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SBA Payroll Protection Plan Package Submission

Starter Kit

The information contained in this presentation is provided from sources deemed reliable but not guaranteed by CHV Group LLC. The entities and their representatives providing the information contained herein shall in no way be responsible for the content, accuracy, and truthfulness of such information obtained from third party sources. Information is subject to change which may invalidate certain subject matter provided. All recipients of this information are responsible to fact check and/or perform due diligence prior to taking any action with the information provided.

Signs of Things to Come…

• SBA Preferred Lenders & Brokers are about to be overwhelmed

• Many will restrict loan applications to depository & existing clients only

• SBA is likely to invite non-traditional players into the process

• American Express and others are expected to join in the application process

• Reduced rates/terms & increased origination fees will incent 3rd parties

• Know who you are working with

• Traditional industry resources are your best bet


Points of order that will keep things moving smoothly and your loan processed efficiently.

• Only forward application and supporting documents when your lender confirms a complete list of what they need. Piecing together your submission will only slow your lender down.

• Sending your application or a random list of documents in without a complete package should not have any bearing on how you “get in line” with your loan application.

• Do start collecting items that will be requested NOW, don’t wait for a final list.

• Review all required information and get familiar with it as there will be questions.

• Stay in communication with your lender but don’t bog them down with unnecessary communication as they are going to be overwhelmed helping all their clients.


Payroll Expense Verification Documents We Know You Will Need…

• If you use a payroll processor, you will want to contact them to obtain a report detailing these payroll costs.

• IRS Form 940 (available with payroll processor)

• Payroll Summary Report or Employee Pay Stubs (including payroll benefits, vacation, healthcare, retirement, etc.) as of 2/15/2020 with corresponding bank statement

• 1099s (if Independent Contractor)

• Detailed monthly/annual payroll data and reports for all 12 months of 2019.

• Copies of payroll tax reports filed with the IRS for the entire year of 2019 and first quarter of 2020 (if available).

• Documentation reflecting the health insurance premiums paid by the business under a group health plan.

• Documentation of all retirement plan funding paid for by the business for the past 12 months.


Verification Documents You Will Need For Forgiveness Portion of Loan…

• 2019 business tax returns, if available.

• If not available , 2019 Year End Interim P&L and Balance Sheet

• 2020 interim P&L and balance sheet (as of the date of the application, if available)

• Most Recent Mortgage Statement and/or Rent Statement/Lease

• Most Recent Business Utility Bills (electric, gas, telephone, internet, water)


So Who & How Can CHV Help?

Business & Owners That Will Qualify for SBA Assistance No Assistance Needed With Loan Package Prep – Fast Path To Lender

Business & Owners That Will Qualify for SBA Assistance Needs Assistance With Loan Package Prep – Lender Doesn’t Have Time

Business & Owners That Will Not Qualify for SBA Assistance Loan Package Prep Is Not Possible Based On Business Condition


CARES Act

Paycheck Protection Program:

• SBA Loan delivered by Authorized Lenders who “Elect” to participate • Banks, Credit Unions, Farm Credit, Others

• Business < 500 employees, Non-Profits 501(c)(3), Self-Employed, Veterans Organization or Tribal Business

• 100% SBA Guarantee

• No recourse, no personal guarantee, no collateral, no pre-payment

• No fees, 1 % interest; 2 yr. max maturity

• 100% or less Forgivable if used as designed (Payroll Portion)

Paycheck Protection Program

Can be used for:

• Payroll Expenses

• Benefits – health care, leave, insurance premiums

• Salary, Commissions, Independent Contractors *

• Mortgage Interest or Rent

• Utilities

• Interest on any other debt incurred before the covered period


Maximum amount you can apply for:

Avg total monthly payments for payroll cost during prior 1 yr. period (Salaries, Wages, Tips, Commissions, Benefits, Vacation/Leave, Separation or Dismissal, Health

Care / Insurance, Retirement Benefits, State & local Taxes, Independent Contractor or Sole Proprietor wages, commissions, income or net earnings)

Limited to $100k max / employee* X

2 .5

Maximum Loan Amount

(Can add EIDL into this loan / not more than $10 million total)


Special Notes on PAYROLL:

• Each employee must have principal place of residence in US

• Employee compensation is limited to max $100,000 annual salary

• Federal employment taxes imposed or withheld including employers portion of FICA are not included in the calculation

• Qualified sick and family leave wages for which a credit is allowed are not included in the calculation

• INDEPENDENT CONTRACTORS CAN NOT BE INCLUDED IN THE CALCULATIONS – they should apply separately


Eligibility:

• In operation on February 15, 2020

• Has employees or paid independent contractors

• Borrower must certify: • Loan is to support ongoing operations • Funds used to retain workers and make mortgage, lease, utility payments • No other pending applications with others • Has not received any other duplicative loans

• Business / Sole Proprietor = 4/3/20

• Independent Contractors / Self-Employed = 4/10/20


Application:

• All SBA certified lenders; Federally Insured Depository Institutions, Federally Insured Credit Unions, Farm Credit Institutions

• Standard Application – throughout USA

• Lenders must verify: • In operation on Feb 15, 2020 • Has employees for whom they paid salaries & payroll taxes – (plus covered

mortgage interest / rent, utilities for forgiveness 8 wks. post loan) • Verify dollar amount of average monthly payroll costs

• Application Deadline = June 30, 2020

SBA – Economic Injury Disaster Loans

Applicants MAY apply for BOTH PPP & EIDL:

• Waives 1 year of Operation requirement

• Waives Personal Guarantee requirement * < $200k

• Waives inability to get credit elsewhere test

• Waives requirement to provide Tax Returns • SBA may approve solely on credit score

• SBA may use alternative methods to determine applicant ability to repay

• PROVIDE ADVANCE AMOUNTS (Grants) OF UP TO $10,000 on application – no repayment required

SBA - Economic Injury Disaster Loan

Can be used for:

• Working Capital – cash, A/R, Inventory / WIP, A/P, wages, taxes, debt

• Paying Fixed Debts – short term liabilities (not refinance)

• Payroll Expenses

• Accounts Payable / operating expenses

• Any obligation that cannot be met due to revenue losses

• Other expenses incurred as a result of the disasters impact

• ONLINE EXPRESS APPLICATION – NO FORMS TO SUBMIT

Pandemic Unemployment Assistance

Who is “covered individual”:

• Not eligible for regular compensation or extended benefits • Even those who have already exhausted all rights

• Self certifies – • Able and available for work except for health emergency

• Is self-employed

Who is “ineligible”:

• Has the ability to telework with pay

• Receiving paid sick leave or other paid leave benefits

Pandemic Unemployment Assistance

How much $:

• The weekly benefit amount authorized under the unemployment compensation laws of the State

• Plus $600 / week, UI / STC or Pandemic UA for 4 mos. – 4/1 – 7/31 • Including first week – no State wait period

For How Long:

• As long as the covered individual's unemployment, partial unemployment or inability to work due to COVID-19 continues

• Additional 13 weeks – after State runs out - until 12/31/2020

2020 Pandemic Rebates

How much $:

• $1,200 / individual or $2,400 joint return

• $500 x number of qualifying children (on tax return)

• Phased out for AGI > $150k Joint, $112.5k HOH, $75k individual • ($99k single / $198k joint)

• Est 5/4 for direct deposit, 5/18 for checks • Distribution in groups – lowest AGI to highest AGI

What is it:

• Credit against tax imposed for 2020 (advanced refund)

Special Rules for Retirement Funds Use

How much $:

• Up to $100,000 withdrawal • No taxable event on distribution

• Can repay without penalty

• Temporary Waiver of Minimum Required Distributions

Employee Retention Credit for Employers

How much $:

• Applicable Employment Taxes for each calendar quarter

• 50 % of qualified wages, not to exceed $10,000 / employee / qtr.

• If amount of credit exceeds payments due, treated as overpayment and refunded by IRS

Time Period:

• Starts in quarter where gross receipts < 50 % of same period last yr.

• Ends in quarter where gross receipts > 80% of same period last yr.

Labor & Finance Committee Provisions

Labor – Families First Response Act:

• Rehire laid off employees so they can be included in loans

• Advancing refund credits

• Allowing changes to Employee Benefit Plan funding target

Finance – Telehealth Implementation:

• Expands Telehealth into several areas of medicine

• Any Licensed provider can practice via Telehealth

• Coverage under Medicare Part B

Summary Aid Available for Businesses

SBA - Paycheck Protection Program – delivered by Lenders:

• Covers Payroll, Benefits, Salary, Commission, Interest, Rent, Utilities

• Forgivable loan

SBA Economic Injury Disaster Loan – SBA direct:

• Covers Working Capital, all other expenses incurred

• Partial grant – loan can have up to 30 yr. term

SBA Express Bridge Loan – delivered by Lenders:

• Fast turnaround, Up to $25,000

• Will be repaid in full or in part by proceeds from the EIDL loan

Business Application Roadmap

1. Families First Leave Act – Tax Credits • Investigate to make sure business is using all available tax credits

2. Unemployment Insurance / Short-Time Compensation • Investigate to make sure business is using all available aid

3. SBA Economic Injury Disaster Loan – SBA direct - $10k Grant

Or

3. SBA Express Bridge Loan – delivered by Lenders - $25k

4. Paycheck Protection Program Loans – delivered by Lenders

Additional Resources

SBA.gov / coronavirus

Whitehouse.gov

Coronavirus.gov

www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave

https://oui.doleta.gov/unemploy/docs/stc_fact_sheet.pdf

https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources




https://www.whitehouse.gov/








https://www.coronavirus.gov/

http://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave








