Loan Program Update as of April 14, 2020
We hope everyone remains healthy.
There are some recent developments that we want to bring to your attention. Yesterday a great number of people received the following email directly from the SBA:
On March 29, 2020, following the passage of the CARES Act, the SBA provided small business owners and non-profits impacted by COVID-19 with the opportunity to obtain up to a $10,000 Advance on their Economic Injury Disaster Loan (EIDL). The Advance is available as part of the full EIDL application and will be transferred into the account you provide shortly after your application is submitted. 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.
This narrative is totally different to the original statement made by the SBA that did not mention employees at all. A number of people have applied for this grant who do not have employees. Unfortunately it now appears that the SBA has changed the rules of the game or, shall we say, refined them.
Secondly, we are starting to hear of clients and other third parties that are starting to receive both the EIDL grants as well as monies under the Paycheck Protection Program (PPP). Every bank’s process seems to be different and some have performed better than others. Unfortunately, there is not much you can do other than to be ready when the call or the email link comes to get the correct information filed.
Finally, many people are starting to ask about the forgiveness portion of the monies they receive. We have attached a brief primer from Investors Bank on this and the whole PPP program. It also explores the process regarding forgiveness. There are still a great number of details missing but it will start to focus your thoughts on this process. We are suggesting that it might be a good idea for recipients of the loans to place them in a separate account and then make the required disbursements that qualify for forgiveness from that account. We believe this will help in the process of accumulating the data you will need to support the forgiveness amount.
Please stay well and healthy.
If you need our help you know where to find us.
The Partners and staff LHF