To all our clients and business partners, below is a link to PDF prepared by the U.S. Chamber of Commerce regarding The Coronavirus Aid, Relief, and Economic Security (CARES) Act.
It provides information on emergency loans for small businesses, eligibility requirements, borrowing parameters, and how to engage.
Here is additional information on the CARES Act and the Paycheck Protection Program (PPP) from the Victor Chamber of Commerce and Canandaigua National Bank:
Paycheck Protection Program (PPP)
What is it?
Eligible business and not-for-profits will be able to borrow up to 2.5 times their average monthly payroll costs calculated using the 1 year period before the loan is made but excluding payroll amounts over $100,000 for employees making more than $100,000. Plus, any outstanding amounts of any Emergency Injury Disaster Loans (EIDL) that were obtained on or after January 31, 2020. Those EIDL loans are eligible to be refinanced under the PPP. Up to a maximum loan amount of $10,000,000.
What is the application period?
Now through June 30, 2020
Who is eligible?
Businesses, not-for-profit organizations, self employed individuals, sole proprietors & independent contractors that meet U.S. SBA size standards as follows:
The greater of –
+ Where applicable, the SBA size standard for employees within the industry that the borrower operates by NAICS code; or
+ The lender must also consider:
+ Whether the applicant was in operation as of February 15, 2020; and
+ Had employees for whom they paid salaries and payroll taxes or paid compensation to independent contractors
Who can make these loans?
Lenders who have delegated authority from the SBA. Canandaigua National Bank & Trust Company will be making these loans.
What can I use the loan for?
Eligible use of proceeds includes:
+ Employee salaries, commissions or other similar compensation as well as other payroll costs.
+ Costs related to the continuation od group health care benefits
+ Payments of interest on any mortgage obligation (cannot be used for prepayment penalties or principle payments on a mortgage)
+ Interest on any other debt obligation where the debt obligation was incurred prior to the covered period
Other loan features:
+ No collateral requirement
+ No personal guarantees required
+ No fees
+ Automatic payment deferral for 6 to 12 months
+ No prepayment penalty
+ The is a debt forgiveness provision
Tell me more about the debt forgiveness provision!
Borrowers will be eligible for debt forgiveness on these loans in an amount equal to loan proceeds that were used to pay:
+ Payroll costs
+ Any payment of interest on a covered mortgage obligation
+ Any payment of rent made under a lease obligation that was in place before February 15, 2020
+ Utility payments for electricity, gas, water, telephone, or internet access as long as the service began before February 15, 2020
+ Made during the 8 week period at the time of loan origination. Additional documentation will need be provided to the lender to document debt forgiveness.
+ Borrowers will need to certify the following:
+ That the uncertain of current economic conditions makes necessary the loan request to support the ongoing business operations of the business.
+ Acknowledging that funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments and utility payments.
+ That the eligible recipient does not have an application pending for a loan under this program for the same purpose and duplicative of the amounts applied for or received under a covered loan; and
+ During the period beginning February 15, 2020 and ending on December 31, 2020, that the eligible recipient has not received amounts under this program for the same purpose