Enterprise (ACDBE) Resources Disadvantaged Business ...€¦ · Disaster Loan (EIDL), both administered by the Small Business Administration (SBA), as well as other programs that

Airport ConcessionsDisadvantaged BusinessEnterprise (ACDBE) ResourcesNAVIGATE AND RECOVER FROM THE COVID-19 CRISIS

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ACDBE COVID-19 ASSISTANCE PROGRAM

Prepared by DEN COMMERCE HUBJULY 8, 2020

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The Denver International Airport (DEN) Commerce Hub and the Airport MinorityAdvisory Council (AMAC) have partnered to provide resources and guidance to assistACDBEs impacted by the COVID-19 pandemic.  This guide is intended to help ACDBEsnavigate the CARES Act Paycheck Protection Program (PPP) and the Economic InjuryDisaster Loan (EIDL), both administered by the Small Business Administration (SBA),as well as other programs that may be helpful to our ACDBE community.

The Commerce Hub team is available to answer your questions. If you need assistance, weencourage you to contact our office at [email protected] to submit aquestion or schedule a call.

Helping ACDBEs navigate through the COVID-19 health crisis.

The DEN Commerce Hub prepared this resource guide for ACDBEs to provide general information on the financial relief programs made available through the CARES Actfor small businesses impacted by the COVID-19 health crisis. The information below summarizes publicly available information and in no way represents advice or anassertion of authority on these matters by DEN or the City and County of Denver. For complete up-to-date guidance and to access additional small business relief options,visit the Small Business Administration (SBA) website at www.sba.gov.

DEN Commerce HubEmpowering minority-owned, women-owned and small enterprises to grow their business atDEN by providing guidance and a supportive environment.

The Airport Minority Advisory Council (AMAC)The only national, non-profit trade association dedicated to advance the full participation ofminorities and women in employment and contracting opportunities throughout the aviationand aerospace industries.

Partner Objectives

PPP/EIDL Side-by-Side Overview  .......................................................................................................... Paycheck Protection Program ............................................................................................................... Economic Injury Disaster Relief Loan .................................................................................................Emergency Bridge Loan ..........................................................................................................................SBA Debt Relief ..............................................................................................................................................

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Up to 2.5 times the average monthly payrollcosts, not to exceed $10 million.

Maximum EIDL is $2 million,based on your actual economic injury asdetermined by the SBA.

LoanAmount

Loan issued by SBA eligible lenders.

Submit application and supporting payrolldocumentation to the lender as soon aspossible.

Borrowers are able to apply for the loanuntil August 8, 2020.

The SBA is currently accepting new EIDLand EIDL advance applications fromeligible businesses.EIDL applicants who have alreadysubmitted their applications willcontinue to be processed on a first-come, first-served basis

Apply online on the SBA website.

Application

Loans may be fully or partially forgiven ifthe money is used for payroll costs, rent,mortgage interest or utilities over the 24-week period following origination (unlessthe borrower elects to stay with 8 weeks).However, no more than 40% of the loanforgiveness amount may be for non-payrollcosts. The forgiveness amount may also bereduced under certain circumstances.Loan forgiveness is requested through thelender.

Eligible applicants for an EIDL can receivea loan advance, up to $10,000, within daysof submitting a successful applicationthrough December 31, 2020. There is noobligation to repay the advance. Forgiveness/

Advance

Small businesses with 500 or feweremployees; other small businesses thatmeet the SBA size standard; 501(c)3organizations; Tribal businesses; andVeteran organizations. Individuals whooperate under a sole proprietorship as anindependent contractor or eligible self-employed individuals.

Businesses or eligible individuals musthave been in operation on February 15,2020.

Entities that have fewer than 500employees; cooperatives; ESOPs; smallbusinesses with fewer than 500employees; sole proprietors; independentcontractors; most private non-profits; Tribal small businesses; and eligibleagricultural businesses with 500 or feweremployees

Must have been in operation on January31, 2020.

Eligibility

Provides small businesses with funds,in the form of a forgivable loan guaranteedby the SBA, to pay up to 8 weeks of payrollcosts. Up to 40% of the fundsmay also be used to pay interest onmortgages, rent and utilities.

EIDL program was created to assistbusinesses, renters, and homeownerslocated in regions affected by declareddisasters. The CARES Act expanded theprogram in response to the COVID-19emergency.

ProgramOverview

NAVIGATE AND RECOVER FROM THE COVID-19 CRISIS

Paycheck ProtectionProgram (PPP)

Economic InjuryDisaster Loans (EIDL)

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Program Comparisons

NAVIGATE AND RECOVER FROM THE COVID-19 CRISIS

Eligibility

Business with fewer than 500employees*Business that otherwisemeets the SBA Size Standard**501(c)(19) VeteranOrganization that meets theSBA size standardTribal business that meets theSBA size standardIndividual who operates as asole proprietor; independentcontractor; or who is selfemployed

In the hotel and food servicesindustries (NAICS code 72); or That are franchises in theSBA’s Franchise Directory; orThat receive financialassistance from smallbusiness investmentcompanies licensed by theSBA.

Businesses or eligible individualsmust have been in operation onFebruary 15, 2020.

You may apply if you are a

*Businesses in theaccommodation and foodservice industries can apply on aper location basis if they have500 employees or fewer perlocation.

**For this program, the SBA’saffiliation standards are waivedfor small businesses

1.

2.

3.

The funds are capped, so borrowers are encouraged toapply as soon as possible.Borrowers should check if their current bank is able toissue PPP loans as some banks are only offering loansto existing customers.Borrowers apply through any existing SBA 7(a) lender orthrough any federally insured depository institution,federally insured credit union, or Farm Credit Systeminstitution that is participating. Other regulated lenderswill be available to make these loans once they areapproved and enrolled in the program. Loan applications are currently being accepted byparticipating lenders, and borrowers are able to applyuntil August 8, 2020.Borrowers need to provide the lender with theapplication and payroll documentation such as payrollprocessor records, payroll tax filings or Form 1099- MISC,or income and expenses from a sole proprietorship.For borrowers that do not have above documentation,the borrower must provide other supportingdocumentation, such as bank records, sufficient todemonstrate the qualifying payroll amount.

Loan Application

Paycheck Protection Program

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If in business during 2019, the maximum loan amount is2.5 times the average monthly payroll costs incurredduring 2019 or one year prior to the loan date. Seasonalpayroll costs will be measured using an 8-week periodbeginning February 15, 2019, or March 1, 2019, whicheverthe seasonal employer chooses.If not in business in 2019, the maximum loan amount is 2.5times the average monthly payroll costs between

The guarantee percentage is 100 percent by the SBA.No collateral will be required.No personal guarantees will be required.The interest rate will be 100 basis points or one percent.All loans will be processed by all lenders under delegatedauthority and lenders will be permitted to rely oncertifications of the borrower in order to determineeligibility of the borrower and the use of loan proceeds.Maturity is five years for loans issued after June 5, 2020. Forloans made before June 5, 2020, the maturity is two years;however, borrowers and lenders may mutually agree toextend the maturity of such loans to five years.The SBA requirement that the borrower try to obtain someor all of the loan funds from other sources is waived (i.e.,the Credit Elsewhere requirement is waived). However,borrowers must still certify in good faith that their PPPloan request is necessary. The deferral period is 10 months after the end of the loanforgiveness period, however, interest will accrue duringthis time. If a loan forgiveness application is not submittedwithin the time period, the borrower must begin payingprincipal and interest after that period. If the applicationwas submitted within 10 months and the loan was onlypartially forgiven, the lender will notify the borrower of thedate the first payment is due. No eligible borrower may receive more than one PPPloan.

Loan Terms and Conditions

January 1, 2020 and February 29, 2020.

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Paycheck Protection Program

NAVIGATE AND RECOVER FROM THE COVID-19 CRISIS

Payroll CostsInclude

Compensation to employees(whose principal place ofresidence is the UnitedStates) in the form of salary,wages, commissions orsimilar compensation; cashtips or the equivalent(capped at $100,000 on anannualized basis for eachemployee).Employee benefits includingcosts for vacation, parental,family, medical, or sick leave;allowance for separation ordismissal; paymentsrequired for the provisions ofgroup health care benefitsincluding insurancepremiums; and payment ofany retirement benefit.State and local taxesassessed on compensation.For a sole proprietor orindependent contractor:wages, commissions,income, or net earnings fromself-employment, capped at$100,000 on an annualizedbasis for each employee.

Payroll CostsDo not Include

Federal employment taxesimposed or withheldbetween February 15, 2020and June 30, 2020.Qualified sick and familyleave wages for which acredit is allowed undersections 7001 and 7003 ofthe Families FirstCoronavirus Response Act.

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Payroll costs (see previous page).Costs related to the continuation of group health care benefits during periods of paid sick,medical, or family leave, and insurance premiums.Mortgage interest payments on mortgage obligations incurred before February 15, 2020 (butnot mortgage prepayments or principal payments).Rent payments on leases dated before February 15, 2020.Utility payments under service agreement dated before February 15, 2020.Interest payments on any other debt obligations that were incurred before February 15, 2020.Refinancing an SBA EIDL made between January 31, 2020 and April 3, 2020. If an SBA EIDL wasreceived from June 30, 2020 through April 3, 2020, the borrower can apply for a PPP loan. If theEIDL was not used for payroll costs, it does not affect eligibility for a PPP loan. If the EIDL wasused for payroll costs, the PPP loan must be used to refinance the EIDL. Proceeds from anyadvance up to $10,000 on the EIDL will be deducted from the loan forgiveness amount on thePPP loan.

Loan forgiveness will be reduced if the full-time employee headcount is decreased.Loan forgiveness will also be reduced if salaries and wages are decreased by more than 25% forany employee that made less than $100,000 annualized in 2019.Borrower has until December 30, 2020 to restore full-time employment and salary levels for anychanges made between February 15, 2020 and April 26, 2020.

The new safe harbor provides that if a borrower is unable to rehire previously employedindividuals or similarly qualified employees, the borrower will not have its loan forgivenessamount reduced based on the reduction in full-time equivalent employees.

Verification of the number of employees on payroll and pay rates, including IRS payroll taxfilings and state income, payroll and unemployment insurance filings. Verification of payments on covered mortgage obligations, lease obligations, and utilities. Certification from a representative of the business or organization that is authorized to certifythat the documentation provided is true and that the amount that is being forgiven was usedin accordance with the program’s guidelines for use.

Loans can be used for:

Loan ForgivenessThe loans may be fully or partially forgiven, including any accrued interest, if the money is used foreligible payroll costs, rent, mortgage interest or utilities over the 24-week period following loanorigination. No more than 40% of the loan forgiveness amount may be for non-payroll costs. TheSBA's Interim Final Rule regarding loan forgiveness may be viewed here. Check the SBA's websiteregularly as loan forgiveness requirements are continuously being updated.

To request loan forgiveness, the borrower must complete the PPP Loan ForgivenessApplication (application instructions) or the PPP EZ Loan Forgiveness Application, if certain criteriais met, and provide it to their lender. This application may be completed electronically through theborrower’s lender, and the lender may also require the following:

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Paycheck Protection Program

*SBA will be providing additional guidance on loan forgiveness

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Economic Injury Disaster Loan (EIDL)

Businesses with fewer than 500 employeesCooperatives, ESOPs, and Tribal small businessesSole proprietorsIndependent ContractorsMost private non-profitsEligible agricultural businesses with 500 or fewer employees

Apply online through the SBA.

The maximum EIDL is a $2 million working capital loan at a rate of 3.75% for businesses and2.75% for non-profits with up to a 30-year term.Payments on Coronavirus EIDL are deferred for one year.Up to $200,000 can be approved without a personal guarantee.Approval can be based on a credit score and no first-year tax returns are required.Borrowers do not have to prove they could not get credit elsewhere.No collateral is required for loans of $25,000 or less.For loans of more than $25,000, general security interest in business assets will be used forcollateral instead of real estate.The borrowers must allow the SBA to review its tax records.

Eligible applicants for an EIDL can receive a loan advance up to $10,000 within days of asuccessful application through December 31, 2020.There is no obligation to repay the loan advance.If an applicant is able to secure a PPP loan, the loan advance will be subtracted from theforgiveness amount.

EligibilityAll of the following entities that have suffered substantial economic injury caused by a disaster oremergency in existence on January 31, 2020.

Loan Application

Loan Terms and Conditions

Loan Advance 

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Additional Programs

Up to $25,000Fast turnaroundWill be repaid in full or in part by proceeds from the EIDL loan

Emergency Bridge Loan Express Bridge Loan Pilot Program allows small businesses who currently have a businessrelationship with an SBA Express Lender to access up to $25,000 quickly. These loans canprovide vital economic support to small businesses to help overcome the temporary loss ofrevenue they are experiencing and can be a term loans or used to bridge the gap whileapplying for a direct SBA Economic Injury Disaster loan. If a small business has an urgent needfor cash while waiting for decision and disbursement on an Economic Injury Disaster Loan, theymay qualify for an SBA Express Disaster Bridge Loan.

Terms

SBA Debt Relief As part of SBA's debt relief efforts, the SBA will automatically pay the principal, interest, andfees of current 7(a), 504, and microloans for a period of six months.

The SBA will also automatically pay the principal, interest, and fees of new 7(a), 504,and microloans issued prior to September 27, 2020.

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