Paycheck Protection Program

As highlighted in the special edition of FNGLA’s Bullets, there is a new innovative small business loan program was enacted last Friday. It’s intended to provide eligible small businesses with eight weeks of cash-flow assistance through a 100 percent federally guaranteed loan from the U.S. Small Business Administration (SBA).
 
This Paycheck Protection Program loan is designed to encourage employers to retain their workers and encourage employers to rehire. 
 
This loan may also be entirely forgivable!  To apply for forgiveness, small businesses must submit documentation regarding the eligible uses of loan funds (payroll costs, mortgage interest, utilities, etc.), a certification that such documents are true and correct, as well the amount to be forgiven, and any other documentation deemed necessary by the U.S. Small Business Administration. The amount any small business is eligible to borrow and be forgiven is 250 percent of their average monthly payroll expenses, up to a total of $10 million.
 
FNGLA has learned the application period for this small business Paycheck Protection Program opens Friday, April 3!  Even though $349 billion is available, the number of Paycheck Protection Programapplications from across the nation is expected to be enormous. So, if you decide to apply, FNGLA urges you to do so very quickly!
 
If your business has fewer than 500 employees, then it’s eligible to apply.  The Paycheck Protection Program is open to landscape firms, retail garden centers, horticultural suppliers and, yes, even production nursery and greenhouse operations!  SBA’s often exclusion of agricultural producers does not apply to the Paycheck Protection Program! 
 
Highlights of the new Paycheck Protection Program Loan Guarantee and Forgiveness:

• The maximum loan amount of this brand new Paycheck Protection Program is doubled to $10 million for 2020. Proceeds may be applied to employee salaries, paid medical or sick leave, insurance premiums, mortgage payments and other business debt obligations.
• In assessing the risk of a bank’s portfolio, CARES Act loans are given zero risk weight.
• For this CARES Act loan program, the definition of “small business” means businesses with fewer than 500 employees, including those with multiple locations.
• Eligibility requirements are based on targeted COVID-19 relief targeted goals including salaries and payroll taxes paid – not the typical “repayment ability.”
• Collateral & personal guarantee requirements are waived unlike other SBA 7(a) loans.
• Federal government guarantee is 100% through 2020. Next year, it reverts back to 75% for loans above $150,000, and 85% for $150,000 loans or below.
• Paycheck Protection Program provides for forgiveness of the loan in an amount equal to the cost of continued payroll costs retroactive to February 15 through June 30. “Payroll Costs” are defined broadly and include the cost of insurance and other benefits.
• If your business was in operation on February 15, then the presumption is it was affected by COVID-19 and application fees are waived. 
• Loan repayment is deferred at least 6 months and up to a year.  

To access the Paycheck Protection Program application form, go directly to: https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses