A word of awareness & patience on SBA Loans to our clients, partners, friends & family:

Today (April 3rd) is the first day a business or non-profit can submit applications for the new federal $350 billion Paycheck Protection Program (PPP).

PPP loans, unlike the SBA disaster loans folks were applying for last week, are processed through SBA lenders and are 100 percent guaranteed by SBA with forgivable features, meaning employers don’t have to pay back them back, under certain conditions.

The process is not going to be easy and finding a bank that can help may be difficult at first…patience and persistence (and some kindness and empathy for your local bank) will be crucial here.

A couple of tips on the PPP Loans:

• PPP Loans have forgivable features and are best used to continue to meet payroll demands
• Generally – you can apply for 2.5 Months of Payroll Costs*
• As of now ONLY banks that are SBA lenders can participate
• Many banks do not have the infrastructure set up for PPP Loans yet
• Many non-SBA lenders are working hard to be able to participate in this program within the coming days
• If you have a lending relationship at an existing bank – start with that bank
• Some banks have strict requirements…for example Bank of America requires you have an existing Business Deposit AND existing Business Lending relationship to apply – which is clearly disappointing and excludes thousands of their existing customers

*See www.SBA.gov for details

Finally, courtesy of our friends at the Newton-Needham Chamber of Commerce we have this guidance from the Massachusetts Office of Economic Development on SBA Loans:

“Whether you’ve already received an EIDL unrelated to COVID-19 or you receive a COVID19 related EIDL and/or Emergency Grant between January 31, 2020 and June 30, 2020, you may also apply for a PPP loan. If you ultimately receive a PPP loan or refinance an EIDL into a PPP loan, any advance amount received under the Emergency Economic Injury Grant Program would be subtracted from the amount forgiven in the PPP. However, you cannot use your EIDL for the same purpose as your PPP loan. For example, if you use your EIDL to cover payroll for certain workers in April, you cannot use PPP for payroll for those same workers in April, although you could use it for payroll in March or for different workers in April.”

Go here to learn more about all the SBA loan and debt relief options.

Need help, finding a banker? Here’s a list of the Newton-Needham Chamber’s member banks.

Please e-mail us at info@arsenalfinancial.com or call us at 781-335-9100 if you need to talk through this. We are here for you through this crisis.

~Doug Orifice & the Arsenal Financial Team

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