If you are a small business, more than likely you have heard about the CARES Act the U.S. Small Business Administration (SBA) has enacted. While applications for the Act are not yet available, there are still steps you should be taking to make sure you are prepared to submit your application for the Paycheck Protection Program (PPP) once it goes into effect.

It is extremely important that you act quickly as the applications are processed on a first come, first serve basis. While the $350 Billion allotted for the program seems like a lot, those funds will be used up quickly.

Jeff Yakes from Yakes and Associates and Justin Kidd from Peoples Bank kindly provided us with an update on the loan process and steps we should all be doing right now to help secure the funds we need during this time of crisis.

Important Loan Information

1) The applications for the Paycheck Protection funds will not be available until either Thursday or Friday of this week (April 2nd or 3rd).

2) The SBA will determine the amount of the loan and not the bank.

3) The loan amount will be based on payroll, utilities, mortgage interest (not the principal), insurance expense, and rent. This will be the monthly average; however, the months have not been disclosed yet by the SBA. This average amount will then be multiplied by 2.5 resulting in your maximum amount of the loan.

4) These applications will need to be submitted with a bank that handles SBA loans. We are recommending you verify that your bank is an SBA preferred lender. This means that the bank has an internal SBA team within the bank. Otherwise, your application will then be rerouted to the SBA, losing valuable time.

Steps to Take with Your Bank

Reach out to your bank and verify the are an SBA preferred lender.

If you are unsure where to turn, Peoples Bank, an SBA preferred lender, has a process in place to help expedite your loan application. It begins with completing a submission form found on: https://www.peoplesbancorp.com/coronavirus/businessloan. You do not have to be a current client of Peoples to submit. The submission will allow Peoples to know which businesses are interested in the program, start working on internal resources, and share information with potential borrowers. This IS NOT an application for the loan, but it will help Peoples Bank expedite the process when the details are final. You can enter Justin Kidd as your preferred banker if you are not currently working with someone.

Reaching out to your bank can help you with more than your SBA loan as well. They can also assist in suspending mortgage payments (both commercial and residential), lines of credit payments, and auto loans. The banks are making this deferment very easy for consumers, no questions asked for 90-day deferments.

What Should You Do Now?

  1. Contact your bank regarding the SBA loan if you have not already.
    1. Make sure they are an SBA preferred lender
    2. Ask if they have a process they are having clients follow.
    3. Ask what type of information you should be gathering.
  2. Begin gathering information.
    1. To see what type of information will be needed for the loan application, the SBA provided a sample form for people to use as a reference. It can be found here.
  3. Set time aside on Thursday, April 2nd and Friday, April 3rd to fill out your application and work with your bank.