SBA Loan Program

Passage of the federal CARES has created two important SBA loan options for stations with 500 or less employees.  Even if your station does not qualify, you have local advertisers that could benefit from the SBA loan program.  So feel free to forward this information.

To access the SBA COVID-19 Resource center click HERE.

Payroll Protection Program (PPP Loan) – This loan is administered through SBA approved lending institutions. Contact your lending institution to see if they are approved to administer SBA loans.

Congress has passed the Payroll Protection Program Flexibility Act. This legislation will significantly change key components of the PPP program. This legislation:

  • Extends the time you can pay for expenses that will be forgiven under PPP from 8 weeks to 24 weeks.
  • You can use the 24-week period to restore your workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must be done by Dec. 31, a change from the previous deadline of June 30th.
  • Payroll expense requirements drops from 75% of loan proceeds to 60%. Stated another way, the amount of the loan that can be used for non-payroll purposes increased from 25% to 40%.
  • If you do not use at least 60% of the loan for payroll, you lose your eligibility for forgiveness for the entire loan. Currently the rule requires 75% of the loan to be used for payroll, but your forgiveness is reduced proportionally if you do not meet this  requirement. This is now changed.
  • The legislation includes two new exceptions. The new bill allows borrowers to adjust workforce compliance levels if: 1) you could not find qualified employees or 2) were unable to restore business operations to Feb. 15, 2020, levels due to COVID-19 related operating restrictions.
  • Loan maturity for parts of the loan that are not forgiven has been extended from 2 to 5 years.  Interest rate remains at 1%.
  • Businesses with a PPP loan may also delay payment of their payroll taxes, which was prohibited under the CARES Act.

Note the bill does not extend existing loans to allow PPP loan holders to obtain more money.  The legislation simply allows you to extend the time period over which you may spend money from your initial loan, from 8 weeks to 24 weeks.  It does not repeal the SBA rule limiting  you to only one loan.  Corporations that have more than 500 employees nationwide are still excluded from obtaining a PPP loan.

We urge you to consult your accountant or business manager to make sure you meet the new 60% payroll requirement.

The new bill HR 1070 can be found HERE.

A discussion of the new law from the Bonadio Group can be found HERE.

Contact your lending institution ASAP.

The Treasury Department issued several informative documents HERE.

PPP Information from the SBA HERE.

PPP Borrower FAQs and Answers HERE.

Find an Eligible SBA Lender (search by zip code)

Interim Final Rules – Read pages 5-18 for explanations about borrower eligibility.

PPP Borrower Application Form HERE.

For instructions click HERE.

Economic Injury and Disaster Loans (EIDL) – These loans are administered directly by the SBA. You do not need to go through an SBA lending institution.

The SBA has been limiting these loans to agricultural businesses.

The SBA has opened a new EIDL Loan Application web page

For a Side By Side Comparison of Programs from the Bonadio Group CPA Firm click HERE

To watch a webinar from the Bonadio Group explaining both SBA Loan Programs click HERE.  (Frankly this is the best webinar I have seen on the subject)

See New York State Business Council summary of the Payroll Protection Program HERE.