faith, written offer of rehire, and the employee’s rejection of that offer must be documented by the borrower. Employees and employers should be aware that employees who reject offers of re-employment may forfeit eligibility for continued unemployment compensation.
As of April 29, 2020 - “The Economic Injury Disaster Program was appropriated $7 billion though the annual agency appropriation process. Congress provided an additional $10 billion for EIDL Advances in the original CARES Act as well as an additional appropriation of $60 billion in the subsequent appropriations bill. With a total EIDL (EIDL + EIDL Advance) congressional appropriation of $77 billion, the SBA is unable to accept new applications at this time for both COVID-19 EIDL related assistance programs based upon available appropriations funding and current completed applications. Applicants who have already submitted their EIDL Applications will continue to be processed on a first come first serve basis. If someone previously had submitted an application, received correspondence from SBA, and has a loan number that begins with a “3” then they are in the queue and their patience is appreciated. If an applicant would like to further inquire about the process and understand what to expect next, they should contact the SBA Office of Disaster Assistance 24/7 Customer Service line at 800-659-2955. “