Industry sign banking arkansas document now
all right well looks like some additional folks will be joining us as well but let's go ahead and get started since it's 3 30 good afternoon everyone my name is james reddish executive vice president here at the little rock regional chamber and we are uh very happy to be joining you all today on friday afternoon to to hopefully share some information which we think will help your business um you know we're very pleased to be joined by our congressman uh congressman french hill from the second district of arkansas as well as edward paddock who is the district director here in arkansas for the small business administration for those who have been tracking along with us through this pandemic you've heard from these two gentlemen before um and you know i continue to say we've got the best district director in sba here in arkansas with us in edward and and we've been very well served by congressman hill who not only has has been representing us our district but has been leading our country on the oversight committee for the coronavirus as well as helping to craft a lot of this legislation so without further ado um congressman hill maybe i'll kick it off to you i know there's been some changes here to the ppp there's some time elements to it so why don't you take us through if you could some of those changes in how some of our small businesses can benefit from it you bet well i really really appreciate james the little rock chamber doing this i know edward does too and that's because trying to get the word out uh you you think as we go into a gear of the pandemic that we wouldn't have to keep communicating but edward and i have been locked at the hip with each other since last march in constantly talking to our business community our business owners our sole proprietors and our local community bankers all over the state to say look this is an unprecedented time in the sba our small business administration has some unprecedented never before utilized tools to help people cope through this terrible situation on top of the good things that the state of arkansas has done and that the private sector participants around the state have done in the way of helping landlords tenants borrowers commercial developers our small businesses so thanks for letting us do it we want to do two things today one edward and i are trying to get the word out on two different key points one is that the paycheck protection money which we reauthorized and refunded in december 27th still has a lot of money in it number one number two um if you got a paycheck protection loan last year used it whether it's been forgiven or not you're eligible to get a second paycheck protection loan i wanted edward to go through that uh and then the latest news this week and why we wanted to jump on the phone with everybody today is that the administration has been focused on trying to make sure that sole proprietors small businesses businesses with less than 20 employees uh have access and a little extra communication on getting connected with their community bank and participating in this program so i'm going to stop we're going to do q a too but i want edward to focus on if you if you didn't get one if you did not get one remind people the process if you've got one in 2020 talk a little bit about the new aspects of getting a second paycheck protection loan and then today what can we do to help our businesses at the little rock chamber that have 20 or fewer employees to help them take advantage of this so thanks for doing this james sure absolutely so let me do i'm going to queue up some slides just so we can have a a quick reference as well and make sure if we're able to walk walk everyone through where we're at so uh round one initial ppp for the state of arkansas uh 3.3 billion dollars in just over 40 000 loans arkansas our community banks our lenders across the state did a fantastic job really opening up the coffers making sure we have uh funding going out throughout the community what we're focused on now uh just like the the congressman said is really how do we get those less connected smaller businesses that may have not have had access or they need a little bit of extra information access to this program so that's what we're focused on since we've opened the ppp application process on january 11th we've already processed another two billion dollars in funding across the state of arkansas which puts us up at almost five thousand dollars or five billion dollars across the the state for our businesses and non-profits really focused on from february 24th to march 9th we have a two-week window that businesses only with 19 or fewer employees can apply for paycheck protection that's non-profits as well if you have 19 or fewer employees you've got a window over the next two weeks one thing i do want to make sure you're aware of is for counting employees we have regardless of full-time or part-time or seasonal they count as one individual member for that we're also going to look at those individuals who have not received a paycheck protection first draw loan we want to make sure they have the ability to access this program and i want to highlight a couple new eligible borrowers that can come to the table that's the 501c6s the chambers housing cooperatives news organizations television organizations are now all eligible for the program so we want to make sure we uh identify you all and get you up to the table so you can request that loan uh using your covered uh payroll cost your your average payroll cost for two and a half months uh of your total loan amount which will give you the proceeds for the ppp loan one of the great changes we had with the flexibility act and the economic aid act is now you have between 8 and 24 weeks in order to be able to use those loan proceeds as you see fit if you haven't had a first draw loan now is the time to get in and get your first draw alone those independent contractors those self-employed individual businesses um they are all eligible what we are waiting on now is again um according to those changes the biden administration has announced we will see a recalculation methodology for our independent contractors and sole proprietors that's going to hopefully help us increase the amount of loan funding going to these types of businesses um as most of you have known and as the program has rolled out we were using uh net profit as a calculation for average monthly payroll cost that's uh on the agenda to change and potentially change to a gross income calculation that would get our businesses a little bit more access to capital with that if you've already had your first draw alone and you've used it what we're looking for is if you're a business that has less than 300 employees now we've reduced the size from 500 to 300 and you've suffered at least a 25 percent reduction in gross receipts you're now eligible for the second draw loan application and that's going to be a cap of 2 million for your loan we're using the same multiplication factor for a two and a half times payroll um and for those accommodation and food service businesses we're going to give you a little extra cash there for a three and a half time multiplier so that's going to give our most hard hit businesses the smaller businesses with 300 or less employees greater access to funding and financing for their business to get them hopefully through the next couple weeks eight to 24 weeks is still their covered period additionally uh they've expanded some uh covered costs that can be associated with these so what i do want to do is get you directed to a resource partner or a lender closest to you so you can start working that application process you really do need to be in communication with your lender to get through this process since this is a loan product delivered through community banks through banks cdfis nonprofit intermediaries and micro lenders so i'll go ahead and pause there and and congressman is there anything else that i need to touch on right away well we did a restaurant call uh a few days ago if you'll recall and we talked about the quarterly period you know uh and i think you ought to give people a heads up about that because it might head off some questions basically uh instead of 90 day periods around which to calculate the 25 loss from your 2019 business the law really does say quarterly meaning the quarter ends and so to both edward and james as a result of that call and the advocacy of jim keate of little rock arkansas i have got an amendment i've proposed to the budget reconciliation bill to try to give that flexibility edward we have no idea if the opposition party will accept it or if accept it it'll pass and stay in the bill but we have really been taking jim's uh very good calculation and comments from our call that we had about three weeks ago and putting it to work up here to try to get that guidance and that change so again that was due to your help too edward on but take a minute though and explain that to people because it will help you and see it'll help them with their bank on application issues yeah absolutely so when we talk about a 25 reduction in gross receipts what the sva is really looking for is has this business suffered a loss a true revenue loss from you know it doesn't have as many custer customers as it did the year prior the 2019 to the 2020 comparison so sba is looking on a calendar basis we've got to go through the the standard four quarters as set by law in order to um assess a 25 reduction in a quarter and then we have an overall 25 annual reduction either one of those would put you in an eligible status for the second draw so the call that we had with the hospitality association and the restaurant industry was really focused on well you know it doesn't shake like that for us since we do pay periods on a different basis and our calendar quarters are on a different rolling basis they use a different calculation methodology for their quarterly assessments so we went back to sba and we try to find out what is the the methodology and the reason why this calculation is set and is it set at calendar only and yes for the ppp program it is written in law that that's set on a calendar basis only so we have to use the calendar calculation for the ppp program um what hopefully the congressman has put forward will give us a little bit more flexibility and i think that's the goal and intent of the legislation in the program is to get flexibility to really those businesses who truly need it so you know i'm supportive from my seat here and we're supportive to see if we can help those businesses get access and greater funding to to hopefully get to the end of the pandemic we put that money in their pocket and keep those businesses up and operating excellent well if you guys are ready i know there's a couple questions here that i'll just all sort of go through so uh just to kick us off edward will you be able to share that uh powerpoint document those slides um that we will send out to all the registrants of today's today's session we'll get those slides to everyone so tim asks if someone owns rental homes would they be eligible for the ppp loan to cover the house note that isn't being paid by the tenant due to job loss flash code that's going to be a no for paycheck protection i think the congressman has better understanding of some of the renter relief and that's coming out uh that that's really targeted at those landlords who who are challenged from their tenants unable to pay at this point yeah this was a change in the december 27th bill from all the karaxak work that we did um from march until december 2020 and there is rental relief now that's being distributed to the states arkansas is getting 200 million dollars particularly it's going to be distributed through the department of human services as i understand it and to the questioner's exact question it can be applied for by a landlord or by a tenant so someone who's really got a mom-and-pop series of rent houses this is a precise question and your tenant is a low-moderate income person who's been hurt by the pandemic is unemployed or near unemployment and particularly if they have rent in arrears this program will be helpful i think but ashley ashley guns in the room with me today ashley works with me on financial services issues we still have not seen to my knowledge the state of arkansas's mechanism for accessing that both edward and i want that and james this will be a very important thing for us to communicate out through the chamber when we get it so we're all waiting that money was distributed to the states by the end of january it's now the last week in february but it again is a new program and so i i assume we're you know anything more than that no i think he said that it's going to be through the department of human services so i'll also add a little to that i know we've experienced quite a bit of that if you do have tenants pulaski county housing authority or the local housing authority is sponsoring the uh emergency services grant for those who are um also facing evictions uh due to non-payment of rent or any any factor like that and and uh the cadc in your area is really the point of contact uh for you to begin those conversations with um now on the sba side um of course those landlords are eligible for the economic injury disaster loans that is the program that if if they're seeking any sba assistance because they've significantly lost revenue they can go and apply directly to the sba for the idle loan and that's the direct sba to uh to the business loan um but unfortunately ppp is not meant for that so edward you might take a take a second i mean i don't know our audience knowledge level but the congress also you know added significant funding to the emergency loan the idle loan e-i-d-l is the acronym you apply for that directly to the sba you might just give them the basic parameters on the advance of the maximum amount of money and now any guidance you have on the wait period kind of how the processing is going fantastic so this is uh the idle uh loan program is an sba direct to consumer loan this is where sba steps in in the event of a disaster and we do those direct loans um it is a low interest loan for for-profit companies is that 3.75 uh for those non-profits at 2.75 percent and this is 30-year money so ideally any loan you would be eligible for you have a 30 year repayment on this this cash so this is kind of ppp is a direct hit short term to take care of those immediate needs and the idle loan program is really targeted at the long-term reconstitution during covid again apply directly at sba.gov ppp you can find the idle loan program there this is going to extend you up to 150 000 is the idle loan limit uh still currently and it's based off of your working capital needs to extend you up to six months of working capital based on historical cash flow so they're going to request a copy your tax transcripts they're going to want to see and give some information of how much your overhead is on a monthly basis and hopefully extend you up to six months on that with that being said the idle loan process is still um a slower run process than ppp uh you can get your ppp number and funded usually within five days or so uh eidl has taken significantly longer and especially with those businesses who are asking for reconsiderations or increased loans amounts those are taking a little while i've seen um really at this point we're getting into more reconsideration status but the average applicant can expect anywhere from 90 to 120 days uh minimum kind of turn time for that um so with that there's another program that we rolled out in line with the idol and that was the idol advance it was the marketed as the ten thousand dollar sba grant um and it was a thousand dollars per employee for up to ten employees well with the the changes under the economic aid act they've revised that program and refunded it to be a targeted idle advance now and so what it does is it allows sba to go back to all those original idle borrowers send them an email asking them if they are qualified or if they would like to fill out an application to be qualified for the targeted idle advance the targeted idle advances intent is to make th
t business whole from the whatever they received on the idle advance to the full ten thousand dollar payment now it's no longer a ten thousand dollar advance for anyone that applies it has some specific criteria that you've got to meet first you have to be located in a low to moderate income area sba is recently put out on our website under the idle advanced targeted advanced area a mapping system where you can put in your address to find out if you're in an lmi area so you have to meet that qualification first if you do meet that qualification the second one is have you seen a revenue reduction of at least 30 percent or have a loss of receipts at least 30 or greater for your business if you meet that that is a second requirement that's on if you meet both of those criteria sba is then looking to fund those to make up of the shortfall whatever you received in the advance to wherever the full ten thousand dollars is so if you got three thousand dollar advance and you qualify now you can get the remaining seven thousand dollars as a grant to the business additionally the svog or the shuttered venue operator grant is is being worked now and that's for those entities that have uh really um uh gathering places zoos concert halls museums are eligible for those svog and you can go to sba.gov slash svog to find out more i feel like i'm a boatload of acronyms over here uh oh that's good it's good edward thank you so um so a couple of additional questions and i'll remind everyone watching just go ahead and put your uh questions in the q a section at the bottom so any progress on forgiveness for those companies that received ppp one loans in excess of 2 million yeah absolutely we are working that we've seen quite a few loans uh we're we're really doing well on loan forgiveness i think those are ticking in and i definitely want to make sure i hear any feedback from the congressman what he's heard from our lending partners but we've been ticking those through some of the larger ones are taking a little bit more time we have to understand where we're at in the macro sense though now whatever we had dedicated to forgiveness now that the faucets back on to get ppp that's where sva's focus is really at so some of those forgiveness reviews are slowing down so sba is focusing its manpower in order to get more of the funds authorized out the door we've not had uh new comments james and edward about forgiveness there were there's this issue of that if you if it's if you've applied for forgiveness and 90 days have gone by um edward and his sba team or you know there are places where it's bogged down where they've got questions about documentation but for the rank and file normal loan and i don't know of any i haven't had anyone tell me about that audit standard that secretary mnuchin put in place for 2 million and up being a problem have you edward because i think the question is really asking that question yeah yeah yeah so that i mean you still need to and the what's going to happen is the borrower uh necessity form is going to be required to be filled out and the lender will will be required will pretty much be tagged to go fill out that necessity form you know we haven't heard any pushback from from our lending audience or any borrowers that have gotten denied thus far so that's usually you know when our ears perk up is when we have an issue so that we're not hearing anything that's good really the challenge now is is getting new applicants through and and reconciling um if there's any uh known issues or new issues with identity and fraud verification checks that we're doing that is uh slowing down the approval process a little bit for our second draw applicants and of course um you know i think we collected about 15 um of those loans that were beyond the fifth uh beyond the 90-day mark but we've been seeing those go through uh fairly um straightforward as well so perfect okay so um another question here received an email during the first round of ppp after applying sharing that i didn't show need for ppp funds should i apply again my business was just starting in january 2020 so no revenue had been generated but money was being spent to begin the build-up of the business three employees as of today i'm still in the same place as last year james co could you uh copy and paste that one in the chat so i could read through that one that'd be easier yeah i've got one from gerald that came in if you've never applied for ppp believe you qualify uh what does approval look like what's the process and timeline for receiving funds so if you uh if you think you qualify you definitely need to reach out to your lending institution or your local sba resource partner you can go to sba.gov local assistance to find those what i would do is really have a communication with that lender who's going to help prepare your documentation tell you that you're going to need your 2019 tax filings or any other documentation that you would need you would need to fill out their application and really in this process we do have an application that sba created but those lenders may have taken that application and put it on an online form so you might not have to do a paper application that's why you want to check with your lender first to see how they're receiving and accepting applications you would go ahead and fill out that application with them as long as they review it and find it good they would then process that loan application we would do some compliance checks and identity verification checks now on that loan application when it comes to sba as long as those come back clear we'll authorize and send a loan authorization number within usually 48 hours and then it's up to the bank to disperse those funds within the 10-day window so pretty quick process pretty seamless to get them through if you're qualified and i would just add to our our listeners and the people who also will see this after you post it after the fact and have a chance this weekend to take a look if you uh did not apply in 2020 you have an audience now that really understands this process and can really be of help i mean our we had every one of our banks uh jumped on this and thousands of companies were helped in arkansas with over 3 billion last year so there's been there's a lot of expertise in our community banks now credit unions our cdfis they really understand this and they can guide you with that voice of experience and and so i would really reach out also i would say our local accounting firms our cpas the people who help you do tax preparation for your small business they too have been through the ringer on this so i really would encourage uh our viewers if you didn't do this in 2020 you've got people out here that can really help you get through this perfect edward did you get a chance to look at the other yeah i think uh in order to address that question uh if you received an email this sounds like it's actually from our office of disaster assistance team um and you know that uh they didn't show a need for funds that would have been more of an idle conversation and showing an economic loss to the business um and and so i would want to obviously i'll i'll leave my contact information if that borrower would contact us directly we can get the individualized guidance and assistance that borrower needs to make sure they have the most accurate information uh and address them one-on-one you know we find that a lot of times that will that's what we have to do is go off the webinar get one-on-one to get the most accurate facts um on in order to address the situation but we'd be happy to do that perfect um so we'll we're we're getting near the end of our time if anyone has any additional questions please go ahead and put them in i i do want to pose sort of one question um to both of you really so so i mean i part of what generated this was the the sort of recent change in the last uh couple days from the from the body administration so um just sort of underline here a little bit what what is what are the next i guess what is now 18 days um so so this is it's a special period of time so that the remaining dollars that have been allocated to this um can be accessed by small but give us a sense of sort of what what the urgency is if someone's sitting here thinking about it well i would start just that congress has been concerned from the very beginning and actually um i i'm encouraged that the biden administration did this i don't know that it was necessary per se because when you look at the average loan size and the average number of employees i think in edward's numbers he's done so far i think there are 1100 loans they've processed with 50 or fewer employees so i mean there are a lot of small businesses that are applying for the product but this is the administration saying hey sole proprietor hey gig worker hey self-employed barber who works and rents space from somebody else if you miss this opportunity we're just calling this attention out to you please reach out to your local bank i think and i've heard from banks all over arkansas like southern but also traditional banks where they've made ppp loans as small as under a thousand dollars so our our institutions are prepared to help perfect yeah i would also say you know one thing i do want to call attention to is um we do have this window and i i as helpful as you know anytime we can direct and really call attention to resources for businesses for for applicants i think that's great what we are waiting on now is some additional guidance in the new calculation methodology that the administration has proposed that is going to uh what that's going to do is it's going to help the lenders better process these loans using the proposed guidance that they send out on those fact sheets so once sba writes that guidance usually sba is notorious for publishing things that friday afternoon so i'm hoping it's today we are waiting on you know new guidance to find uh that loan calculation methodology that's going to go and impact these specific businesses especially the ones the congressman was talking about the gig workers the independent contractors so once we see that we'll see hopefully better calculation methodologies but across the state um initially when this rolled out we had a three two or three day window where only our cdfis or our cdis could process well i tell you we had some cdis that weren't prepared they weren't on the original boat so we've been working with them to process and we've got more cdfis and cdi's processing loans now than we have before so this is really a window that there's ample funding that if you had a question if you didn't think you qualified ask ask the professional ask a cpa ask sba ask somebody to go over and review uh your situation and let's see if we can get you qualified and get you into a lender in order to help make this work well as you both are well aware you know 85 percent of our membership is actually 20 or fewer employees so um so we know this is important and it's it's great to be able to highlight this opportunity for those small businesses so final thoughts congressman hill or edward as we wrap up here well edward and i are here to help and as i say our banks are prepared our credit unions prepared our cdfis are prepared for this conversation our small business center out at the university of arkansas little rock is prepared to help we really have a knowledgeable group of folks to help our smallest businesses get access to this program and then if you ever have any kind of application challenge or if you feel like it's stuck in limbo people can reach out at hill.house.gov but let me uh really thank edward and sba for their great contribution today absolutely i i appreciate it i think we've got a lot of work to do to notify folks i mean i've been on calls all day and uh um really want to get the word out we do have a great network and if you're not involved in the entrepreneurial ecosystem now is the time to jump in and make sure you've got the connections and get introduced to the folks around the table to help get your application through the process you can always reach out to me or my team i've put my contact information in the chat you can google sba arkansas and find our location down on riverfront please just make sure if you know somebody or uh that hasn't applied they own a business they they have eligibility let's have the discussion uh we'll be uh on for the rest of uh the next until march 31st pushing uh the ppp program as long as we have funding out and trying to educate borrowers that haven't had access to it so check out sba.gov updates for those upcoming webinars from our team on how to get information that you need perfect i mean congressman i want to sorry i want to thank you for your advocacy on on the hill and and uh really for the work that you've done structuring the program because it's uh the flexibility in the program that really helps and i know policy and implementation is only part of the job it takes us all working together to help thank you perfect well we will uh from the chamber standpoint we will put this recording on the chambers website as well as links to the appropriate information and of course we'll come back to you as as if there are other major changes that we know that our membership needs and and hope to be able to count on i know we can count on the two of you to jump back in as things change but again edward thank you so much and congressman hill thank you both for all of your work um support of our community support of our small businesses with that we'll adjourn for today and wish everyone a great weekend
