COVID19

Financial & Business Assistance

FINANCIAL ASSISTANCE/SMALL BUSINESS LOANS

Updated May 19, 2020

  • 5/18 – The Treasury Department and the SBA have released the documents that PPP loan borrowers will need to fill out and provide to their lenders when applying for forgiveness, which you can find here.  Of the four documents posted, all borrowers will need to fill out and provide their lenders with two of them: the PPP Loan Forgiveness Calculation Form and the PPP Schedule A.  The documents include detailed instructions for borrowers to use, delineate the eligible payroll and non-payroll expenses the loans can be used for, and walk borrowers through step-by-step how to calculate their forgiveness/show that they have met the program’s requirements.
  • Check the NAR website for frequently updated information on SBA loans – EIDL and PPP.
  • The Paycheck Protection Program (PPP) Loan Forgiveness Application and guidelines are now available. If you received a PPP loan, you can complete the application and submit it to your lender. You may also be able to submit the application electronically through your lender.
  • Small business owners with PPP loans of less that $2 million won’t be subject to additional scrutiny. Reviews will be focused on larger loans. Read the article.
  • 4/29 Update notice from Mark Hayward, RI Director, Small Business Administration:  SBA is seeing a number of transactions with the WRONG EIN being entered.  Please check the EIN before you hit submit.  You may be stopping other small businesses from accessing the PPP program. Also, if you are using a bot, it will be detected and you will lose your rights to access the system.  Also, to further ensure PPP loans are limited to eligible borrowers, the SBA has decided, in consultation with the Department of the Treasury, that it will review all loans in excess of $2 million, in addition to other loans as appropriate, following the lender’s submission of the borrower’s loan forgiveness application.
  • The Rhode Island Commerce Corporation is doing its best to match small businesses in Rhode Island that do not have relationships with financial institutions with lenders who will be able to process their PPP applications.  If you wish to apply for the PPP program but do not have access to a financial institution that offers PPP loans, contact ppp@commerceri.com.  Or, if the financial institution that you do business with does not issue PPP loans, they should be able to refer you to PPP lenders. Please review this list of documents (documents needed in order to apply for the program) and then fill out the application located at this link: https://crfusa.com/ppp/rhodeisland-ppp-application. For any other questions you may have, please contact Commerce RI by emailing ppp@commerceri.com.
  • How to calculate maximum loan amounts – by business type
  • Commerce RI held a Facebook Live Stimulus Update on PPP loans on April 24th. See what they had to say.
  • SBA Issues PPP Guidance on Laid-off Employees Who Refuse to be Rehired – Businesses that received PPP loans can exclude laid-off employees from loan forgiveness reduction calculations if the employees turn down a written offer to be rehired, according to new guidance from the U.S. Small Business Administration (SBA), which warned that employees who reject offers of reemployment may find themselves ineligible to continue receiving unemployment benefits. The guidance was included among three new questions the SBA added over the weekend to a PPP frequently asked questions (FAQ) file it maintains in consultation with Treasury. The new guidance is included in FAQs 40–42.

PPP Questions:

Yes, SBA is extending the repayment date for this safe harbor to May 18, 2020, to give borrowers an opportunity to review and consider FAQ #46. Borrowers do not need to apply for this extension. This extension will be promptly implemented through a revision to the SBA’s interim final rule providing the safe harbor.
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.
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
  • Rhode Island Commerce, in partnership with Local Initiative Support Corporation (LISC), the Rhode Island Hospitality Association and Bank Newport offers a short-term bridge loan program for our restaurants and smallest businesses (1 to 10 employees) affected by coronavirus closings or restrictions.The program is funded through $1 million from the Rhode Island Commerce Corporation’s Small Business Loan Fund and $1 million from Bank Newport. Loan details: Loans will have zero percent interest. You can apply for these loans starting Friday, April 3, through the LISC website.or call 521-HELP.
  • 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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