COVID-19 Small Business Resources

Updated January 20, 2021.

On December 27, 2020, the Consolidated Appropriations Act, now referred to as the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act or Economic Aid Act (EAA) for short, was signed into law. The EAA revises the federal stimulus package in several significant ways by implementing a Second Draw Paycheck Protection Program, Targeted Economic Injury Disaster Loan, and by modifying the Small Business Administration Debt Relief Program.

Learn more about its components below.

The Paycheck Protection Program (PPP) is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

The CARES Act first introduced the PPP in March of 2020. Applications for the original PPP closed on August 8, 2020. However, the implementation of the Economic Aid Act on Decenter 27, 2020 re-introduced a new component referred to as PPP Round 2, which allots $284 billion toward job retention and certain other expenses.

Key PPP updates include:

  • PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;
  • PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
  • The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, destination marketing organizations, among other types of organizations;
  • The PPP provides greater flexibility for seasonal employees;
  • Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
  • Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.

 

A borrower is generally eligible for a Second Draw PPP Loan if it:

  • Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
  • Has no more than 300 employees; and
  • Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

 

 

The new guidance released includes:

Need a little more information? Check out our webinar covering the new guidance held on January 8:
Slide Deck
Recording
Key Milestone Dates

Participating Local Lenders:
Access to Capital for Entrepreneurs
Ameris Bank
Atlantic Capital Bank
Bank of America
BB&T now Truist
Fifth Third Bank
First American Bank & Trust
First Citizens Bank
Loyal Trust Bank
Peach State Federal Credit Union
Piedmont Bank
Regions Bank
Renasant Bank
Synovus
Tandem Bank
United Community Bank
Wells Fargo

 

First Draw PPP Loan forgiveness terms
First Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:

  • Employee and compensation levels are maintained
  • The loan proceeds are spent on payroll costs and other eligible expenses; and
  • At least 60 percent of the proceeds are spent on payroll costs

Second Draw PPP Loan forgiveness terms
Second Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8 to 24 week covered period following loan disbursement:

  • Employee and compensation levels are maintained in the same manner as required for the First Draw PPP loan
  • The loan proceeds are spent on payroll costs and other eligible expenses; and
  • At least 60 percent of the proceeds are spent on payroll costs

How and when to apply for loan forgiveness
A borrower can apply for forgiveness once all loan proceeds for which the borrower is requesting forgiveness have been used. Borrowers can apply for forgiveness any time up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred, and borrowers will begin making loan payments to their PPP lender.

To apply for loan forgiveness:

1. Contact your PPP Lender and complete the correct form:
Your Lender can provide you with either the SBA Form 3508, SBA Form 3508EZ, SBA Form 3508S, or a Lender equivalent.
The 3508EZ and the 3508S are shortened versions of the application for borrowers who meet specific requirements. Your Lender can provide further guidance on how to submit the application.

2. Compile your documentation:
Payroll (provide documentation for all payroll periods that overlapped with the Covered Period or the Alternative Payroll Covered Period):

  • Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees
  • Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period or the Alternative Payroll Covered Period:
    • Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and
    • State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state
    • Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the borrower included in the forgiveness amount

Non-payroll (for expenses that were incurred or paid during the covered period and showing that obligations or services existed prior to February 15, 2020):

  • Business mortgage interest payments: Copy of lender amortization schedule and receipts verifying payments, or lender account statements
  • Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments
  • Business utility payments: Copies of invoices and receipts, cancelled checks or account statements

This list of documents required to be submitted to the Lender is not all-inclusive.

3. Submit the forgiveness form and documentation to your PPP Lender:
Complete your loan forgiveness application and submit it to your Lender with the re­quired supporting documents and follow up with your Lender to submit additional documentation as requested. Consult your Lender for additional guidance and provide requested documentation in a timely manner.

4. Continue to communicate with your Lender throughout the process:
If SBA undertakes a loan review of your loan, your Lender will notify you of the review and the SBA loan review decision. You have the right to appeal certain SBA loan review decisions. Your Lender is responsible for notifying you of the forgiveness amount paid by SBA and the date on which your first payment will be due, if applicable.

Please Note:
Recent legislation has eliminated the original requirement to deduct the amount of EIDL Advance you may have received from your PPP loan forgiveness. Additional guidance and updated forms are forthcoming.
Frequently Asked Questions about PPP Loan Forgiveness (10-13-2020)

 

On March 18, the U.S. Small Business Administration (SBA) designated all counties in Georgia eligible for low-interest federal disaster loans for working capital to small businesses suffering economic injury during this national event. As a part of the Economic Aid Act (EAA) that was signed into law on December 27, 2020, provisions have been made by re-introducing the $10K grant component, which has been extended until December 31, 2021.

Key EIDL updates include:
To qualify for the full $10,000 EIDL grant, a business must:

  • Be located in a low-income community, and
  • Have suffered an economic loss greater than 30%, and
  • Employ no more than 300 employees.

Repeals the EIDL Advance Deduction from forgiveness (those already forgiven will be ‘made whole’).

Targeted Advances to eligible entities:

  • “Grosses-up” the difference between what was granted earlier and $10k
  • Provides $10k grant to those who did not get grants because funding had run out.

In addition, the business must qualify as an eligible entity as defined in the CARES Act:

  • A small business, cooperative, ESOP Tribal concern, with fewer than 300 employees
  • An individual who operates under as a sole proprietorship, with or without employees, or as an independent contractor; or a private non-profit or small agricultural cooperative.
  • The business must have been in operation by January 31, 2020.
  • The business must be directly affected by COVID-19.

ECONOMIC LOSS —The term “economic loss” means, with respect to a covered entity—
(A) the amount by which the gross receipts of the covered entity declined during an 8-week period between March 2, 2020, and December 31, 2021, relative to a comparable 8-week period immediately preceding March 2, 2020, or during 2019; or
(B) if the covered entity is a seasonal business concern, such other amount determined appropriate by the Administrator.

 

 

Applicants may also call SBA’s Customer Service Center at 1.800.659.2955 or email disastercustomerservice@sba.gov.


Pays an additional 3 months of principal and interest (P&I) on existing 7(a), 504 and Microloans

Begins in February 2021 – capped at $9,000 per month

After 3 months – businesses with selected NAICS codes will receive an additional 5 months of P&I payments – capped at $9000 per month

Designated NAICS Codes beginning in: 61, 71, 72, 213, 315, 448, 451, 481, 485, 511, 512, 515, 531, or 812.

Pays 6 months of P&I for any new SBA guaranteed loans approved before Sept. 30, 2021.
Plus 3 months after first 6 months of payments.
Plus 5 months if you have a qualifying NAICS Code.

Improvements have been made to the SBA 7(a) program.
Increased SBA guarantee level to 90%
Reduced or eliminated some fees.

Express Bridge Loan Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. If a small business has an urgent need for cash while waiting for decision and disbursement on an Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan.

Terms

  • Up to $25,000
  • Fast turnaround
  • Will be repaid in full or in part by proceeds from the EIDL loan

The Gwinnett Chamber prides itself on offering accurate and up-to-date information so you can make informed decisions in this time of ambiguity. However, the current environment is fluid and changes do not always funnel down immediately.

Sources
U.S. Small Business Administration; University of Georgia Small Business Development Center; The White House

Resource Partners

Gwinnett County has a solid small business support system. We are here for you. Contact the below organizations if you need assistance.

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