Support Otsego! Think Local First! Business Economic Impact Survey-Otsego County Chamber Member Weekly Update

Resource Update from SBDC University at Albany

We have recently received some clarification and program change information on the Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP). In an effort to make sure that you have the most current information available to you, the clarifications/program changes are listed below.

The information updates are as of April 6, 2020 as supplied by the SBA.

Economic Injury Disaster Loan Program (EIDL)

·    $10,000 Cash Advance

·    Cash advance will be based on the number of employees for businesses with fewer than 11 employees.

·    The cash advance calculation is $1,000 per employee with a maximum cash advance of $10,000.

·    If you applied as a sole proprietor, self-employed individual or an independent contractor and did not list any employees in you application, the portal will assume 1 employee for the business owner when calculating the advance eligibility.

·    The cash advance will be forgiven.

·    Disbursements will begin this week and are based on when the applications were received and processed.

·    The loan applications will be processed in the order in which they have been received. It will likely be several weeks before your application is assigned to a case manager. The program has received millions of applications in the last three weeks.

Paycheck Protection Program (PPP)

·    Interest Rate – 1%

·    Loan Term – 2 Years

·    Non-Profit Eligibility

·    501c3s

·    501c19s

·    Religious Organizations

·    Tribal Businesses

·    Veteran Organizations

·    Headcount determination

·    May be actual employees or full-time equivalents. Defer to your lenders for their preference.

·    Forgiveness may be prorated based on actual eligible payroll express during the performance period (8-weeks).

·    The performance period (8 weeks) begins immediately following the disbursement of the loan proceeds.

·    If you have laid off employees prior to receiving the PPP loan, you will have a short window to rehire them.

·    You may not defer the spending until you are re-opened.

·    If you are planning to utilize the funds when your business re-opens, you should delay your application until you are prepared to use the funds. Please keep in mind that these funds are first come, first serve and may not be able available when it is convenient to participate.

·    Seasonal business that had employees in 2019 but had not yet hired their 2020 staff may be eligible. Work with your lender to determine your eligibility and average monthly payroll calculations.

·    Expenses that CAN NOT be included in the average monthly payroll calculations for loan amount determination and/or forgiveness:

·    Employer contributions of social security and Medicare.

·    Worker's compensation, disability and/or unemployment insurance.

·    Payroll processing fees.

·    For sole proprietors, self-employed individuals, independent contractors and LLCs filing as sole proprietors/partnerships:

·    The lender will determine the mechanism for identifying the owner's average monthly payroll.

·    Each lender is likely to use a different approach to this determination and you will have to follow the guidance of your lender.

·    If you have multiple businesses, check with the lender as to how the multiple businesses should apply for the program.

·    The multiple businesses should be working with the same lender for the application processes.

·    The lender will need to verify that the total number of employees of the businesses qualify as a small business.

·    The lender may have the multiple businesses apply under 1 application or as separate applications.

·    The lender will have the final say on how to approve and process applications from owners with multiple businesses.

·    If you have received an EIDL cash advance prior to the disbursement of the PPP loan, the EIDL advance may be deducted from the total of the PPP loan approval.