This document summarizes various SBA COVID-19 relief programs for small businesses, including the Paycheck Protection Program (PPP). The PPP provides loans to cover 8 weeks of payroll costs that may be fully forgiven if jobs are maintained. Other programs include the Economic Injury Disaster Loan (EIDL) Advance of up to $10,000 and SBA Express Bridge Loans of up to $25,000 to help overcome temporary loss of revenue. Details are provided on loan calculations, eligibility, and documentation required for each program.

1. SBA Debt Relief For Small Businesses
COVID-19
Prepared By: Sylvie Luanghy

2. The CARES Acts contains $379 billion in
relief for small businesses.
This document outlines the relief options
available for your business/organization
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Source: SBA Prepared By: Sylvie Luanghy

3. Paycheck Protection Program (PPP)
◦ All businesses that were in operation on February 15, 2020 with 500 or fewer employees.
◦ Loan to pay up to 8 weeks of your payroll costs including benefits.
◦ Your loan can/ may be fully forgiven if all employees are kept on your payroll for eight weeks
and the money is used for payroll costs, interest on mortgages, rent, and utilities.
◦ Loan payments will be deferred for six months.
◦ No collateral or personal guarantees are required to apply for the loan.
◦ Terms of the loan is for 2 years with 1%. Interest rate.
◦ There are no fees to apply for a PPP loan.
Source: SBA Prepared By: Sylvie Luanghy

4. Who Can Apply For the PPP?
Small business with less than 500 employees
◦ Sole proprietorships.
◦ Independent contractors.
◦ Self-employed persons.
◦ Freelancers, Gig economy workers
◦ 501 (c) (3) non-profit organizations with fewer than 500 employees.
◦ 501(c) (19) veterans organizations affected by coronavirus/COVID-19.
◦ Small businesses in the hospitality and food industry with more than one location could also
be eligible if their individual locations employ less than 500 workers.
◦ Businesses in certain industries may have more than 500 employees if they meet the SBA’s
size standards for those industries. Visit the site for more details.
Source: SBA Prepared By: Sylvie Luanghy

5. When Can I Apply to The Program?
The Paycheck Protection Program will be available starting April 3, 2020 through June 30, 2020
.
Starting Friday, April 3, 2020
Small businesses, Sole proprietorships
Starting Friday, April 10, 2020
Independent contractors, Self-employed individuals
Source: SBA Prepared By: Sylvie Luanghy

6. What Can I Use These Loans For &
How Much Can I Borrow?
◦ Payroll costs, plus benefits;
◦ Interest on mortgage payments that were incurred before February 15,2020.
◦ Rent, under lease agreements in force before February 15, 2020.
◦ Utilities, which service began before February 15, 2020.
◦ The maximum loan amount to borrow is the lesser of $10 million or an amount that you
will calculate using a payroll-based formula as instructed in the CARES Act.
◦ Loans can be for up to two months of average monthly payroll costs from the last year plus an
additional 25% of that amount. That amount is subject to a $10 million cap.
◦ Most applicants will use the average monthly payroll for 2019.
◦ For seasonal businesses, you may instead used average monthly payroll for the period between
February 15,2019 and June 30, 2019.
◦ For new businesses, average monthly payroll may be calculate using the time period from January
1, 2020 to February 29, 2020.
Source: SBA Prepared By: Sylvie Luanghy

7. What Counts As Payroll Costs?
Per The Department of Treasury, “Payroll costs include:
◦ Salary, Wages, commissions, or tips (must be capped at $100K on an annualized basis for
each employee).
◦ Employee benefits including costs for vacation, parental, family, medical, or sick leave;
allowance for separation or dismissal; payments required for the provisions of group
health care benefits including insurance premiums; and payment of any retirement
benefit.
◦ State and local taxes assessed on compensation.
◦ For sole proprietor or independent contractor: wages, commissions, income, or net
earnings from self-employment, capped at a $100K on an annualized basis for each
employee.
Source: Treasury Department Prepared By: Sylvie Luanghy

8. How Do I Calculate the Max.
Amount That I Can Borrow?
Step1: Sum up all of your payroll costs (refer
to slide 7 for details) from the last 12
months for employees who reside in the
United States.
Step 2: Deduct any compensation paid to an
employee in excess of an annual salary of
$100K and/ or any amount paid to an
independent contractor or sole proprietor in
excess of $100K per year.
Step 3: Calculate average monthly payroll
costs (divide the amount from step 2 by 12).
Step 4. Multiply the average monthly payroll
costs from Step 3 by 2.5
Step 5: Add the outstanding amount of an
Economic Injury Disaster Loan (EIDL) made
between January 31, 2020 and April 3,
2020. (Step 5 will only apply if you have an
outstanding EIDL loan. If not you can stop at
step 4.)
Per SBA guidelines, they recommend the below methodology for determining how much you can borrow.
This will be the most useful method for many applicants
Source: SBA Prepared By: Sylvie Luanghy

9. Examples Below From SBA
(Page#9)
Example 1 – No employee make more than
$100,000
◦ Annual payroll: $120,000
◦ Average monthly payroll: $10,000 (120,000/12)
◦ Multiply by 2.5 = $25,000 (10,000 x 2.5)
◦ Your maximum loan amount is $25,000
Example 2 – Some employees make more than
$100,000
◦ Annual payroll: $1,500,000
◦ Deduct compensation amounts in excess of an annual
salary of $100,000: $1,200,000 (1,500,000-300,000)
◦ Average monthly qualifying payroll:$100,000
(1,200,000/12)
◦ Multiply by 2.5 = $250,000 (100,000*2.5)
◦ Your maximum loan amount is $250,000
Example 3 – No employees make more than $100K,
has an outstanding EIDL loan of $10,000
◦ Annual payroll: $120,000
◦ Average monthly payroll:$10,000 (120,000/12)
◦ Multiply by 2.5 = $25,000 ($10,000*2.5)
◦ Your maximum loan amount is $35,000 ($25,000+ $10,000 EIDL)
Example 4 – Some employees make more than
$100,000, has an outstanding EIDL loan of $10,000
◦ Annual payroll; $1,500,000
◦ Deduct compensation amounts in excess of an annual
salary of $100,000: $1,200,000 ($1,500,000-300,000)
◦ Your average monthly qualifying payroll is
$100,000 (1,200,000/12)
◦ Multiply by 2.5 =$250,000 (100,000*2.5)
◦ Add EIDL loan of $10,000 = $260,000 (250K+10K)
◦ Maximum loan amount is $260,000
Source: SBA Prepared By: Sylvie Luanghy

10. How Can My PPP Loan
Be Forgiven?
According to SBA, the loan will be fully forgiven if the funds are used for payroll costs,
interest on mortgages, rent, and utilities over the 8 weeks period after the loan is
made.
◦ 75% of the loan must be used on payroll costs in order to have your loan forgiven.
◦ 25% of the forgiven amount may be for non-payroll costs such as rent payments,
mortgage interest payments and utilities.
◦ In order to receive loan forgiveness, you will have to submit a request to the lender
that is servicing your loan along with all the necessary documents such as
verification of the number of full-time employees, pay rates, as well as payment on
eligible mortgage, lease, and utility payments
Note: Forgiveness is based on the employer maintaining or quickly rehiring employees and
maintaining salary levels.
Source: SBA Prepared By: Sylvie Luanghy

11. Reduction of Loan Forgiveness
Per the Department of Treasury guidelines, you will owe money if you do not maintain your
staff and payroll
◦ Number of Staff: If you decreased your full-time employee headcount.
◦ Level of Payroll: If you decreased salaries and wages by more than 25% for any employee
who made less than $100K annualized in 2019.
◦ Re-Hiring: Borrowers have until June 30,2020 to restore full-time employment and salary
levels for any changes made between February 15,2020 and April 26,2020.
Source: Treasury Department Prepared By: Sylvie Luanghy

12. How Do I Apply For the PPP?
Check with your local lender (banks, credit unions) to see if they are part of the program.
Apply through any existing SBA lender (a bank), insured credit union and Farm Credit
System institution that is participating in the program.
Click the link below to start the process
https://www.sba.gov/document/sba-form--paycheck-protection-program-borrower-
application-form
You can find eligible lenders by visiting the SBA site here
https://www.sba.gov/paycheckprotection/find?address=22204&pageNumber=2
To find out if your business is a small business, visit
https://www.sba.gov/size-standards/.
Source: SBA Prepared By: Sylvie Luanghy

13. Documentation to Provide to
Your Lender
◦ Payroll tax fillings, or Form 1099-MISC, or income and expenses from a sole proprietorship
◦ Documentation verifying the number of full-time employees on your payroll
◦ Certification that all employees live within the United States
◦ The dollar amounts of payroll costs, covered mortgage interest payments, covered rent
payments, and covered utilities for the eight-week period following this loan.
◦ Payroll expense verification documents IRS forms 940 and 941
◦ Payroll summary report with corresponding bank statements
◦ Breakdown of payroll benefits (vacation, parental, family, medical, or sick leave, allowance for
separation or dismissals, group healthcare coverage, including insurance premiums, and
retirement, payment of state and local taxes assessed on compensation of employees)
◦ By-laws or operating agreement
◦ Articles of incorporation
◦ A Copy of your W9
◦ Copies of each owner's driver's license
Source: SBA Prepared By: Sylvie Luanghy

14. Other Assistance
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15. Economic Injury Disaster Loan
Advance (EIDL)
◦ Economic Injury Disaster Loan advance of up to $10,000.
◦ This loan advance provides relief to businesses that are currently experiencing a temporary
loss of revenue.
◦ Funds are made available within three days after successfully completing the application.
◦ The advance does not need to be repaid.
◦ Funds may be used to keep employees on payroll
◦ Pay for sick leave
◦ Meet increase production costs due to supply chain disruptions
◦ Pay business obligations (such as debts, rents and mortgage payments)
Source: SBA Prepared By: Sylvie Luanghy

16. Who Is Eligible?
◦ Small business, Sole proprietorships, with or without employees
◦ Independent contractors, self-employed persons, Tribal small businesses, Non-profit
organizations
◦ 501(c)(19) veterans organizations affected by coronavirus/COVID-19.
◦ Businesses in certain industries may have more than 500 employees if they meet
the SBA’s size standards for those industries. https://www.sba.gov/document/support--
table-size-standards
Those with 500 or fewer employees:
To apply for the Economic Injury Disaster Loan click the link below
https://covid19relief.sba.gov/#/
Source: SBA Prepared By: Sylvie Luanghy

17. SBA Express Bridge Loans
Per SBA , this is for small businesses who currently have a business relationship with an
SBA Express Lender
◦ If your business has an immediate need for cash while waiting for a decision on an
Economic Injury Disaster Loan, you may qualify for an SBA Express Disaster Bridge Loan.
◦ These loans are to help you overcome the temporary loss of revenue you are currently
experiencing.
◦ These loans can be term loans or used to bridge the gap while you apply for a direct SBA
Economic Injury Disaster loan.
Terms
◦ You may receive up to $25,000
◦ Quick and fast turnaround
◦ Must be repaid in full or in part by proceeds from the EIDL loan
Source: SBA Prepared By: Sylvie Luanghy

18. Sources
For further information and to keep up to date on these programs, check the following links.
Coronavirus Relief Options
https://www.sba.gov/funding-programs/loans/coronavirus-relief-options
Visit the site below to apply for an economic injury disaster loan
https://www.sba.gov/funding-programs/disaster-assistance
Visit the site below for more information on SBA debt relief efforts and how to apply for it.
https://www.sba.gov/partners/lenders/7a-loan-program/types-7a-loans
If you don’t have a lender, click the find one near you
https://www.sba.gov/partners/lenders/microloan-program/list-lenders
U.S Department of The Treasury
https://home.treasury.gov/system/files/136/PPP--Fact-Sheet.pdf
Prepared By: Sylvie Luanghy