SBA Paycheck Protection Program & Covid-19 Disaster Relief Loan | Host Financial

SBA Paycheck Protection Program & Covid-19 Disaster Relief Loan – Draft

SBA PAYCHECK PROTECTION PROGRAM (PPP)

Host Financial is committed to helping small businesses and real estate investors navigate the COVID-19 loan relief options. The Paycheck Protection Program, part of the new CARES stimulus package, is a federal loan program aimed at helping small businesses who have been severely impacted by Coronavirus. In addition to the Paycheck Protection Program, the U.S. Small Business Administration (SBA) is also offering an Economic Disaster Loan (EIDL) to small business owners. You can apply for this low-interest, federal disaster loan directly through the SBA. It is important to note the EIDL is not eligible for forgiveness whereas the PPP eligible for up to 100% forgiveness should you follow all the guidelines. 

Host Financial is here to help you navigate your options and submit your application with confidence. Host Financial and other 3rd party services are not the only way to apply for the loan as you can do so directly via the SBA website. However, Host Financial is offering this consulting and processing service free of charge to you. We are working directly with several SBA Approved local and regional lenders to provide the fastest timeline possible. Due to the volume of requests, at this time we are only able to assist businesses that have loan size request of $100k or more. 

How to Apply

Apply

Submit your information to the form below. We are able to process loan sizes $100k+ only at this time.

Connect

An email will be sent with the instructions on the documents to collect and how to calculate your payroll expenses and to schedule a call with us.

Upload

After you've collected the required checklist of documents, follow the given instructions to upload your files to your secured cloud folder.

WORK WITH HOST FINANCIAL AND LET’S GET IT DONE
FAST AND RIGHT THE FIRST TIME.

Note: This is a service just for the forgivable PPP loan and not the EIDL loan. To apply for the EIDL loan directly with the SBA go to their website here.

 

Frequently Asked Questions

The following are the aspects of the Paycheck Protection Plan as we have interpreted in the CARES Act. These are subject to change upon guidance from the SBA and the U.S. government.
  • Small businesses, 501(c)(3) nonprofit, a 501(c)(19) veteran’s organization, or Tribal business concern described in section 31(b)(2)(C) of the Small Business Act with not more than 500 employees, or the applicable size standard for the industry as provided by SBA, if higher.
  • Sole-proprietors, independent contractors, and other self-employed individuals as eligible for loans.
  • Businesses with more than one physical location qualify so long as total combined employees are below 500 employees (unless the businesses operated under NAICS code beginning with 72) or otherwise meet the SBA’s size standard based on NAICS code.
  • Waives affiliation rules for businesses in the hospitality and restaurant industries, franchises that are approved on the SBA’s Franchise Directory, and small businesses that receive financing through the Small Business Investment Company (SBIC) program.
  • Applies current SBA affiliation rules to eligible nonprofits.

Business must be operational as of February 15, 2020 and had employees for whom it paid salaries and payroll taxes.

Average eligible monthly payroll costs, excluding compensation above $100,000 in wages (based on prior 12 months) multiplied by 2.5 (represents months) – plus – the balance of any SBA Loan closed between 1/31/2020 and when this loan will be made, if applicable – OR – $10 million whichever is less.

Allowable uses of the loan include eligible payroll support (eligible employee salaries which excludes compensation above $100,000 in wages, paid sick or medical leave, insurance premiums), interest paid on a mortgage (excludes any prepayment of or payment of principal) or rent, and utility payments.

2-year full payout loan. There will be no prepayment penalty. Allows for complete deferment of SBA 7(a) Loan payments for at least six (6) months and not more than a year.

The loan will be unsecured. No collateral required.

  • Cannot apply for any other programs through the SBA for the same purpose.
  • If a borrower has an EIDL Loan unrelated to COVID-19, borrower is still eligible.
  • The emergency EIDL grant award of up to $10,000 would be subtracted from the amount forgiven under the Paycheck Protection Program.
  • Eligible borrowers will be required to make a good faith certification that the loan is necessary due to the uncertainty of current economic conditions caused by COVID-19; they will use the funds to retain workers and maintain payroll, lease, and utility payments; and are not receiving duplicative funds for the same uses from another SBA program.
  • The borrower is eligible for loan forgiveness equal to the amount spent by the borrower during an 8-week period after the origination date of the loan on eligible payroll costs, interest payments on any mortgage incurred prior to February 15, 2020 (excludes principal and prepayments), payment of rent on any lease in force prior to February 15, 2020, and payment on any utility for which service began before February 15, 2020. Amounts forgiven may not exceed the principal amount of the loan.
  • Forgiveness on a covered loan is equal to the sum of the following: eligible payroll costs (excludes compensation above $100,000 in wages) incurred during the covered 8 week period compared to the previous year or time period, proportionate to maintaining employees and wages: eligible payroll costs plus any payment of interest on any covered mortgage obligation (excludes any prepayment of or payment of principal on a covered mortgage obligation) plus any payment on any covered rent obligation + and any covered utility payment. Borrowers will verify these payments through documentation required by lenders, such as (but not limited to) IRS Payroll Expense Forms 940 and 941, mortgage statements, lease statements and utility statements.
  • The amount forgiven will be reduced proportionally by any reduction in employees retained compared to the prior year and reduced by the reduction in pay of any employee beyond 25 percent of their prior year compensation. To encourage employers to rehire any employees who have already been laid off due to the COVID-19 crisis, borrowers that re-hire workers previously laid off will not be penalized for having a reduced payroll at the beginning of the period.
  • Canceled indebtedness resulting from this section will not be included in the borrower’s taxable income.
  • Any loan amounts not forgiven at the end of one year are carried forward as an ongoing loan with terms of a max of 2 years at 1% interest. The 100% loan guarantee remains intact.
  • Completed Application 
  • Articles of Incorporation/Organization of each borrowing entity
  • By Laws/Operating Agreement of each borrowing entity
  • All owners Driver’s Licenses
  • Payroll Expense verification documents to include:
  • IRS Form 940 and 941
  • Payroll Summary Report with corresponding bank statement
  • If a Payroll Summary Report is not available, Employee Pay Stubs as of February 15, 2020 (or corresponding period) with corresponding bank statement, and,
  • Breakdown of payroll benefits (vacation, allowance for dismissal, group healthcare benefits, retirement benefits, etc.)
  • 1099s (if Independent Contractor)
  • Certification that all employees live within the United States. If any do not, provide a detailed list with corresponding salaries of all employees outside the United States
  • Trailing twelve-month profit and loss statement (as of the date of application) for all applicants
  • Most recent Mortgage Statement or Rent Statement (Lease)
  • Most recent Utility Bills (Electric, Gas, Telephone, Internet, Water)

Annual payroll: $120,000
Average monthly payroll: $10,000 Multiply by 2.5 = $25,000
Maximum loan amount is $25,000

Annual payroll: $1,500,000
Subtract compensation amounts in excess of an annual salary of $100,000: $1,200,000
Average monthly qualifying payroll: $100,000 Multiply by 2.5 = $250,000
Maximim loan amount is $250,000
Annual payroll: $120,000
Average monthly payroll: $10,000 Multiply by 2.5 = $25,000 Add EIDL loan of $10,000 = $35,000
Maximum loan amount is $35,000
Annual payroll: $1,500,000
Subtract compensation amounts in excess of an annual salary of $100,000: $1,200,000
Average monthly qualifying payroll: $100,000 Multiply by 2.5 = $250,000 Add EIDL loan of $10,000 = $260,000
Maximum loan amount is $260,000