COVID-19 Small Business Relief Options – S-One Holdings Corporation

COVID-19 Small Business Relief Options

Updated 04/27/2020 at 10:06AM EDT

Additional Funding Notice: The SBA will resume accepting Paycheck Protection Program applications from participating lenders on Monday, April 27, 2020 at 10:30am EDT.

With the additional funding provided by the new COVID-19 relief package, SBA will resume processing EIDL Loan and Advance applications that are already in the queue on a first come, first-served basis.

There are several programs being introduced, two of which have the biggest effect on businesses in our industry; the Paycheck Protection Program and the Economic Injury Disaster Loan. Collectively, these programs widen the pool of eligible businesses and provide additional assistance to companies struggling to maintain operations and keep employees on the payroll.

The Paycheck Protection Program (PPP) is part of the new CARES Act stimulus package. This federal loan program is aimed at helping small businesses who have been severely impacted by Coronavirus. You can call your bank or find SBA-approved lenders in your area through SBA’s online Lender Match tool. In addition to the Paycheck Protection Program loan, the U.S. Small Business Administration (SBA) is offering an Economic Injury Disaster Loan (EIDL) to small business owners. You can apply for this low-interest loan directly through the SBA via online portal here. Businesses with immediate needs may consider applying for an EIDL first, then seek to refinance with a PPP loan.

In addition to the PPP and EIDL, the Small Business Administration is providing express bridge loans to businesses who currently have a relationship with an SBA express lender. The SBA is also providing a financial reprieve to small businesses during the COVID-19 pandemic.

Resources & Quick Links

SBA Funding Options

Paycheck Protection Program

This loan program provides loan forgiveness for retaining employees by temporarily expanding the traditional SBA 7(a) loan program.

EIDL Loan Advance

This loan advance will provide up to $10,000 of economic relief to businesses that are currently experiencing temporary difficulties.

SBA Express Bridge Loans

Enables small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly.

SBA Debt Relief

The Small Business Administration is providing a financial reprieve to small businesses during the COVID-19 pandemic.


	Paycheck Protection Program	Economic Injury Disaster Loan
Eligibility	A small business with fewer than 500 employees A 501(c)(3) with fewer than 500 employees Sole proprietors and independent contractor Self-employed individuals	A small business with fewer than 500 employees A 501(c)(3) with fewer than 500 employees Sole proprietors and independent contractor Self-employed individuals
Uses	Payroll Expenses Employee Salaries Mortgage Interest Rent and Utilities Interest on debt incurred before 2.15.20	Payroll Expenses Fixed Debts Accounts Payable Other expenses that can’t be paid because of the disaster’s impact
Amount	2.5X average monthly payroll (up to $10 million)	Up to $2 million EIDL applicants may also request an emergency grant directly from SBA of up to $10,000. Such advances are considered grants rather than loans and are not subject to repayment, even if the EIDL is later denied.
Interest	Fixed 4% APR	3.75% APR
Payment Terms	10-year term No payments for 6-12 months	Up to 30 years
Loan Forgiveness	Up to 100% with approval	Up to $10,000 if any emergency grant is approved. 0% of remainder
Who to Contact	You can apply for the Paycheck Protection Program (PPP) at any lending institution that is approved to participate in the program through the existing U.S. Small Business Administration (SBA) 7(a) lending program and additional lenders approved by the Department of Treasury. You can call your bank or find SBA-approved lenders in your area through SBA’s online Lender Match tool.	Directly through the SBA via online portal here.

Paycheck Protection Program FAQs for Small Businesses

Where can I apply for the Paycheck Protection Program?

You can apply for the Paycheck Protection Program (PPP) at any lending institution that is approved to participate in the program through the existing U.S. Small Business Administration (SBA) 7(a) lending program and additional lenders approved by the Department of Treasury. This could be the bank you already use, or a nearby bank. There are thousands of banks that already participate in the SBA’s lending programs, including numerous community banks. You do not have to visit any government institution to apply for the program. You can call your bank or find SBA-approved lenders in your area through SBA’s online Lender Match tool. You can call your local Small Business Development Center or Women’s Business Center and they will provide free assistance and guide you to lenders.

Who is eligible for the loan?

You are eligible for a loan if you are a small business that employs 500 employees or fewer, or if your business is in an industry that has an employee-based size standard through SBA that is higher than 500 employees. In addition, if you are a restaurant, hotel, or a business that falls within the North American Industry Classification System (NAICS) code 72, “Accommodation and Food Services,” and each of your locations has 500 employees or fewer, you are eligible. Tribal businesses, 501(c)(19) veteran organizations, and 501(c)(3) nonprofits, including religious organizations, will be eligible for the program. Nonprofit organizations are subject to SBA’s affiliation standards. Independently owned franchises with under 500 employees, who are approved by SBA, are also eligible. Eligible franchises can be found through SBA’s Franchise Directory.

I am an independent contractor or gig economy worker; am I eligible?

Yes. Sole proprietors, independent contractors, gig economy workers, and self-employed individuals are all eligible for the Paycheck Protection Program.

What is the maximum amount I can borrow?

The amount any small business is eligible to borrow is 250 percent of their average monthly payroll expenses, up to a total of $10 million. This amount is intended to cover 8 weeks of payroll expenses and any additional amounts for making payments towards debt obligations. This 8-week period may be applied to any time frame between February 15, 2020 and June 30, 2020. Seasonal business expenses will be measured using a 12-week period beginning February 15, 2019, or March 1, 2019, whichever the seasonal employer chooses.

How can I use the money such that the loan will be forgiven?

The amount of principal that may be forgiven is equal to the sum of expenses for payroll, and existing interest payments on mortgages, rent payments, leases, and utility service agreements. Payroll costs include employee salaries (up to an annual rate of pay of $100,000), hourly wages and cash tips, paid sick or medical leave, and group health insurance premiums. If you would like to use the Paycheck Protection Program for other business-related expenses, like inventory, you can, but that portion of the loan will not be forgiven.

When is the loan forgiven?

The loan is forgiven at the end of the 8-week period after you take out the loan. Borrowers will work with lenders to verify covered expenses and the proper amount of forgiveness.

What is the covered period of the loan?

The covered period during which expenses can be forgiven extends from February 15, 2020 to June 30, 2020. Borrowers can choose which 8 weeks they want to count towards the covered period, which can start as early as February 15, 2020.

How much of my loan will be forgiven?

The purpose of the Paycheck Protection Program is to help you retain your employees, at their current base pay. If you keep all of your employees,the entirety of the loan will be forgiven. If you still lay off employees, the forgiveness will be reduced by the percent decrease in the number of employees. If your total payroll expenses on workers making less than $100,000 annually decreases by more than 25 percent, loan forgiveness will be reduced by the same amount. If you have already laid off some employees, you can still be forgiven for the full amount of your payroll cost if you rehire your employees by June 30, 2020.

Am I responsible for interest on the forgiven loan amount?

No, if the full principal of the PPP loan is forgiven, the borrower is not responsible for the interest accrued in the 8-week covered period. The remainder of the loan that is not forgiven will operate according to the loan terms agreed upon by you and the lender.

What are the interest rate and terms for the loan amount that is not forgiven?

The terms of the loan not forgiven may differ on a case-by-case basis. However, the maximum terms of the loan feature a 10-year term with interestcapped at 4 percent and a 100 percent loan guarantee by the SBA. You will not have to pay any fees on the loan, and collateral requirements and personal guarantees are waived. Loan payments will be deferred for at least six months and up to one year starting at the origination of the loan.

When is the application deadline for the Paycheck Protection Program?

Applicants are eligible to apply for the PPP loan until June 30th, 2020.

I took out a bridge loan through my state; am I eligible to apply for the Paycheck Protection Program?

Yes, you can take out a state bridge loan and are still be eligible for the PPP loan.

If I have applied for, or received an Economic Injury Disaster Loan (EIDL) related to COVID- 19 before the Paycheck Protection Program became available, will I be able to refinance into a PPP loan?

Yes. If you received an EIDL loan related to COVID-19 between January 31, 2020 and the date at which the PPP becomes available, you would be able to refinance the EIDL into the PPP for loan forgiveness purposes. However, you may not take out an EIDL and a PPP for the same purposes. Remaining portions of the EIDL, for purposes other than those laid out in loan forgiveness terms for a PPP loan, would remain a loan. If you took advantage of an emergency EIDL grant award of up to $10,000, that amount would be subtracted from the amount forgiven under PPP.

Source: U.S. Senate Committee on Small Business & Entrepreneurship.

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