Well, halfway through the year, it seems like we have lived 100 years. Hoping and praying for health and happiness to all. I hope that you, your family, and friends, are having a safe and fun holiday weekend.
The LATEST updates on the PPP and EIDL Disaster Loan Program
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are able to apply for an Economic Injury Disaster Loan advance of up to $10,000. This advance is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue. This loan advance will not have to be repaid. Recipients do not have to be approved for a loan in order to receive the advance, but the amount of the loan advance will be deducted from total loan eligibility. SBA will begin accepting new Economic Injury Disaster Loan (EIDL) and EIDL Advance applications on June 15 to qualified small businesses and U.S. agricultural businesses. The new eligibility for U.S. agricultural businesses is made possible as a result of the latest round of funds appropriated by Congress in response to the COVID-19 pandemic. Applicants who have already submitted their applications will continue to be processed on a first-come, first-served basis. For agricultural businesses that submitted an EIDL application through the streamlined application portal prior to the legislative change, SBA will process these applications without the need for re-applying.
Updates for small business owners and individuals in Simple Language ** Economic Injury Disaster Loan Emergency Advance Program
Professional Funding Company is in the coronavirus disaster along with other small businesses. #weareallinthistogether. We are working to ensure small business owners get advice and updates that might not be available or readily found by individuals and small business owners. There is a lot of misinformation which further confuses those trying to access emergency coronavirus disaster funds. Our team is working to ensure we assist in getting the information out as we learn it. Here is the latest information and updates we have as of April 13, 2020. This information was given by an Inside SBA associate, if there is any incorrect information we apologize as information changes frequently.
Latest Information from SBA 4/11/2020 via phone to SBA Processing Department. (I want to thank Ben who kindly gave me facts when I informed him I was a business loan consultant. Thank you Ben
Misinformation: Up to $10,000 for all small businesses
New Information: The program allows for $1000 per employee up to $10,000. This does not have to be paid back. This will be processed upon receipt of your EIDL application. There is not a one time $10,000 automatic payment.
The EIDL SBA Information site advises: ” In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available following a successful application. This loan advance will not have to be repaid
The SBA’s Economic Injury Disaster Loan provides vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing as a result of the COVID-19 pandemic.
This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organizations or 501(c)(19) veterans organizations affected by COVID-19.
Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.
The Economic Injury Disaster Loan advance funds will be made available within days of a successful application, and this loan advance will not have to be repaid.
UPDATE: This was not made available within days as initially announced. Program has been shut down without many business owners getting any funds.
What happens after I submit my business application?
The SBA has hired a large amount of employees to assist in speeding up the funding process. At this time we can’t state how long the process will take. We applied around March 25, 2020. Up until today our business had received no email updates, requests for information or funds. What we were told via phone today:
If additional information is required the SBA will send an email to the business contact. They advise to check your spam regularly. They also advise to ensure it is the SBA. Any email that you receive about a grant, loan, advance is properly scammers. Any email from the SBA will be from sba.gov. No government entity ever calls for information over the phone. But scammers do and they are working overtime to steal your identity and can imitate Government organizations very well. Do not fall for their scams and remember all government emails and websites will end with .gov. Do not send information unless you receive an email requesting it from the sba.gov site.
UPDATE: This program has been an EPIC failure for small business owners. You can’t check status of application. Call centers can’t check application status.
Question and Answers:
Q: How long will it take to get any funds.
A: As a small business we wish we could answer this question but the magnitude of this disaster has left many business owners without information. So we are taking our experience and information we receive to try and assist business owners. Days ago an individual would have waited hours to speak with an SBA associate if they could even get through. Today we started at the 1675 caller(whos really counting though) and within a short time got through to a very knowledgeable associate who took our phone number in case we got disconnected and advised not to call back but wait if that happens. We were disconnected and received an immediate return call. This is good news. We invested less than an hour from the time of the call to completion.
Q: Do I have to submit any information with my EIDL application.
A: The system will ask questions about gross sales from Jan 31, 2019 to application date compared to Jan. 31, 2020. If SBA needs any information they will email a request.
Q: Can I apply for the EIDL disaster loan/grant and the PPP(Paycheck Protection Program)?
A: The $10,000 for employees is considered a grant. You can get $1000 per employee up to 10. The Working Capital(That we just learned was available) funds $15,000 for 60 days. We do not know the exact details but those funds are supposed to go out immediately to assist businesses in paying expenses to stay in business.
Q: Are these funds limited to small businesses?
A: No, the EIDL is available for all businesses.
Q: Do I have to cash flow or have good credit to qualify for these funds?
A: These programs are for disaster relief. The are not like a regular SBA loan that might require strong cash flow and credit.
If you have any additional questions please contact us at 813-531-0654 or email firstname.lastname@example.org
Information on EIDL direct from benefits.gov:
The Small Business Administration’s (SBA) disaster loans are the primary form of Federal assistance for the repair and rebuilding of non-farm, private sector disaster losses. The disaster loan program is the only form of SBA assistance not limited to small businesses.
The Economic Injury Disaster Loan Program (EIDL) can provide up to $2 million of financial assistance (actual loan amounts are based on amount of economic injury) to small businesses or private, non-profit organizations that suffer substantial economic injury as a result of the declared disaster, regardless of whether the applicant sustained physical damage.
An EIDL can help you meet necessary financial obligations that your business or private, non-profit organization could have met had the disaster not occurred. It provides relief from economic injury caused directly by the disaster and permits you to maintain a reasonable working capital position during the period affected by the disaster. EIDLs do not replace lost sales or revenue.
To be eligible for EIDL assistance, small businesses or private non-profit organizations must have sustained economic injury and be located in a disaster declared county or contiguous county.Check if you may be eligible for this benefit(Since this publishing all 50 states have been declared Disaster Zones)
The SBA can provide up to $2 million in disaster assistance to a business. The $2 million loan cap includes both physical disaster loans and EIDLs. There are no upfront fees or early payment penalties charged by SBA. The repayment term will be determined by your ability to repay the loan.
Apply online for disaster loan assistance at your own convenience through SBA’s secure Disaster Loan Assistance website.
Professional Funding Company can package, process and submit your SBA PPP loans. The government has announced that the loan can be forgiven if the borrower meets certain criteria for employee retention. The CARES Act allotted $349 Billion to Small Business PPP loans. The government announced that loans would start being processed and funded on April 3, 2020. However, it was obvious the night of April 2, 2020 that; although the President was saying everything was perfect and applications would be ready to be funded the next day, banks and lenders were not ready. Almost every major bank announced they would either not process applications or would process them in system but not approve and fund any loans.
There was an announcement on April, 8 2020, that the final interim terms had been completed. But banks were still posting announcements on their websites that although they would take client applications there were issues with the program and there could be a delay in receiving funds. And as of this writing, it seems that banks are more comfortable with new credit facilities the Feds are implementing and the revised terms. I noted a few institutions announcing that they still didn’t have the proper promissory note from the SBA for clients to sign and would not process any fundings until that form was provide. This is a fast changing program so check in on our updates for any changes or new announcements.
Call us Now for assistance 813-531-0654 or email email@example.com
The Paycheck Protection Program (“PPP”) authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. All loan terms will be the same for everyone.
The loan amounts will be forgiven as long as:
· The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made; and
· Employee and compensation levels are maintained.
Payroll costs are capped at $100,000 on an annualized basis for each employee. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
Loan payments will be deferred for 6 months.
When can I apply?
· Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
· Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
· Other regulated lenders will be available to make these loans as soon as they are approved and enrolled in the program.
Where can I apply? You can apply through any existing SBA lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating. Visit www.sba.gov for a list of SBA lenders. NOTE: Professional Funding Company is a Certified and Approved SBA Agent authorized to assist small businesses in filing for SBA Disaster Relief; as well as, SBA504, 7A, Microloan, and Express Loan
Who can apply? All businesses – including nonprofits, veterans organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors – with 500 or fewer employees can apply. Businesses in certain industries can have more than 500 employees if they meet applicable SBA employee-based size standards for those industries (click HERE for additional detail).
For this program, the SBA’s affiliation standards are waived for small businesses (1) in the hotel and food services industries (click HERE for NAICS code 72 to confirm); or (2) that are franchises in the SBA’s Franchise Directory (click HERE to check); or (3) that receive financial assistance from small business investment companies licensed by the SBA. Additional guidance may be released as appropriate.
What do I need to apply? You will need to complete the Paycheck Protection Program loan application and submit the application with the required documentation to an approved lender that is available to process your application by June 30, 2020. Professional Funding Company is accepting applications to process immediately. To request information and application call 813-531-0654 or go to https://www.professionalfundingcompany.com/contact/
What other documents will I need to include in my application? You will need to provide your lender with payroll documentation.
Do I need to first look for other funds before applying to this program? No. We are waiving the usual SBA requirement that you try to obtain some or all of the loan funds from other sources (i.e., we are waiving the Credit Elsewhere requirement).
How long will this program last? Although the program is open until June 30, 2020, we encourage you to apply as quickly as you can because there is a funding cap and lenders need time to process your loan.(Note therewas $349 Billion allotted for the PPProgram for all small businesses.)
How many loans can I take out under this program? Only one.
What can I use these loans for? You should use the proceeds from these loans on your:
· Payroll costs, including benefits;
· Interest on mortgage obligations, incurred before February 15, 2020;
· Rent, under lease agreements in force before February 15, 2020; and
· Utilities, for which service began before February 15, 2020.
What counts as payroll costs? Payroll costs include:
· Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee);
· Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit;
· State and local taxes assessed on compensation; and
· For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.
How large can my loan be? Loans can be for up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount. That amount is subject to a $10 million cap. If you are a seasonal or new business, you will use different applicable time periods for your calculation. Payroll costs will be capped at $100,000 annualized for each employee.
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.
What is my interest rate? 1% fixed rate.
When do I need to start paying interest on my loan? All payments are deferred for 6 months; however, interest will continue to accrue over this period.
When is my loan due? In 2 years.
Can I pay my loan earlier than 2 years? Yes. There are no prepayment penalties or fees.
Do I need to pledge any collateral for these loans? No. No collateral is required.
Do I need to personally guarantee this loan? No. There is no personal guarantee requirement.
***However, if the proceeds are used for fraudulent purposes, the U.S. government will pursue criminal charges against you.***
What do I need to certify? As part of your application, you need to certify in good faith that:
· Current economic uncertainty makes the loan necessary to support your ongoing operations.
· The funds will be used to retain workers and maintain payroll or to make mortgage, lease, and utility payments.
· You have not and will not receive another loan under this program.
· You will provide to the lender documentation that verifies the number of full-time equivalent employees on payroll and the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight weeks after getting this loan.
· Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
· All the information you provided in your application and in all supporting documents and forms is true and accurate. Knowingly making a false statement to get a loan under this program is punishable by law.
· You acknowledge that the lender will calculate the eligible loan amount using the tax documents you submitted. You affirm that the tax documents are identical to those you submitted to the IRS. And you also understand, acknowledge, and agree that the lender can share the tax information with the SBA’s authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews.
Professional Funding Company Pamela Hewett Phone: 813-531-0654 Assistance in SBA Disaster Relief loans, Real estate cash out refinance, AR/Inventory financing, Working Capital, True lines of credit, Equipment leasing/financing, and Debt consolidation. SBA 504, 7A also available
Paycheck Protection Program Application – Contact us for additional information required
The Current Wall Street Journal Prime Rate is: 3.25%
(the last rate change — a decrease of 75 basis points
[0.75 percentage point] — occurred on December 16, 2008)
The U.S. Prime Rate is a commonly used, short-term interest rate in the banking system of the United States. All types of American lending institutions (traditional banks, credit unions, etc.) use the U.S. Prime Rate as an index or foundation rate for pricing various short-term loan products. The Prime Rate is consistent because banks want to offer businesses and consumers loan products that are both profitable and competitive. A consistent U.S. Prime Rate also makes it easier and more efficient for individuals and businesses to compare similar loan products offered by competing banks.
When newspapers, academics, investors and economists refer to the National, Fed, U.S. or WSJ Prime Rate, it is widely accepted that they are in fact referring to The United States Prime Rate as listed in the Eastern print edition of the Wall Street Journal® (WSJ). Furthermore, each U.S. state does not have its own individual Prime Rate, so the “New York Prime Rate” or the “California Prime Rate” are in fact the same as the United States Prime Rate.
Traditionally, the WSJ Prime Rate was determined by polling thirty (30) of America’s largest banks. When twenty-three (23) of those 30 banks had changed their prime lending rate, The WSJ would respond by updating its published Prime Rate. Effective December 16, 2008, however, the WSJ now determines the Prime Rate by polling the 10 largest banks in the United States. When at least 7 out of the top 10 banks have changed their Prime, the WSJ will update its published Prime Rate.
Providers of consumer and commercial loan products often use the U.S. Prime Rate as their base lending rate, then add a margin (profit) based primarily on the amount of risk associated with a loan. Moreover, some financial institutions use Prime as an index for pricing certain time-deposit products like variable-rate Certificates of Deposit.
It’s important to note that the Prime Rate is an index, not a law. Consumers and business owners can sometimes find a loan or credit card with an interest rate that is below the current Prime Rate. Lenders will sometimes offer below-Prime-Rate loans to highly qualified customers as a way of generating business. Furthermore, below-Prime-Rate loans are relatively common when the loan product in question is secured, as is the case with home equity loans, home equity lines of credit and car loans.
The U.S. Prime Rate is invariably tied to America’s cardinal, benchmark interest rate: the Federal Funds Target Rate (also known as The Fed Funds Target Rate.) The Fed Funds Target Rate is set by a committee within the Federal Reserve system called The Federal Open Market Committee (FOMC). The FOMC usually meets every six weeks, and it is at these meetings that the FOMC votes on whether or not to make changes to the Federal Funds Target Rate. When the Fed Funds Target Rate changes, it is almost a certainty that the Wall Street Journal Prime Rate will also change. If the FOMC votes to make no changes to The Fed Funds Target Rate, then it is almost a certainty that the WSJ Prime Rate will also remain unchanged. Since the second quarter of 1994, a rule of thumb for the U.S. Prime Rate has been:
U.S. Prime Rate = (The Fed Funds Target Rate + 3)
The FOMC’s primary objectives are to keep inflation under control and maintain steady economic growth with maximum sustainable employment within the United States.
The U.S. Prime Rate is used by many banks to set rates on many consumer loan products, such as student loans, home equity lines of credit, car loans and credit cards. If you read or hear about a change to the U.S. Prime Rate, then any loan product that is tied to the Prime Rate will also change, like variable-rate credit cards or certain adjustable-rate mortgages.
The monitor daily reported on the recent downgrade of Regions Bank.
S&P Cuts Ratings on Regions; Outlook Negative
Standard & Poor’s Ratings Services lowered its ratings on Regions Financial Corp., including lowering the counterparty credit rating to BBB-/A-3 from BBB/A-3. The outlook is negative. S&P also lowered its rating on the company’s primary subsidiary Regions Bank to BBB/A-2 from BBB2′.
“The downgrade reflects our expectation that Regions’s profitability levels should continue to be muted during 2010 given certain troubled loan exposures,” said Standard & Poor’s credit analyst Robert Hansen, CFA. “In addition, our credit stress testing, which assumes higher losses for certain loan portfolios, suggests that capital ratios could remain pressured. Nevertheless, capital ratios currently are sound.”
Credit performance in Regions’s loan portfolio could weaken further in 2010 given the bank’s various loan exposures and geographic footprint, S&P said. Specifically, S&P said it thinks the bank’s commercial real estate (CRE), commercial, and consumer loan exposures could experience higher losses than we had anticipated.
“The loan portfolio’s credit performance has not shown signs of stabilizing yet, in our view, as highlighted by the fairly high level of nonperforming asset (NPA) formation and the sequential rise in delinquent loans in fourth-quarter 2009,” the ratings agency said. “We continue to believe that Regions is more vulnerable than its large regional peers to further deterioration given its significant CRE loan exposures and large exposures in the Southeast, particularly in Florida and Georgia, which combined represent nearly 25% of total loans, by our estimate. Our credit stress testing supports these credit-loss expectations.”
S&P noted that Regions’s measures compare unfavorably to some of its large regional bank peers.
“Ongoing operating losses, growth in the balance sheet, and the disallowance of some deferred tax assets have also hurt capital measures somewhat. Regions’s tangible common equity ratio declined to approximately 6.0% as of Dec. 31, 2009, which is below certain large regional bank peers. We believe that capital ratios could trend lower given that we expect net losses to persist in the near term.
However, the company’s good competitive position in the markets in which it operates supports our ratings on Regions. A strong liquidity profile also supports the ratings.
“We have widened the notching of the preferred stock rating with respect to the company’s rating to four notches. Although we do not believe this is an immediate risk, deferral risk would rise if capital ratios were hurt by additional net losses.
The negative outlook reflects our belief that the rating could remain under pressure, given our ongoing concerns regarding Regions’s significant loan exposures to the CRE, commercial, and consumer segments. If credit quality, operating performance, or capital ratios deteriorate beyond our current expectations, we could lower the rating again. More specifically, the rating may come under further pressure if NPAs, including past-due and restructured loans, approach 8% of total loans or if the tangible common equity ratio declines toward 5%. Alternatively, if financial performance improves or stabilizes for several quarters, we could revise the outlook to stable, which we view as less likely given our negative industry outlook for the U.S. banking sector.”