Pinnacle Bank wishes to extend to all of our valued customers the latest information that we have available to us from the federal government regarding the current loan/grant programs signed into law on Friday (please know that some of the details and guidance continue to change and/or be updated daily).
First, there are 2 loan programs available to small businesses:
- Economic Injury Disaster Loan (“EIDL”)
- Paycheck Protection Program (“PPP”)
One component of the EIDL is an immediate $10,000 grant for those that apply (discussed more fully below). The interested business should apply directly with the Small Business Administration (“SBA”) for this loan program. SBA’s website has recently been updated.
Important new information to know in relation to the EIDL can be summarized in a recent SBA statement…..
The official statement on SBA’s website…
“In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. The loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid.”
Regarding the Paycheck Protection Program loan, Pinnacle is a participating lender and we wish to assist you. We are awaiting continued regulatory guidance as to the final details surrounding the program. However, we have been provided the SBA application and we have compiled instructions on completion of this application. To apply for the Paycheck Protection Program loan, click on the following button:
Interested firms should immediately begin gathering this data. We advise all businesses to first consult with their CPA to determine the documentation needed, compute payroll costs, and then figure the amount of loan that they may qualify for.
It is important for applying businesses to understand the parameters of both loan programs and to know that BOTH programs may not be available to them (only one or the other). Here’s the exclusion below:
The Small Business Administration currently has two major loan programs in response to COVID-19. A business can apply for both the Economic Injury Disaster Loan program and Paycheck Protection Program IF there are different uses of proceeds for each program. Funds from these loans cannot be comingled.
Pinnacle will process your fully completed application with all necessary attachments as soon as we verify all information. Once processed, please expect a minimum of 3-5 business days for the application to be considered at the federal level due to high volume anticipated at the SBA. In some cases, it could take longer.
If you choose the Paycheck Protection Program, again, we advise you to immediately consult with your CPA or other advisor, and then begin compiling all payroll cost information, etc. It’s required by the PPP for determining application loan amount, documentation required and forgiveness amount.
Also, please understand that additional regulatory guidance should be forthcoming, so terms for the PPP loan are subject to change. We will notify you as they do.
Thank you for your business!