SBA COVID assistance available through local banks

Small businesses and certain non-profits that have been hit hard by the economic impact of the COVID-19 virus may qualify for assistance through the Small Business Administration, and two local banks are taking applications for those programs.

The Paycheck Protection Program provides relief to keep workers employed, and Economic Injury Disaster Loans are also available to those who qualify.

In Clarendon, Herring Bank and Pilgrim Bank are currently accepting SBA program applications. The Donley County State Bank was not yet taking applications Tuesday.

Paycheck Protection Program
The Coronavirus Aid, Relief, and Economic Security (CARES) Act established last month the new $349 billion Paycheck Protection Program. The Program will provide much-needed relief to millions of small businesses so they can sustain their businesses and keep their workers employed.

“This legislation provides small business job retention loans to provide eight weeks of payroll and certain overhead to keep workers employed,” said Treasury Secretary Steven T. Mnuchin. “The loans will be forgiven as long as the funds are used to keep employees on the payroll and for certain other expenses.”

The new loan program will help small businesses with their payroll and other business operating expenses. It will provide critical capital to businesses without collateral requirements, personal guarantees, or SBA fees – all with a 100 percent guarantee from SBA. All loan payments will be deferred for six months. Most importantly, the SBA will forgive the portion of the loan proceeds that are used to cover the first eight weeks of payroll costs, rent, utilities, and mortgage interest.

The Paycheck Protection Program is specifically designed to help small businesses keep their workforce employed. Visit SBA.gov/Coronavirus for more information on the Paycheck Protection Program.

Loan Terms & Conditions: Eligible businesses: All businesses, including non-profits, Veterans organizations, Tribal concerns, sole proprietorships, self-employed individuals, and independent contractors, with 500 or fewer employees, or no greater than the number of employees set by the SBA as the size standard for certain industries; Maximum loan amount up to $10 million; and Loan forgiveness if proceeds used for payroll costs and other designated business operating expenses in the 8 weeks following the date of loan origination (due to likely high subscription, it is anticipated that not more than 25 percent of the forgiven amount may be for non-payroll costs).

All loans under this program will have the following identical features: Interest rate of 0.5 percent; Maturity of two years; First payment deferred for six months; 100 percent guarantee by SBA; No collateral; No personal guarantees; and No borrower or lender fees payable to SBA.

The Paycheck Protection Program is available through June 30.

EIDL Program
Businesses in the entire State of Texas are eligible for the SBA Economic Injury Disaster Loan program due to the COVID-19 pandemic.

“SBA is strongly committed to providing the most effective and customer-focused response possible to assist Texas small businesses with federal disaster loans. We will be swift in our efforts to help these small businesses recover from the financial impacts of the Coronavirus (COVID-19),” said Administrator Jovita Carranza.

“Small businesses, private non-profit organizations of any size, small agricultural cooperatives and small aquaculture enterprises that have been financially impacted as a direct result of the Coronavirus (COVID-19) since Jan. 31, 2020, may qualify for Economic Injury Disaster Loans of up to $2 million to help meet financial obligations and operating expenses which could have been met had the disaster not occurred,” said Carranza.

Eligibility for Economic Injury Disaster Loans is based on the financial impact of the Coronavirus (COVID-19). The interest rate is 3.75 percent for small businesses. The interest rate for private non-profit organizations is 2.75 percent. SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years and are available to entities without the financial ability to offset the adverse impact without hardship.

Applicants may apply online, receive additional disaster assistance information and download applications at https://disasterloan.sba.gov/ela. The deadline to apply for an Economic Injury Disaster Loan is December 21, 2020.

For more information, local banks can be contacted at the following numbers: Herring Bank, 874-3556, and Pilgrim Bank, 874-2080.