CARES Act Update: The SBA will begin accepting loan applications from small businesses and sole proprietorships starting Friday, April 3rd. Independent contractors and self-employed individuals can apply starting April 10th. Union Bank & Trust is here to help.
Our team can help you submit your application and supporting documents. Look up your loan officer's information here. If you don't work with a loan officer, complete this form and someone will get back to you.
What do you need to submit?
- A completed application
- Documents that verify the number of full-time equivalent employees and pay rates, including payroll tax filings reported to the Internal Revenue Service
We will need to verify the dollar amount of average monthly payroll costs for the period of time used to calculate your loan amount. You can find additional information on the Department of The Treasury website.
Work directly with your loan officer to submit your application and supporting documents.
Here’s what we know about the new Paycheck Protection Program:
The legislation authorizes banks to make loans to small businesses through the SBA 7(a) loan program. Qualified businesses and nonprofit businesses with fewer than 500 employees can qualify for a 100% SBA guaranteed loan to be used for payroll (including salaries, paid sick or medical, insurance premiums), mortgage, rent, and utility payments covering an 8-week period of time. The max loan amount is $10 million, and SBA provides a formula by which the loan amount is tied to payroll costs incurred by the business to determine the size of the loan for the business applying. A large portion of this loan will be eventually forgiven by the SBA. Additional details regarding this program:
- There are no personal guarantees required
- There is no collateral required
- It eliminates the SBA credit available elsewhere and personal resource test
- The maximum interest rate is 1.00%, with a complete waiver of the SBA guaranty fee
- It allows for complete deferment of the monthly payment for at least six months
- Any loan amounts not forgiven by the SBA at the end of one year will be carried forward as an ongoing loan with terms of max of 2 years fixed at 1.00%
- SBA will disseminate guidance to lenders on this within 15 days
SBA loans are notoriously paper-heavy, complex, and require the completion of various SBA forms. It appears that this program will be streamlined. One important step will be verifying the average monthly payroll costs for the time period the loan is to be used. Applications will need to include documents that verify the number of full-time equivalent employees and pay rates, including payroll tax filings reported to the IRS.
Financial institutions will have to learn the ins and outs of this new program. At UBT, we’re working to ensure we’re ready so that you can be first in line!
AVAILABLE NOW: Disaster assistance from the U.S. Small Business Administration (SBA)
President Trump recently signed the Coronavirus Preparedness and Response Supplemental Appropriations Act, which authorizes the SBA to provide Economic injury Disaster Loan assistance available to qualifying small businesses and private nonprofit organizations (exclusions may apply) to help alleviate the economic impact of COVID-19. Additionally, Nebraska Governor Pete Ricketts has proactively applied for and been awarded the ability to allow any Nebraska-based business and private nonprofit organization to apply for SBA Economic Injury Disaster Loans.
Here’s the nitty-gritty on these special SBA federal disaster loans:
- SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
- These loans may be used to pay fixed debts, payroll, accounts payable, and other bills that can’t be paid because of the disaster’s impact.
- For applications that qualify, the interest rate is 3.75% for small businesses, and the interest rate for qualifying nonprofits is 2.75%. SBA offers loans with long-term repayments in order to keep payments affordable — up to a maximum of 30 years.
- Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
For additional information on these SBA loans, please contact the SBA disaster assistance customer service center by calling 800.659.2955, visiting SBA.gov/disaster, or filling out an application. (Please note: The SBA website is experiencing an exceptionally high level of traffic, so if the page doesn’t load right away, keep trying.)
More relief measures and programs are in the works at the local, state, and federal levels of government, and we will do our best to update you on those steps as we are able. In the meantime, feel free to reach out to us with any questions or concerns.
In the meantime: Be open and communicative
The best thing you can do during this time is keep the lines of communication open. Be open and honest with employees, vendors, landlords, banks, and even customers. This situation is fluid, and no one expects you to know answers to all questions, but communicating and being honest will make it easier to work faster and be more effective.
Be sure also to stay in touch with your business banker and provide up-to-date relevant financial information. Relationships are important when it comes to banking, and your banking partner may have excellent insights on how to effectively conduct business remotely, find alternate ways to generate revenue, and think through business recovery plans for the future.
Loan products subject to credit approval.
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