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New PPP Guidelines and Deadlines

The New Mexico Economic Development Department released this statement today concerning new guidelines and deadlines for Paycheck Protection Program loans:
Economic Development Cabinet Secretary Alicia J. Keyes announced that new forgiveness and flexibility rules for the federal government’s Paycheck Protection Program (PPP) will benefit more New Mexico businesses and she is urging those who have not yet applied to take another look at the program.
With the PPP deadline for loan funding on June 30, there are just a few days left for businesses still interested to receive funding from private lenders who are partnering with the U.S. Small Business Administration (SBA).
As of this week, there is $129 billion left for PPP lending. The new forgiveness guidelines were presented by SBA leaders in New Mexico as part of an EDD webinar on June 17.
With the new PPP Flexibility Act, signed into law by President Trump on June 5, many more businesses in New Mexico who apply for forgiveness should be able to receive it. That means more of the money going to New Mexico businesses will stay in the state and not have to be repaid.
“The new guidelines mean that New Mexico businesses can reopen at their own pace and work toward a safer, stronger recovery,” Cabinet Secretary Keyes said. “The businesses can take more time to prepare and have until the end of the year hire back employees. The changes are a good thing for many small businesses in the state that are still under some health restrictions. I urge businesses who have not yet applied for PPP to take another look at this program before it closes for good on June 30.”
The biggest change allows PPP loan recipients until Dec. 31, 2020 to restore the employee headcount to pre-pandemic levels. The provision does not require hiring back a specific worker, just reaching the same headcount pre-pandemic in order to qualify for some loan forgiveness.
The new rules also reduce the percentage of PPP dollars required to be spent on payroll — to 60 percent from 75 percent. That change is particularly beneficial to galleries and specialty retailers with few employees but higher overhead in other areas such as rent, utilities, and mortgage interest.
The term for new loans is also extended from two to five years for any repayment amounts that would be due back to the lender, and the time period to use PPP money has been extended from 8 to 24 weeks.
“Small businesses are breathing a sigh of relief that they now have more time to bring back employees,” John Garcia, New Mexico SBA District Director, said on the EDD webinar.
“The changes are really important for hospitality businesses, gyms, and restaurants — many of the businesses that are still under COVID-19 restrictions,” Russell Wyrick, Executive State Director of the Small Business Development Center (SBDC) Network, said.
The SBDC centers provide guidance and technical assistance for all SBA loan services and applications in New Mexico. For more information, go to nmsbdc.org.
The SBA also reopened its application portal for the Economic Injury Disaster Loan Program (EIDL), a low-interest loan up to $2 million with payback periods of 20 to 30 years.
Wyrick emphasized on the webinar there are several other SBA loan options that might work for specific circumstances and his experts are available to advise business owners and nonprofit managers at no charge.
“The new guidance for PPP loan forgiveness is a welcomed action by the SBA. Many borrowers and lenders in New Mexico have been seeking clarification and a simplified process for asking for the intended forgiveness,” Jerry C. Walker, President & CEO Independent Community Bankers Association of New Mexico, said. “This is a positive action which moves us in that direction. Taken together, these actions benefit New Mexico’s small businesses who have been recipients of PPP loans.”
Some 650 New Mexico banks, credit unions, and community lenders have been active in SBA lending over the past several months with $2.2 billion in PPP money going to 20,431 New Mexico businesses and non-profits. Nationwide, $511 billion has been distributed under PPP.
The June 30 deadline for the program is fast approaching. “People often like to wait until the last minute,” Wyrick said on the EDD webinar. “Well, this is the last minute.”
For information on PPP and all the SBA loan programs go to SBA.GOV
For information on the state assistance, including the COVID-19 Loan Guarantee Program and the No-interest LEDA loan program, go to the EDD website, GONM.BIZ
For technical help and advice on SBA programs and loan applications go to NMSBDC.org.
For a list of SBA lending partners go here.
For comprehensive information from the State of New Mexico on the COVID-19 health emergency, including data, testing, economic, and food assistance, go to NEWMEXICO.GOV.

Resource Roundup – PPP Loan Forgiveness Updates

The United States Chamber of Commerce has shared the following updates on PPP loan forgiveness amidst some confusion on the subject.

For employers whose employees have chosen not to return to work, the Treasury Department has clarified its position on loan forgiveness. Specifically, if you’re an employer and want to bring an employee back who had previously been laid off, you will not be penalized if the employee chooses not to return. If you issue a written invitation to invite the employee back to work and the employee declines your written offer, you will not be penalized in PPP loan forgiveness application.

There is still PPP loan money available and businesses should continue to apply.

It is not known yet whether the window for loan use and forgiveness will be expanded beyond June 30, 2020, or if terms will be extended to more non-payroll expenses. While some of these rules could change, businesses are advised to assume the current program guidelines will not change.

 

 

Note: This is a summary of aggregated information from other parties and does not express the direct advice of Sam Goldenberg & Associates.

Resource Roundup – NM Lenders Available for SBA Loan Applications

Lenders in New Mexico are still able to help businesses with loan applications for the U.S. Small Business Administration’s Paycheck Protection Program (PPP), Economic Development Department Cabinet Secretary Alicia J. Keyes said in a recent virtual roundtable discussion.

As reported, Congress appropriated another $310 billion for crisis relief funding last week. As part of that bill, about 20 percent of the money ($60 billion) was reserved for small banks and community lenders. Applications reopened on April 27.

During the roundtable last Friday afternoon with the EDD Cabinet Secretary Alicia J. Keyes, U.S. Rep. Ben Ray Lujan, D-New Mexico, said there was about $200 billion left for PPP loans, “but this will go quickly.”

Rep. Lujan added that nearly all the community banks and credit unions in New Mexico “have completely cleared their backlog, and most of the community lenders are soliciting new loan applications and taking on new customers.”

“There are still lenders in New Mexico that have lending capacity, especially among the community banks and federal credit unions,” said John Garcia, New Mexico District Director for the U.S. Small Business Administration.

“For New Mexico to have a full recovery we need businesses to be healthy,” Secretary Keyes said. “I would urge any businesses who have not yet applied for SBA assistance, to do so.”

As of April 29, the U.S. Small Business Administration (SBA) has approved over 960,000 loans in the second round of the PPP. The dollar value of those loans was $90 billion, with smaller banks accounting for 587,000 loans or 61 percent of the volume.

The average loan size for round 2 of the Paycheck Protection Program is $95,000 compared with $206,000 in the first round of the program, according to the SBA’s New Mexico Office.

For SBA program information go to SBA.GOV

For a list of qualified SBA lenders in the state go to the EDD COVID-19 Resources page or click here.

For information on all the state and federal emergency economic assistance, go to the EDD website, GoNM.biz

For comprehensive statewide information on the COVID-19 health emergency, visit NEWMEXICO.GOV.

 

 

 

Note: This is a summary of aggregated information from other parties and does not express the direct advice of Sam Goldenberg & Associates.

 

Resource Roundup – Paycheck Protection Program or Economic Injury Disaster Loans?

What are the relative merits of the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) options? This question comes up a lot lately amidst the whirlwind of new information about business relief programs.  The infographic below, by Live Oak Bank, provides a helpful and concise comparison.

Steve Mariani, President and Founder of Diamond Financial Services, shared some additional insights in a webinar hosted by the International Business Brokers Association. Key takeaways from Mariani’s talk include the following:

  • The EIDLs are available now if you need funds to keep your business afloat.
  • 75% of PPP funding must be used to cover payroll. Only 25% can be used for other expenses like rent, utilities, etc.
  • Be careful calculating payroll. If you ask your payroll company for a report, it might not include things like simple IRA employee expenses and health insurance reimbursements. Be thorough!
  • If you receive $10 thousand dollars or less from an EIDL, there is an option to roll that amount into a PPP loan.
  • If you plan to apply for PPP support, Mariani suggests you do so quickly and through a lender with whom you have a current relationship. He says lenders are prioritizing current clients.

Lenders are working to interpret and implement the approximately 1,000 pages of information released in the last week. Updates will become available soon as procedures are put in place to process applications. Stay tuned!

Note: This is a summary of aggregated information fro other parties and does not express the direct advice of Sam Goldenberg & Associates.