A Person Filling Application Form. Apply For The Paycheck Protection Program With An Eligible Lender

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The latest MetLife & U.S. Chamber of Commerce Small Business Index Survey confirms that small businesses remain concerned about the ongoing impacts of COVID-19. According to the study, “More than three in five (62 percent) small business owners believe the worst of the COVID-19 pandemic is ahead of us. With many anticipating worse times, it’s not surprising many small businesses see the need for temporary, targeted government assistance. Nearly three-quarters (74 percent) say additional federal relief funds would be important to their business’ ability to succeed in 2021.” 

Fortunately, the “Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act,” was signed into law as part of a broader stimulus bill related to the ongoing COVID-19 emergency. The bill reopens the lending window for forgivable U.S. Small Business Administration (SBA) Paycheck Protection Program (PPP) loans through March 31, 2021, and allocates an approximate additional $284 billion to enable the hardest-hit small businesses to receive a forgivable PPP loan from an eligible lender. Funding also allows the hardest-hit small businesses to receive a second forgivable PPP loan. Key features of the PPP as part of this legislation include:

— A reopening of the PPP program to first time borrowers, to include many 501(c)(6) organizations that are not lobbying organizations and have 300 or fewer employees

— A second PPP loan is available to most small businesses with 300 or fewer employees that have sustained a 25 percent revenue loss in any quarter of 2020 vs. the same quarter a year ago that previously received an “initial” PPP loan and have used all of the proceeds from the initial loan

— Forgivable expenses are expanded to include, among other new categories, supplier costs and investments in facility modifications and personal protective equipment to operate safely

— Business expenses paid with PPP loans are tax deductible, consistent with Congressional intent in the CARES Act

This latest round of PPP once again gives small businesses and, for the first time, 501(c)(6) organizations, potential access to an essential safety net through up to two forgivable federal loans. The recently enacted legislation amends the prior loan forgiveness rules by providing a much more streamlined and simplified process for PPP loans under $150,000. The SBA will forgive PPP loans up to $150,000 if the borrower submits to the lender a one-page form attesting to their compliance with program requirements. The SBA can conduct audits, so borrowers are encouraged to keep all relevant records.

Since the launch of the initial PPP in April, Atlantic Union Bank has helped more than 11,000 small businesses receive nearly $1.7 billion. We will again do our duty in assisting our small businesses clients access this round of PPP funding and have a large number of our employees currently making preparations. We encourage all banks to do the same, since the only way to obtain PPP funding is through the banking system.

The SBA has not yet released the program requirements for banks, so all banks are awaiting their guidance before accepting applications. We expect that as with the first round of PPP, not all banks will be in a position to take their clients’ applications and some may have specific restrictions. Due to what is expected to be high demand, banks may understandably prioritize their own customers and may not have capacity to accept applications from noncustomers. So it is critical to contact your bank now to see if they can help or if you need to find an alternative who can. Visit www.sba.gov for a list of SBA lenders.

— John Asbury, CEO of Atlantic Union Bank with a branch in Rappahannock County, is a career banker with more than 30 years in commercial and corporate banking.

Editor’s note: Rappahannock Media LLC, which publishes this newspaper, is an Atlantic Union client, and as we reported most recently last week, was one of the Rappahannock businesses that received PPP loans.


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