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all right everyone it's the top of the hour we'll get started here my name is Eric rota I'm our business and political engagement manager here at people for bikes and thank you for joining us for our third koban 19 response webinar during this webinar will be giving some guidance with some help from the Small Business Administration on us on those loans that they are helping to administer we want to as always take a brief moment to thank our members for supporting our work in Washington DC and at the state and local level your support means more now than it ever has and we will continue to do this great work with your help from the industry I'm moving on here we'll run through this quick agenda we only have two main points on the agenda today so we can kind of dive into the weeds on on what's happening with these different loans and the Paycheck protection program with our two specialists from the SBA and I also have our federal affairs manager Noah Bannion joining us this morning so with that I will throw things over to burl Kelton and Steve white from the Small Business Administration burl is a public affairs specialist at the US Small Business Administration and is based in Sacramento California handling issues in the West all to the west of the Mississippi and Steve white is based here in Colorado here with us and in Denver and he will explain a little bit more about the paycheck protection program and with that I will hand things over to Burrell all right good morning everyone thank you for the opportunity for us to be able to share information about the currently moving target really that is this disaster recovery program a disaster recovery program for from SBA has been around for over 50 years we've been dealing with disasters ever since and in this particular case kovat kind of makes a special case because we are seeing disaster by state and in the West it's already 23 states and three territories which are our service areas the SBA disaster assistance program is separate from the regular SBA program because all of our loans are direct loans from the US Treasury so we underwrite sir fund and service loans that are made completely within the agency this is not a joint bank SBA program but it's completely with agency and all of the funds come from and through directly through the agency to the borrower there are two different disaster programs in this particular event and they are separate from the paycheck paycheck protection program the first one is the emergency advance economic injury loan which can be converted to a grant and that is based on the number of employees in a business and limited in in the amount and scope maximum amount is $10,000 depending on an employee's and that can be applied to or for I guess you should say at the same portal as the long-term idle loan program which is a second part of our response and that long-term program is a two million dollar maximum program depending on actual economic injury and for operating expenses only so we're not dealing with profit or or distribution stop distributions or anything like that but it's strictly payroll and operating expenses related to ongoing operation the interest rate is 3.75 percent simple annual for business 2.75 for nonprofit private nonprofit organizations which within hours almost now includes local religious church organizations as well as their secular operations independent contractors and and of course regular small business out there so those can be included as part of that long term Direct Loan for economic injury dealing with operating expenses one of the benefits of the long term Idol program is that we service the loans from beginning to end so we will take opportunity to adjust the terms and amounts of the loan for the business owner if their situation changes right now we're looking at expenses out about six months or five hundred thousand max however we just kept out that the current max for initial disbursement is fifteen thousand dollars or two months worth of operating expense and the reason for that is that we're trying to touch as many businesses as possible with the current funding situation from from covers as that progresses of course we were looking to Congress to see what to go from there but it does not limit the amount of the eventual loan and the amount that a business should apply for so just to just to let you know that that initial disbursement does have a limit and not to be not to be shy about the other the full two million dollar max remains in place thirty-year payment term interest and and all that remains in place we're continuing to get guidance based on what Congress does with the law and all those changes to come we're still going to be working on those as we have the last 50 years making opportunities for businesses to recover one thing just briefly then I'll give you the website to go to to make application if you haven't already I've done that but the the PPP program the emergency advanced idle program and the long-term idle program can all be applied to at the same time so we can be working together in tandem with regular SBA and your business you know as we go forward the money that's received from the advance or the PPP or the idle cannot be duplicated so if you if you have money that's received in advance that you use for personnel expenses and you also apply for the PPP that includes personnel expenses and we wouldn't see the money duplicated from both would be one or the other that a business owner needs to consider what best suits their business operation to decide how they want to approach that and then money received from the PPP and the idle advance cannot be duplicated in the long term idle for the same expense so there may be personnel costs expense from one or the other of the advanced or the PPP but when we go to calculate the loan for the event or the long term idle if we're not going to include what you've already received it's pretty simple taxpayers you don't like to see us giving duplicates of funding where the the need is the same so we work one-on-one case-by-case with businesses that apply for the long-term idle program and I said be as I said before we service from beginning to end so if you're going up for 30 years or want you to be continuing to work with you as your need changes or if terms need to be adjusted and we will work with you on that the application website you want to take note of that is ghovat 19 the number covin 19 relief and that's one word dot SP a dot v /s mark clash so ghovat 19 relief SP a dot govt forward slash - mark /u apply there for both the emergency advance and a long term idle and they'll respond to you from there turnaround time and don't know exactly it depends a lot on the complexity of the business that's applying we have already seen term funds just burst and I'm sure Steve will talk more about how that PPP is working so I think that for now pretty well wraps up a net nutshell of what the idle disaster side is and again the disaster site is completely separate from the regular SP a sign and will work in tandem or we are separate so there are different kinds of details in terms of the way that the program works and it would be glad to work with you if you have specific questions I can take questions from an email or telephone if that's something if you'd rather not discuss that publicly and we work with folks all the time so I'll turn it over to Steve right it just and we'll see if we can help you in the future thanks too much Burrell I think there's one for the opportunity to address a couple of topics with you today I'm going to talk about the Paycheck protection program and I also want to talk just briefly here real quick upfront about the small business debt relief program so the small business debt relief program is for anyone who is a current SBA loan holder if you have an SBA 7a loan and SBA community evangeline an SBA microloan or an SBA 504 loan what SBA has done is it has suspended your payment requirements for the next six months and on your behalf SBA is actually going to make that payment this program is retroactive to March 27 of 2020 so if you made your end of month march payment and you have an SBA loan your lender will be reaching out to you and providing you the option of either returning that loan payment back to you or adding that loan payment through the amount or tacking it own to the end you'll have the option to distribute that at your your choice in your selection is your current SBA learning program holder the SBA is going to be making six months worth of payments on your we have questions about that please board those directly to me easy email Stephen dot white at sba.gov Steven with a V white color Steven dot white at sba.gov now we're moving to the Paycheck protection program or that the Triple P program on March 30th the SBA and US Treasury jointly announced the establishment of a new program authorized under that cares Act called their paycheck protection program the CPP is an SBA guaranteed loan 100% guaranteed in fact it's designed to provide direct the Center for small businesses to keep them always on the payroll so that is it at its essence this is an employee retention program this program is intended for small businesses less than 500 employees and includes sole proprietorships LLC's s course fully Bourne corporations structure doesn't matter it also applies for privates 501 C 3 non-profit organizations again private 501 C 3 nonprofits also applies the 501 C 19 veterans and to certain tribal organizations as well otherwise businesses just have to meet the typical or a small size standard for SBA in order to apply now part of this federal paycheck protection program will be forgiven if all the employees are kept on the payroll for the eight week period following loan origination so if you're able to keep your employees on payroll for the eight weeks after I'm sorry for a week after the loan origination then the SBA is going to seek to forgive that amount the payroll amount got to be used on say 5% of that amount for directly for payroll 25% will be allowed for usage for commercial lease rent mortgage interest or utilities but basically SBA is trying to help small businesses keep their employees on the payroll now if you're able to successfully apply for this paycheck reduction program loan payments will be deferred for six months no collateral of personal guarantees are required there will be no fees charged for this program so you're not out anything except for a small amount of time and effort if you apply in you're not successful there will be no application fees no service fees no fees outside the actual application for the borrower interest rate on this is 1% and the maturity will be for two years now how do you go about applying for the Paycheck protection program go to your local lender local lenders who are federally regulated regulated by FDIC regulated by the National or NCUA if you're a credit union borrower Farm Credit System institutions can also make these so basically every form or source of federally regulated lenders will be available to make these paycheck protection program amounts now having said that the amount we're looking to cover our bottom line payroll cost so you're looking at wages compensation salaries insurance cost cost of employee vacation or / benefits programs HR regulation requirement cost basically anything associated with maintaining your payroll is going to be covered in this couple different ways to look at calculating that borrowers can use either the twelve months preceding the origination or they can look at the fiscal year 2019 and use that and they can realize that by month or they can use an eight week period prior to the loan origination we would encourage you to use the amount that is favorable to your application because we get it really realized small businesses are designed differently many of you have a combination of full time employees with part-timers that rotate in and out yes seasonal ups and downs and your payroll amounts and so now as you have 1099 the filter in there and out as well I'm 1099 house will not be allowed anyone who's operating on a 1099 needs to file for their own triple P program and they are free to do stir this so they're basically in a nutshell that's the way that program works it's going to max out at ten million what we're seeing so far is that most people are far below that amount but I would encourage you to apply for it calculate that the average that you can to maintain your payroll and again the idea behind this program is to keep your employees or to retain them there is a covered 19 situation great thank you very much Steven for that information and thank you Burrell for covering those emergency disaster loans with that we will move over to a small announcement from our federal affairs manager Noah Heil and thanks for joining us today thanks to Stephen Burrell I just wanted to take two quick seconds before we move it over to questions which I know there are already a bunch coming through so just ahead that will be sending around a document you sort of see the header here from our our partners in federal advocacy and consultant signal signal group and they produced a really comprehensive a really fantastic resource here and that I will share with you all soon just to sort of how does how do these loan programs exist in the political space what are we looking at in the future and how does this affect you and because ultimately that's what matters what matters most right now um speaking of looking ahead I just wanted to say a little bit about what we anticipate out of Congress they're certainly not done when it comes to drafting and passing stimulus packages and legislation to support small businesses to continue to provide emergency resources for the healthcare industry and looking ahead and even starting to attack infrastructure as we start to rebuild um what we're hearing and then what it seems like there seems to be bipartisan agreement in the Senate and in potentially a vote as soon as this week by the end of this week for added relief adding maybe a quarter of a trillion dollars in new stimulus to go towards the paycheck protection program because of how popular it has been I know a lot of your questions are about that specific program again nothing that I just said is it's official and nothing's happened yet this is just what we're we're hearing and seeing and anticipating in DC is that because there has been such a strong response to this specific program we weep there there may in fact be another influx of funding towards it with that I want to start going through some of the questions and we've gotten a lot of questions before this webinar even started so I am just gonna start with one to kick off the bat and for Stephen Burrell and so this is a basically a question we've gotten from folks sending to us over and over the past week we know a lot of you are hearing from your banks a lot of different reasons why you might not immediately have been able to apply and whether that is a load cap on applications some technical issues with the bank the bank's maybe weren't set up in time for the influx of applications so I mean we hear you and we know that there have been some issues I don't want to present that I know this is not news to Berlin Steve either but for for business owners who are hearing things like that from your bank what is your best advice and what what should they what's what's the next step yes so the reality is this is a huge program three hundred forty nine billion dollars we're still within the first ten under a week of rolling it out it's brand-new now when I say that it's brand-new to Congress it's brand-new to your local leaders it's brand-new to us it's brand-new to the speed of light is brand-new to lenders so we're all sort of learning this program as we go along so when you look at a program that size rolled out in the first week there are definitely going to be some minor technical glitches along the way so having said that I wanted to really stress I really appreciate everyone's patience and persistence as we literally break new historical ground together and just as you said you can't play that very well the issues have b
en wide ranging from lenders getting set up in the system making sure they were eligible making sure they had accurate had access to we call eat ran east ran is simply the electronic platform that SBA uses to submit its 7a and 504 community advantage loan programs and that is the same system that lenders are using two-semester Triple P programs as well in the past lenders did this at a much slower and spread out rate but as you can imagine lenders have dedicated a large portion of their staffs to taking these applications and inputting them so we've had to bring more people on board to have to train their process and we are still doing that literally as we speak me and my team we worked night and day last week through this weekend and looks like just gonna be another long night to bring in lenders on board to do that so having said that with the high traffic volume that's come across lenders desk many lenders have conducted a sort of application triage if you will so they started with their existing customers first and once they wade through that then they're going to get into the ability to take non-customers and it's nothing more than just their ability to sort of manage the application process because of the high number amount so those of you have reached out to your lenders and they weren't able to take you yet I would encourage you to reach out to them again again have patience and be persistent with your request as they're able to move through the process and as its able to be more streamlined most lenders and borrowers become more familiar with it like anything it's new Samir ization is going to breathe the efficiency and speed and we'll be able to get caught up so right now everybody calls the board is dealing with some backlog issues but it's just nothing more than a matter of bringing on a brand new system that everyone's gonna learn together so definitely what you said is true we are working through it we've got processes in place and as I speak we're bringing more lenders on board and they're getting increased access transfer miliaria familiarity so please feel free to reach out to your local lender the depository institution where you keep your business accounts any federally regulated under and just let them know hey you'd like to apply for this program thank you for that comprehensive response Steve we really appreciate the time going into this we've gotten a few questions for both the idol in the PPP on time line so I know you just went into a little bit about the timeline of talking to your lender and what that might look like but if you're able if you've already gotten an application in so again for idle and PPP we've got one person saying they applied for the idol 9 days ago and haven't heard anything and so if it's you I know we've talked a little bit about the timeline before if you don't mind touching on that again burrell and then maybe again for the TPP I think folks would appreciate it for the disaster idol particularly for the advanced emergency advanced 9 days ago not having heard I would recommend that they go back take a look at that site and if they have not reapplied through that site previously that they go through the application process and and complete one of the reasons is that there has been some changes in the requirements in the processing time frame that go along with the new site that may they may be able to be an advantage to go that way and if we contact them in the meantime and you know we can deal with that but at least you have your your application again at the most current level and the most current processing and and I would just recommend that there is a an email that seraphic address that people can use for status but we're seeing people being responded and funded even before they every responses from the email so probably I would say the best would be just go ahead and I'd be applied if you haven't applied through that streamline Center that's the Cova banking relief yes that I gave earlier thanks pearl and for folks listening in we will definitely be including those links and resources and our follow up email from this webinar so you know we have a lot of questions about repeating URL addresses just know we will send all of that to you I'm in a comprehensive list um another question we have here specific I guess to Wells Fargo and so we've got someone who's reached out to Wells Fargo their main bank for the PPP application but heard they reached their maximum limit and won't be accepting additional applications do you know if the ceiling will be raised and our banks considering applications from outsiders people who don't have been existing making relationship with them so a great question as the process moves through you're gonna find some some fluxes and start it just historically all lenders are federally regulated are required to maintain what's called a lost ler I learn loss reserve fund basically for every dollar lent depending upon the bank size and liquidity nature of those loans there's a dollar amount that the bank is required to maintain many of you historically I'm sure your memory classes the Great Depression and the crash of 29 and so forth and so on the fix for that was to make sure that banks they're longer lent out all their capitals that they were able to make good on a certain amount of a percentage of outstanding balances so they would no longer be a clinic or run on the bank and that sort of thing that legislation has changed over time and taking on many different forms and as funds are made available through each program each particular program was federally guaranteed like yesterday's or not but all those programs have their requirements for maintaining a little lost reserve funds so I'm Wells Fargo due to the nature of its size and its ability to take on the applications bit of course reach their liquidity limit pretty quickly that's going to change as time goes on and we move into the forgiveness amount an SBA forgives certain portions of the Triple P learns those things that are up against the hard stop so their liquidity limits are going to be freed from that and didn't be able to get back in the game and that sort of thing and I'm certain that the lenders at the national level have already contacted their loan authority regulators and let them know where they're at as far as the inability to continue lending faster liquidity ceilings so that's some of that is just a matter of everyone's taking a breath and realizing that there's a certain limit that banks are going to be held to we're going to keep that standard on to maintain a strong economy even through the situation and so if lenders not able to take your specific application not a worry it's just a matter of finding another lender who can and so that's one when I ask everyone again for patience and persistence patience to to recognize the process is not going to be fast immediate especially at first and to know that throughout this process there's going to be some starts and some stops and yet that's gonna be with every lender not just with Wells Fargo thanks Steve and I want to be sensitive to both Steve and burles time here and we're just over the 30 minute mark I'm gonna throw in one last question that I hope is a quick answer and for everyone else whose questions we weren't able to address and we'll make sure that we can work with Steve and Beryl and their colleagues and and get you some answers as soon as possible so the last question we'll do today is are we eligible if we're partially owned by a holding company based outside the US I imagine that this question is addressing both loan programs is that good okay sorry for the disaster side I would say make application and discuss with your loan officer when that time comes that's the best way to do it because there's so many components to that question in terms of what we're looking at it really needs to be a direct conversation between the owner and the loan officer on the side on the triple psi affiliation is a concern but it's not a chief concern so I would echo Burrell is venomous exactly so they go ahead and apply let the system tell you that you're ineligible and adult self let really okay thank you all for joining us today and a special special thanks to Burrell and Steven for your tireless work during this very tumultuous time we at people four bytes are extremely grateful and know that the bike industry is also extremely grateful for your work we will be in touch with these resources soon this afternoon if not earlier so please be on the lookout for those and we will talk to you all again soon thanks everyone
