SMALL BUSINESS ASSISTANCE SEMINAR QUESTIONS & ANSWERS

GENERAL: 1. Are there any assistance programs available for businesses with just 1 owner and no employees? Yes. 1) The State of has its emergency bridge loan program; 2) the SBA EIDL are available to businesses with just 1 owner and no employees; and 3) businesses are also eligible for a PPP loan if you are an individual who operates under a sole proprietorship or as an independent contractor or eligible self-employed individual. Those applications cannot be submitted until 4/10/2020. 2. If you are not approved by a bank, can you reapply from another lending institute? Yes. Also, there is no credit elsewhere tests. You can choose a “non-lender” option online to seek EIDL loans directly from the SBA. In addition, there a non-traditional lenders that can participate in the PPP Loan Program, but I would recommend applying through a lender than knows the SBA regulations and processes. 3. Can you apply for both and EIDL grant or loan and the PPP? Yes, so long as the loan funds are not used for the same purpose. If you use EIDL loans for the same purpose of EIDL loans, the EIDL Loan can be refinanced under your PPP Loan. 4. Do you need to be an Achieva Credit Union member to partner for a PPP loan? No. But in order to take advantage of Achieva’s helpful guidance and support of your application, you will need to first sign up as an Achieva Credit Union member. 5. Is Achieva Credit Union an approved SBA lender for Paycheck Protection Program? Yes. 6. If an employer uses a PEO (like Trinet or ADP Total Source) to process their payroll can they still apply for a PPP since technically the payroll is reported under the PEO’s FEIN? Yes. The employer can still apply for a PPP Loan. 7. When figuring out salaries for tip employees, do you include their tips and hourly wage? Yes and Yes. Under the PPP Loan application, cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips) are included. 8. If you have an automobile that is used for your business, can that be classified as a business expense? I would consult your financial partners and/or CPA. Generally, The expense of driving a car for business purposes (not commuting or other personal use) is a legitimate business expense, and you can deduct these expenses on your business tax return. 9. Am I right in understanding that you should apply for PPP first before EIDL? Not necessarily. You should select the option that best suits your businesses loan term needs. EIDL is more of a “cash flow” loan and PPP is for businesses that have had economic impact from COVID-19 and wish to utilize loan funds to maintain payroll costs. Please consult your SBA Lender to see which option may be right for you. 10. I applied for the Disaster Loan Assistance already. If I do end up getting the grant but choose not to go further since I would rather use the PPP loan would that be an option? Absolutely. If you get a $10K grant from SBA through your EIDL application, this is a grant and not a loan. Therefore, you would not have to pay back that $10K amount received. Whether or not your business gets a grant, you can always apply for a PPP Loan if your business qualifies. 11. I've applied for the EIDL and the PPP. Do I continue to pay my employees based upon their average hours worked for the next 8 weeks or do I have to wait for approval? This is an important question to raise with your CPA and SBA Lender. The law is intended to encourage employers to bring employees back on payroll once they receive the loan. The amount of loan forgiveness you are eligible for depends on the average number of full-time employees you have on payroll during the 8 weeks after you receive the loan compared to the average number of full time employees you have on payroll between February 15, 2019 to June 30, 2019 OR January 1, 2020 to February 29, 2020

PAYCHECK PROTECTION PROGRAM: 1. I have both W-2 employees and 1099 contractors. Are both types applicable? No. Independent contractors have the ability to apply for a PPP loan on their own, so they do not count for purposes of a borrower’s PPP loan calculation 2. Are you required to keep everyone on your payroll or just some? The purpose of the PPP Loan is to retain your workers and maintain payroll. You will provide to your SBA lender documentation that verifies the number of full-time equivalent employees on payroll and the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight weeks after getting this loan. 3. How does PPP work with employees receiving unemployment payments due to recent layoffs? Contact your SBA lender for your payroll cost calculation. Keep in mind that your business will have to provide documentation verifying the number of employees on payroll and pay rates, including IRS payroll tax filings and State income, payroll and unemployment insurance filings. 4. Does your business have to be closed down to qualify for the PPP or can the business still be active (but struggling)? Any business that is eligible under for PPP loan under the size (less than 500 employees) or SBA’s exceptions listed can qualify for a PPL. Your business does not have to be closed or shut down in order to participate in the PPP Loan program. 5. Do we submit PPP applications online or at an approved banking branch? PPP Loans applications may be submitted online if your SBA lender’s institution has an online application. Remember, PPP Loans are through SBA lenders and not the government itself. EIDL loans are SBA loan applications that are submitted directly online. PPP Loan applications vary by how your lender prefers application submission. 6. If my business is an S Corp and I have one employee on payroll, will I qualify for the PPP? Yes. I have several 1099 contractors. I also in essence get paid, but it's with whatever profit my business has left at the end of the year. 1099 contractors are not included in your S Corp, but may apply for a PPP Loan individually. 7. If you have an existing Line of Credit can you still apply for the PPP loan? Yes. Depending on your Line of Credit, we recommend you reach out to your lender that you have the line with and ask if a PPP Loan will interfere with your loan documentation for the Line of Credit. Chances are, if your lender is also SBA approved, they may be able to assist you with your PPP Loan application. 8. Are there any special requirements for a church that would apply for the PPP loan? For 501(c)(3) (Church, nonprofit or Private School) or a small business, the PPP Loan application is the same. 9. If we were to downsize and therefore not bring back all of our staff upon re-open, would the PPP loan then not be applicable to us? Or could it still be used for the rent and utilities portion? No. You can still apply for a PPP Loan. Yes, you can use the PPP Loan for mortgage interest, covered rent, and covered utility payments 10. Would rent and payment be forgiven or you would still have to repay that but just with no interest charged? The expected forgiveness amount under the PPP Loan program is the amount of loan principal the lender reasonably expects the borrower to expend on payroll costs, covered mortgage interest, covered rent, and covered utility payments during the eight week period after loan disbursement. At least 75% of the expected forgiveness amount shall be for payroll costs.

SBA: 1. If I already applied online through the SBA and have a confirmation number can I still work through Achieva? Yes. Please contact your lenders at Achieva and they will be happy to speak with you. 2. Will there be a way to apply for a loan directly from SBA as some local banks are not SBA lenders so don't have applications ready anytime soon? EIDL Loans are directly with SBA. Unfortunately, you have to go through a designated SBA lender for the PPP Loan application to be processed. 3. I’m a sole proprietor and the only employee on payroll. I submitted an application on SBA disaster loan assistance website. Is that the right direction for payroll assistance? The PPP Loan program was put in place by the CARES Act to mainly cover payroll costs and allows a forgiveness option. EIDL Loans are more of a cash flow loan. The option that is right for your business will depend on how you wish to utilize the loan funds. 4. I purchased some inventory recently and shipped it out but the company is not going to pay me for the inventory. I put it on a and it is a lost business deal. Can I count that as far as an SBA loan requirement? This question falls outside of the scope of the COVID-19 loan programs, but I would definitely mention this to the SBA Loan officer assigned to your application for an EIDL loan, or to your SBA Lender if and when you apply for a PPP loan.

ECONOMIC INJURY DISASTER LOAN & GRANT: 1. What are the parameters of qualifying for the EIDL grant and where do you go to apply for it? To qualify for an EIDL loan you must be a small business with no more that 500 employees, including cooperatives, ESOPs, and nonprofit organizations, sole proprietors, the self-employed and independent contractors. Your business must also reside in the United States. You can apply for an EIDL loan here: https://www.sba.gov/funding-programs/disaster-assistance 2. If I applied for an EIDL loan already, did I automatically also apply for the EIDL grant? I cannot find where to apply for the grant separately. I believe so. The location to apply for the grant is the same as the EIDL Loan. Essentially, some businesses can qualify for a $10K grant funded to their account within days of the EIDL Loan application submission. The grant does not need to be paid back (even if the businesses EIDL Loan application is denied). 3. Can the EIDL Grant be applied for without also applying for an EIDL loan? The application is the same as the EIDL Loan, so I believe it is a grant that is in connection with the EIDL Loan Application. I would contact the SBA directly with any questions on this online application. 4. I applied for the EIDL loan before the 10k grant was available. I read that I had to fill out another application. Do I now go back to the end of the list? I would contact the SBA directly with any questions on this online application. These programs are considered, “first come, first served”, so you may be processed in the order the new application is received. 5. How is the amount of the EIDL loan determined? On the application it does not ask for the amount you are requesting. The amount of an EIDL Loan is determined by the SBA. The EIDL loan amount can be up to $2 Million.