Crow Shields Bailey PC – SBA Loan & Loan Forgiveness Information

Our team has been researching around the clock to keep you up to date on the latest details regarding the COVID-19 crisis. What we currently know is that the CARES Act that includes the Paycheck Protection Program (SBA Loans) has been signed by the President, but the banks are still waiting guidance from the SBA. We have spoken with numerous bankers, and although they do not know the specifics of what will be required for the loan application, they have suggested to us that you start gathering the following information. It is imperative that you have this to us as soon as possible. $350 billion has been set aside for this program, but those funds will move quickly because everyone in the country will be applying. As far as we know, loans will be processed on a first come, first serve basis. There may be additional items they will require or the items below may change, but as of today, this is what they think will be required. Please call us at 251-343-1012 with any questions you have so we can have you at the front of the line with your bank.

• Personal and Business Financial
  • SBA Personal Financial Statement
  • Last 3 years of Personal Tax Returns filed
• Business Financial Info
  • Last 3 years of Business Tax Returns filed
  • YTD Profit & Loss and Balance Sheet dated 02-15-2020 and most recent if applicable
  • SBA Business Schedule of Liabilities
• Business Ownership (Articles of Inc., Operating Agreement, etc.)
• Business Overview/History
• Copies of Business Leases
• Description of how COVID-19 has impacted your business
  • Outline income shortfalls
  • Have you experienced any supply chain or other business interruptions?
  • Have you experienced a delay in receipt of accounts receivable?
  • What steps have you taken to anticipate or mitigate risk related to the Coronavirus (i.e. contingency plan, travel ban, work from home, quarantine, business closure etc.)?
  • Employees retained during impacted period
  • Utility Costs
  • All scheduled debt and lease payments made during impact.
  • Number of employees, payroll cost and frequency
• Monthly payroll costs for the past twelve months
  • Payroll costs include the sum of the following:
    • Salaries, wages, or commissions
    • Payment of cash tip or equivalent
    • Payment for vacation, parental, family, medical, or sick leave
    • Allowance for dismissal or separation
    • Payment required for the provisions of group health insurance premiums
    • Payment of any retirement benefit
    • Payment of State or local tax assessed on the compensation of employees

A summary of the loan program is below. Let us know how we can best serve you.

Maximum Loan Amount During the covered period, with respect to a covered loan, the maximum loan amount shall be the lesser of  the average monthly payroll costs incurred during the 1-year period before the date on which the loan is made  times 2.5 or $10,000,000, whichever is less.

Loan Maturity Maximum of 10 years from the date on which the borrower applies for loan forgiveness under that section. Covered Loans will be required to be deferred for 6 months to a maximum 12 months

Fees: All SBA Guaranty Fees normally applicable to the 7a loan will be waived

Certification As a condition of receiving a loan under this section, a borrower shall certify under terms acceptable to the Secretary that the borrower— (1) does not have an application pending for a loan under section 7(a) of the Small Business Act (15 U.S.C. 636(a)) for the same purpose; and (2) has not received such a loan during the period beginning on February 15, 2020 and ending on December 31, 2020.

Loan Forgiveness Borrowers are eligible for loan forgiveness equal to the amount spent by the borrower during an eight-week period after the origination date of the loan on the following items: payroll costs; interest payment on any mortgage note incurred prior to February 15, 2020; payment of rent on any lease in force prior to February 15, 2020; and payment on any utility for which service began before February 15, 2020.

• Amounts forgiven may not exceed the principal amount of the loan. Eligible payroll costs do not include compensation to any employee above $100,000 in wages.
• Amounts forgiven will be reduced proportionally by any reduction in employees retained during the eight-week period after the date of the loan as compared to either (i) the period from February 15, 2019 to June 30, 2019 or (ii) the period from January 1, 2020 to February 29, 2020. The borrower can elect the period of time used for the analysis.
• Amounts forgiven will also be reduced by the reduction in pay of any employee beyond twenty-five percent (25%) of their compensation for the most recent full quarter during which the employee was employed.
• Borrowers that re-hire workers previously laid off will not be penalized for having a reduced payroll at the beginning of the period.
• The remaining loan balance of any portion of a loan that is not forgiven will have a maturity of not more than ten (10) years