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in full zoom is presented to you by calvo enterprises inc off today everyone esther lacanto here with another edition of in full zoom and this week we're going to talk a little bit about the ppp that's the paycheck protection program that the federal government has extended for a second iteration and also the e-i-d-l which is the loan assistance and joining us for that conversation is the branch manager for the small business administration guam office and that's ken lujan and we've got a couple of bankers with us we've got ed until on the first hawaiian uh who is the current president of the guam banking association and of course uh phil flores who is the president and ceo of bank pacific welcome gentlemen thanks for joining us thank you thanks for having us good morning half a day all right off today and ken we're going to start with you because you're going to go through all 100 and plus pages of the guidance and tell us all about it i'll try my best to condense it down for you all right now actually my first question is tell us a little bit did uh give us a little bit about what the paycheck protection program is very briefly and um what are the new the highlights of the the new iteration that was just passed by the congress well last year sometime in april april 3rd i believe it was um as a result of the passage of the cares act that allowed the sba to provide financing to the lending institution uh what's most called the the pvp program the paycheck protection program uh and so that allowed uh many businesses here in guam to avail themselves of the opportunity to get financing through the program uh with the assistance our our local lenders karen guam that has since uh terminated or expired it expired in august 8th of uh of 2020 and as a result there were some monies that were left over on the carousel that was then reallocated uh as by virtue of this new law that was passed the december 27th uh called the economic uh relief act or economic aid act that now allowed the ppp to resurface for a second time and be available to the business community uh for any disaster because the epidemic still continued on and so that particular this particular program that's now in place which we call the second draw ppp uh will be expiring in march 31st of this year uh so there are there are still funds available for businesses who are still undergoing um disaster assistance and in addition to that they can now draw a second time whereas the first provisions on on the first ppp program only allow for one loan to be issued out per per decision entity uh this time around they can do they can do a second draw now okay are there any uh other changes to that other than allowing a second draw for those that are already in the program well there's been a lot of emphasis that has been given because of the fact that you have certain industries within the uh within the market that actually were affected the most such as the food industry the hotel industry bars and restaurants have been closed uh food truck services i mean they can now themselves the opportunity to to get more financing by a calculated formula that they use is 3.5 times the amount the amount of the monthly payroll whereas just the regular service industry can go for 2.2.5 times the the payroll amount in addition to that it also expands the expenditure costs that the businesses have been occurring the first round of ppp was limited to payroll cost utilities rent and it was kind of limited to that that nature but now they expanded it to operational costs employee expenditure costs such as uh insurance life insurance uh health insurance things of that nature um and so that that has made it available to the small business community uh in addition to that um companies such as yourself nestor the uh broadcasting companies which which are 501 c 6 regulated uh chambers of commerce say for instance uh they they can also be uh included into this whole formula and also draw down against the um against this program too so the eligibility factor has been expanded somewhat to allow more opportunities for more more operations out there uh so so that's a good sign for it and so it also gives them another generation of capital that the businesses need as a result of the second draw of this program in full zoom is presented to you by calvo enterprises inc gu self storage conveniently located near the harman mcdonald's we offer affordable rates online payments and auto bill pay for your convenience plus gate access daily from 6 am to 9 pm call us today at 648-7867 for more information in full zoom is presented to you by calvo enterprises inc thank you appreciate your passing on that it's making the media companies eligible and i think we've already passed that on to our ownership uh before we get into further before we get out to some further discussion i wanted to ask uh ed and phil uh just uh to comment on on the first iteration of the ppp then we'll get into the idl later but um what are um your experiences with uh your customers that applied for ppp through your banks and um um can give us some just anecdotal um insight into that and let me start with you ed um you know the banks wall during the first round started taking in paper applications and that they were over you know they were overwhelmed we were inundated with thousands of paper applications we quickly then started creating portals but to be able to design portals to specifically address a lot of the nuances that came out from dsb and you know this was a a product that was always was evolving so as things evolved as sba found out certain things that they needed to make changes we always had to uh improvise to be able to do that the the local banks here in guam and i think i'm including um uh based upon the sba reports you know we did i think guam and cmi we did over a thousand to almost 2 000 different loans um to support our small businesses the challenge that we had initially of course was everyone was you know the first round they ran out of money then they came out with the second uh funding and everyone was panicking because they were afraid they were not going to be able to make it and so the pressure on a lot of the banks you know getting calls from customers you know did you send it in did you just complete this to complete that and you know i wish it was easy where you could easily go in there and just answer yes no do this do that but it required bankers to be able to touch these applications to review the applications to ensure that they were complying or not complying or if there's any questions because once we shoot it up to the portal sba portal you know we that we want to have a high degree of probability that's going to get approved or rejected because of the failure of not including information so i'll be very frankly the um the first two rounds of of the ppp was very strenuous on a lot of the business banking community you know uh particularly trying to keep people patient trying to be able to uh keep them calm and that the monies are uh didn't run out ken noted that uh there was a you know i think about 135 billion dollars left if i recall can i just reading the reports from the the second funding source and i think it's because a lot of people can qualify and and so they just started pulling back so now with this third round of ppp that's where a nice big chunk of money is coming from and i think what uh you know all the other banks are doing right now are they're looking at their portals they're trying to make sure they got all the nuances that the sba is coming out with etc uh so you know we're all sitting back waiting and we're trying to push everything through the portals and and not inundate the bankers directly you know um and hopefully they'll be electronically uh done and very seamless if you may all right phil did you did bank pacific have a similar experience no we uh we are we were not it was not sba's fault they were just so overwhelmed with uh all the applications coming in the portal we were not able to enter the portal so we didn't participate in the ppp program and likewise won't be doing it this time either but i can talk to you as a borrower because we borrowed money and tomorrow companies borrow money from first wyatt and also from bank of guam and we knew they were swamped uh but they both of them did a good job less and now we're we've had one of the loans uh guam dry cleaners uh it's already been approved for being forgiven um we're waiting for the other uh other companies to get the same from their banks but we are we are going to probably for at least one or two of the companies participate in the draw the second draw we understand of course that those who did not receive the draw before they're they're you know the front of the line they're like the menu for the vaccination which i got but the uh and but i think this week ken would know better than i but both those applying for a first draw and a second draw are now able to uh will be able to apply this week and uh ed and i were in a chat this morning and kim cook said that uh they don't open 12 hours ago but already 50 million dollars has been committed throughout the state on this new program so it shouldn't help out and i'm glad you like in uh uh mentioned that the food service industry uh most industries you can only borrow two and a half months of payroll they can go out through that month to payroll because they are really seriously impacted by what's going on i think we can all see that right yeah you can um in in the news release that i read the sbi administrator jovita franz said that you've uh sba has changed uh some things up in response to um you know input from businesses can you elaborate on some of those uh changes in terms of the uh the way they they do business or yeah i think you mentioned um you said something about targeted relief and i think you touched on that um you wanted to sort of uh encourage those businesses particularly in the uh put in uh beverage and hotel and restaurant uh industries to avail of the uh the uh the system yeah uh one of the things that we want to encourage because again the the cries you know throughout the country throughout the nation has been that uh we couldn't avail ourselves the opportunity for this program because of the status that we're in and so realizing uh that we've also allowed churches and religious organizations to undergo uh the program in the past they were not eligible but the first round they were they became eligible so now these 501 c 3s the 501 c6s and so forth they now have become eloquent to a program so that allows them the opportunity to get the financing that they need now in addition to that one of the things that we didn't experience here at guam is the is the the cost that was associated with the riots that occurred back in states uh because these businesses were affected by the riots and people protesting with down down the streets and breaking breaking into their business operations those uh businesses that were affected by the rights were are also eligible to add those costs in for forgiveness as well uh knocking with me unfortunately we weren't we didn't have experience that here in guam but um the sba has allowed these expenses to be included and become eligible for for forgiveness opportunities so we'd like to encourage the business community to look at these uh new changes to the regulations the new changes to the program so that way they can they can include their expense uh expense costs uh that is that are eligible into the the loan amount that they they're going to be requesting on yeah can you talk a little bit now about the e-idl i understand that that's sort of been extended until the end of the year yes the eido which is the economic injury disaster loan program uh expired in december 31st 2020 again as a result of the enactment of the economic aid act that extended the life of the program to december 31st 2021 they also provided additional funding for the disaster eid along program to provide the aid that they needed to it in addition to that what sba has done and they did it last year and they're doing it again this year uh sba has deferred all principle and interest to towards the uh to march of this year so in other words there any disaster home or business loans that are existing out there in the community um they don't have to necessarily pay for the loan to march at this year so their next due date is going to be march up to 2021. the the one thing i i advise and kind of counsel and and want people to know businesses that do have the disaster loans or even individuals who have the disaster loans although we are deferring the amounts you know to a later date it just still continues to accrual so uh if you have the capability to make your payments i advise that you do so because what you want to do is you want to avoid a balloon payment towards the end of the maturity so i don't want you to get surprised and call me up you know 20 years down the road hopefully i'll still be with the sba about 20 years down the road and say how come i have a balloon payment now from the last payments now 2 000 compared to 200 dollars and so um that's one of the things another provision within the act that allowed a good thing for the eidl is that as part of the forgiveness process with the banking institutions sba required that whoever received an el eidl advance payment that was going to be uh taking off or subtracted from the total amount of the left that they borrowed with the lending institution that now has been reappealed repealed and now that now sp is going to reconcile uh the differences with the local lender who made the loan and that money that those monies will actually be given so uh that's an added plus now now we don't have to take into consideration that becomes a loan dollar amount so um that's added really to to the business community as well i'm happy to hear that we got the forgiveness of first hawaiian that eidl was not included so thank you very much again in full zoom is presented to you by calvo enterprises inc gu self storage conveniently located near the harmon mcdonald's we offer affordable rates online payments and auto bill pay for your convenience plus gate access daily from 6 am to 9 pm call us today at 648-7867 for more information in full zoom is presented to you by calvo enterprises inc and uh real quickly uh uh can just just some advice for um would be applicants um they need to get all their stuff uh their documents ready um ahead of time or um is that something you're encouraging them or the previous information that they had had submitted for those that that are going for a second draw no need to to well some of the some of the lending institutions are ready to take on applications some of them are not so um the advice i i get at least for this particular week is look and review the regulations that are online with the nsps website they're also online with the treasury department's website review the regulations uh download the necessary forms that are applicable to you if it's a second draw that you want to do look at those forms those forms are very specific as to what the requirements are um familiarize yourself with what the regulations call for what the forms ask for prepare the documents and then when you're ready for submission to the banks can go and do so but it'll be best that you prepare your documents and get it ready because typically what happened in the first round of funding uh a lot of the the businesses that applied for the loans with the institutions that felt provided sufficient information that was incomplete the banks held him back and said we're not processing it you may have been the first one online but you're going to be the number one 100th person now because 99 people before you had complete packages and years wasn't complete so again work work to the wiser get your ducks an odor dodge your eyes cross your t's yeah okay we've got about five or six minutes left and i wanted to pivot because we did have some breaking news this morning about um the pandemic unemployment assistance program which you're not part of though kid but since we've got a couple of angers here i wanted to ask them about um their thoughts on the fact t at thousands of applicants or beneficiaries of the kua uh will now be disqualified from the program and so the feedback we're getting already is a lot of people are frightened by the fact that uh these paychecks these checks will no longer be continued uh phil let me start with you what what what are your thoughts on that and uh can you just give us a broader thought on the economic recovery yeah it it surprised me when i heard that news and i haven't i've just heard a little bit about it i haven't really dived into it but yeah because if i'm working part-time uh i still have full-time obligations like my rent my utilities whatever the case may be so i'm wondering if some people are gonna say is it worth like is it worthwhile that i continue to work reduced hours or just go unemployed so they can get the checks uh but it's going to be hard on people and it surprised me when i heard that i don't know if the new administration will change any of that i don't know if the new administration will even affect the ppp or the eidl but the unfortunate unemployed but if i'm partially employed it's really bad news i'm sorry to hear it yeah ed you got any thoughts on that you know the the one thing that uh we were happy to see and i think this is from an overall banking perspective uh is that uh a lot of these people were unemployed were actually using their funds a little bit wisely rather than going out there and just you know buying luxury goods etc although we did see some spikes in certain areas um they're actually working towards managing their uh obligations etc you know if they if they are not able to continue on without receiving that assistance until the economy starts opening up and then you know we could see some hard harder times um but hey ernesto if i could i just made i want to make a few comments back on that real ppp real quick sure um you know what men what kenneth mentioned that um you know this round three there's there's going to be a first draw meaning people who didn't or business that didn't apply uh they're they're going to have that opportunity apply but the underwriting process it appears it's going to be similar to the way it was when we first started so you know like ken said he's encouraging them all to go into the sba website i believe a lot of the banks have links already to the portals they need to go in there and start looking at the documentation that they're going to be uh required to submit i also understand that i believe in kenya can confirm but there's a 10 million dollar cap on that first draw whereas the second draw the existing ppp clients they're gonna be there's a cap of two million dollars uh that they can possibly draw and you know there are some sort of requirements but um it's going to be for you know first draw new guys come in they're going to get that opportunity then the second draw the the one question that we're getting uh called up a lot about is the forgiveness of the first two draws or the first two issuances and um we've actually been holding back on trying to push a lot of customers with a hundred and fifty thousand and below because it went from 150 000 that was going to be like a simpler approval forgiveness process down to 50. now we believe it's about 150 and i think sva is going to release that form out on the 20th which will make it a lot easier for those who have existing ppps below 150 to apply for forgiveness so i just wanted to throw that in there good good points and ken we're going to wrap it up with you go ahead and comment on that yeah i was going to say that yes because the the forgiveness uh process has been somewhat slow because of the fact that they were waiting for sb's guidance in terms of changes on the on the requirements of under fifty thousand below um i'm glad to to report that asp has is we will be making those changes and so that way the flow of forgiveness uh process would be quicker and then to a point where we can we can closely uh uh close the documentation on that so um this is going to be an evolution that's going to be taking place in the next you know week or two uh constant changes so what we say today may change tomorrow uh so the best thing to do is continually check with your check with the websites check with the the sv website the treasury website update yourself with the updated information because at the same time too myself and the banking institutions are trying to interpret this as quickly as we can but i one last thing in parting i like to um to give big big kudos to the lending institutions here in guam who are participating and continue to participate with uh providing the disaster belief in providing the finances that we need for our community because without them you know the money is going to be flowing out there so thank you to the bankers who thank you for the banking uh clown pending association uh thank you for all your support what you do with our programs as well in full zoom is presented to you by calvo enterprises inc gu self storage conveniently located near the harmon mcdonald's we offer affordable rates online payments and auto bill pay for your convenience plus gate access daily from 6am to 9pm call us today at 648-7867 for more information in full zoom is presented to you by calvo enterprises inc just before we go can um just tell us uh your um thoughts on the first round and whether or not you think um more businesses should be able to avail of the the second well i i i think we we got a lot of businesses that were actually that actually apply for the loan and receive monies uh from sba uh there was a total of about uh when we closed the sb uh pp program on august 8 there was a total of 2 208 businesses that received money from the sba for a total of 192 192 million dollars that was actually approved on the community um i see that we're probably going to get a little bit portion that those numbers may not be as high as before because there's still some hesitation uh and and you know uh you know apprehension on the businesses side uh but at the same time too those who are familiarized with the program would then look at this and say i do need the funds coming up in uh round two so i'm gonna go for it too i know the process i know what needs to be done and every and the banks are making made a streamline as we made a streamline so now it's much easier for me to go in there knowing very well that i do still need the finances so um we we encourage the the bank or the business community to look at this opportunity and don't let it go by because again it ends on march 31st all right thank you very much appreciate it gentlemen ken lujan of the sba phil flores from bank pacific and ed angelon first hawaiian bank and the bond banking association thank you for joining us this weekend we'll see you again next week on in full zoom right there all right in full zoom is presented to you by calvo enterprises inc