COVID19

Financial & Business Assistance

ASSISTANCE/SMALL BUSINESS LOANS

Updated August 9, 2020

Paycheck Protection Program (PPP) Loans

PPP Questions: (Last updated 7/27/20)

Yes. An employer that applied for a PPP loan, received payment, and repays the loan by the safe harbor deadline (May 14, 2020) will be treated as though the employer had not received a covered loan under the PPP for purposes of the Employee Retention Credit. Therefore, the employer will be eligible for the credit if the employer is otherwise an eligible employer for purposes of the credit.
For purposes of loan eligibility, the CARES Act defines the term employee to include “individuals employed on a full-time, part-time, or other basis.” A borrower must therefore calculate the total number of employees, including part-time employees, when determining their employee headcount for purposes of the eligibility threshold. For example, if a borrower has 200 full-time employees and 50 part-time employees each working 10 hours per week, the borrower has a total of 250 employees. By contrast, for purposes of loan forgiveness, the CARES Act uses the standard of “full-time equivalent employees” to determine the extent to which the loan forgiveness amount will be reduced in the event of workforce reductions.
Yes but each must be used for different purposes. You must report any income from an SBA loan to the RI Dept. of Labor and Training if you are receiving unemployment benefits. View: PPP vs. EIDL
No. The lender must make a one-time, full disbursement of the PPP loan within ten calendar days of loan approval; for the purposes of this rule, a loan is considered approved when the loan is assigned a loan number by SBA. For loans that received an SBA loan number prior to the posting of this interim final rule but have not yet been fully disbursed, the following transition rules apply:
  • If the tenth calendar day is a Saturday, Sunday, or legal holiday, the period continues to run until the end of the next business day
  • The ten calendar-day period described above begins on April 28, 2020.
  • The eight-week covered period began on the date of first disbursement.
  • Notwithstanding this limitation, lenders are not responsible for delays in disbursement attributable to a borrower’s failure to timely provide required loan documentation, including a signed promissory note. Loans for which funds have not been disbursed because a borrower has not submitted required loan documentation within 20 calendar days of loan approval shall be cancelled by the lender, subject to the transition rules above. When disbursing loans, lenders must send any amount of loan proceeds designated for the refinance of an EIDL loan directly to SBA and not to the borrower.
The loan forgiveness period was extended to 24 weeks; the portion that must be used for payroll was reduced from 75% to 60%; for full loan forgiveness (partial forgiveness is possible is less than 60% is spent on payroll); • Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees, to provide protections for borrowers that are both unable to rehire individuals who were employees of the borrower on February 15, 2020, and unable to hire similarly qualified employees for unfilled positions by December 31, 2020.; increases to five years the maturity of PPP loans that are approved by SBA (based on the date SBA assigns a loan number) on or after June 5, 2020; extend the deferral period for borrower payments of principal, interest, and fees on PPP loans to the date that SBA remits the borrower’s loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period).
To receive PPP loan forgiveness, a borrower must complete and submit the Loan Forgiveness Application (SBA Form 3508, 3508EZ, or Lender equivalent) to its Lender (or the Lender servicing its loan). A borrower may submit a Loan Forgiveness Application before the end of the 8-week or 24-week covered period, provided that the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness and the borrower’s loan forgiveness application accounts for any salary reductions in excess of 25 percent for the full covered period. Please note that your Lender won't be able to file your forgiveness application with the SBA until August 10, 2020 which is when the PPP Forgiveness Platform goes live. See the NAR video on PPP forgiveness.
Yes. PPP loans covers payroll costs, including costs for employee vacation, parental, family, medical, and sick leave. As long as 60% of the PPP loan is used towards payroll (including sick leave) then the loan is eligible for forgiveness.
Economic Injury Disaster Loans (EIDL)
  • Economic Injury Disaster Loans (EIDL) are offered by the Small Business Administration and available to both small businesses and independent contractors. You may be able to get an advance of up to $1000/employee. No payments are required to repay the loan for the first 12 months. The interest rate for these loans is 3.75 percent. Find out more on the SBA website.
  • SBA is providing an automatic deferment on existing SBA Disaster Loans through the end of 2020 to help borrowers still paying back loans from previous (pre-Covid-19) disasters.
RI SMALL BUSINESS ASSISTANCE

The Restore RI grant application is now available at commerceri.com/about-us/restore-ri. The program provides $50M in grants for small businesses that have been most severely impacted by the COVID-19 pandemic. Eligible small businesses can apply for grants of up to $15,000. Grants will be calculated based on whether the business is in a severely impacted industry, the number of full-time employees, and the degree of revenue loss. Detailed eligibility requirements, Frequently Asked Questions, a grant estimator calculator, and a list of required documents needed for applying can be found on www.commerceri.com. Watch the July 30 Commerce RI Facebook Live event.

  • NEW 6/8/20: The Providence Commercial Corridor Micro-Business Loan Fund offers eligible business applicants loans of $500 to $5,000 to pay for physical alterations required under state reopening guidelines, as well as personal protective equipment for employees. Recipients will also receive technical assistance in small business management, financial coaching and training through the Center for Women & Enterprise.The pilot program is limited to micro-businesses in commercial corridors of Broad, Cranston, Broadway and Westminster streets and Elmwood Avenue. Businesses must have fewer than 10 full-time employees and earn less than $250,000 annually.The loans have two-year terms, with options for zero interest if repayment begins as soon as the loan is issued, or a 2% interest rate after a six-month grace period.Applications are available on the City Council website.
  • Free PPE and supplies for small businesses
  • If companies have questions regarding access to capital and other lending options, please call the RI Small Business Hotline at (401) 521-HELP or e-mail info@commerceri.com.
  • You can also find an array of non-SBA loans on Commerce RI’s website.
  • Microsoft Providing Six Months of Office 365 Tools for Free – Learn more.

GSEs and credit update

This morning the FHFA announced that it would allow the GSEs to extend credit to home buyers who took forbearance under certain conditions.

  • Borrowers who take forbearance, but continued to make their mortgage payments or reinstated their mortgage and are therefore current on their mortgage are eligible to refinance or buy a new home at any time
  • Borrowers who do not make payments in forbearance, but make three consecutive payments under their repayment plan, or payment deferral option or loan modification are also eligible to refinance or buy a new home.
  • The announcement leaves unclear what the effect of a missed payment is on the borrower’s access to credit. NAR has requested clarity from the FHFA.

The FHFA also announced that it would extend the period for mortgages in forbearance that the GSEs would be eligible to purchase. An issue impacting lenders at the moment is that many loans go into forbearance after origination, but before the originator sells the loan to Fannie, Freddie, or the FHFA. A few weeks ago, the FHFA allowed the GSEs to begin to purchase these loans for a limited time, but for a steep fee. The new timeline is that the note date must be on or before June 30, 2020, as long as they are delivered to the Enterprises by August 31, 2020

These changes should help to clarify the impact of forbearance for those who have taken it or are considering. Furthermore, ti should help ease concerns about these home buyers ability to play a part in future home sales.

TAX INFO

For information on new tax extension deadlines applicable to 1031 Like-Kind Exchanges, Opportunity Fund investments and estimated quarterly tax payments, please visit our Real Estate Specific Updates page.

 

UNEMPLOYMENT BENEFITS

The RI Department of Business Regulation has applications for unemployment insurance on the DLT website. More questions about unemployment insurance benefits? Please see the FAQ resources below:

 

Information REALTORS® need to know:

This page and the links below will be continually updated as information becomes available.

Thank you for your patience during this challenging time. Please check this website often for updates. If you have further questions after reviewing this information, please email covid19@rirealtors.org.

For legal questions, please contact Monica Staaf – General Counsel at 401-432-6945 or monica@rirealtors.org.

Looking for legislative or municipal updates? Email your questions to governmentaffairs@rirealtors.org.

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