Forum Admin
Natasha and her counterparts at Old Point Bank in Hampton have been diligently processing CARES Act loans since the legislation passed. Read her top of mind thoughts on the process here, then post whatever additional questions you may have in this space. Natasha will be on hand Friday, April 10 at 1 PM to provide answers, so check back then or anytime after to hear her thoughts.
Quote 1 0
Andrea Svendsen
Are there any reasons why we should not apply for both EIDL and PPP?  Will the acceptance of the EIDL advance loan affect the amount we re allowed to borrow for PPP? 
Quote 0 0
Natasha Merz 
Are there any reasons why we should not apply for both EIDL and PPP?  Will the acceptance of the EIDL advance loan affect the amount we re allowed to borrow for PPP? 


Not necessarily although one has to be careful to make sure that the funds of EIDL and PPP are not used for the same purpose. If the EIDL loan was approved to be used for payroll costs then it must be refinanced with a PPP Loan. If the EIDL loan was not used to finance payroll costs, then there is no impact on the PPP loan.
Quote 2 0
Douglas L. Smith Doug Smith
Natasha - great to see you in our new Forum
Quote 1 0
Natasha Merz 
Thank you. Great to be here and assist the business community in any way I can!
Quote 0 0
Douglas L. Smith Doug Smith
Natasha: Can you talk about the size requirements for PPP applications in a bit more detail and what, if any, exemptions there are to the “500-employee rule”?

 

Quote 1 0
Douglas L. Smith Doug Smith
Natasha: You mention in your post that lenders have application packages. Are these the same no matter who the lender is, or is each bank’s different? Also, what besides payroll information will I be expected to give?
Quote 0 0
Kristi Sutphin Kristi
As a local economic developer, how can we best help businesses who have questions about the EIDL and PPP when we ourselves are not the experts?
Quote 1 0
Douglas L. Smith Doug Smith
Kristi: great to see you in our new Forum
Quote 1 0
Natasha Merz 
Natasha: Can you talk about the size requirements for PPP applications in a bit more detail and what, if any, exemptions there are to the “500-employee rule”?

 



Yes. A lender can also use the regular size standards based on the NAICS code for the business that are listed in the SBA directory, whichever is higher. Its important to know that NAICS codes beginning with 72 (accommodations and food services) where there is more than 1 locations, the 500 employee limit is per location.
Quote 0 0
Natasha Merz 
Natasha: You mention in your post that lenders have application packages. Are these the same no matter who the lender is, or is each bank’s different? Also, what besides payroll information will I be expected to give?


Application packages may slightly differ from each lending institutions. After all, we are all still learning while trying to get the necessary funding into the hands of our businesses who need it the most. However, the essential information as far as the SBA Form 2483 and the request for payroll records will be the same.
Quote 0 0
Steve Harrison Steve
In The Washington Post this morning they wrote that 70% of small businesses have now applied for one of these emergency loans.  You wrote in your blog that businesses should not wait to apply; are you hearing anything about when or if these applications could be cut off?
Quote 1 0
Douglas L. Smith Doug Smith
Natasha:  I know businesses are ruching because they need money quickly. Since so much depends on documentation, would I be better served hiring a professional to submit the loan on my behalf?
Quote 0 0
Natasha Merz 
As a local economic developer, how can we best help businesses who have questions about the EIDL and PPP when we ourselves are not the experts?


Lenders have limited information about the EIDL loans since they are administered directly through the SBA. As far as the lenders are concerned, we just need to make sure if our Borrower has already obtained an EIDL loan, the proceeds of that loan were not used for payroll costs, otherwise the EIDL loan needs to be refinanced and rolled into the PPP loan.
Quote 0 0
Forum Admin
Do you have any clients who have applied for PPP assistance and have already received the money? [ I know it's not necessarily an estimate of how long it will take now, but it gives people some idea of timeline?]
Quote 0 0
Natasha Merz 
Steve wrote:
In The Washington Post this morning they wrote that 70% of small businesses have now applied for one of these emergency loans.  You wrote in your blog that businesses should not wait to apply; are you hearing anything about when or if these applications could be cut off?


As of 2:30pm on August 9, about 480,000 loans totaling $124billion were approved. Unless more funding is allocated, there is every indication that the funding will run out within a week
Quote 0 0
Amy Jordan ajordan
Good afternoon Natasha, what loan program do you recommend for independent contractors? 
Quote 0 0
Douglas L. Smith Doug Smith
Natasha: I know the banks have been inundated with applications for PPP. I understand some banks are requiring that a business have their primary accounts with them in order to process an application. Can you comment on that?
Quote 0 0
jschulman
Hi Natasha, is it your understanding that PPP loans can be used for part-time as well as full-time employees on payroll? Also, how about LLC’s taxed as partnerships - any guidance as to how partner guaranteed payments are treated?
Quote 1 0
Natasha Merz 
Forum Admin wrote:
Do you have any clients who have applied for PPP assistance and have already received the money? [ I know it's not necessarily an estimate of how long it will take now, but it gives people some idea of timeline?]


Old Point is getting ready to start funding loans early next week with our offices working around the closing to make the loan process as seamless as possible for our clients, and new clients. Our main focus is to make sure as many businesses as possible get the necessary funding before the money runs out. If our business community succeeds, we all succeed.
Quote 0 0
Douglas L. Smith Doug Smith
Natasha: I understand I can request up to 2.5 times my payroll as a loan amount. Shoulda business ownerI request the most they can qualify for?
Quote 0 0
Natasha Merz 
Natasha:  I know businesses are ruching because they need money quickly. Since so much depends on documentation, would I be better served hiring a professional to submit the loan on my behalf?


If a business chooses to apply through a broker or an agent, one thing to keep in mind that it may not make it to a financial institution. Many financial institutions do not accept applications from a third party due to agent fees that lenders have to pay to those third parties on each loan.
Quote 0 0
Natasha Merz 
Natasha: I understand I can request up to 2.5 times my payroll as a loan amount. Shoulda business ownerI request the most they can qualify for?


Every institution may look at the borrower's request a little differently. I can only speak for Old Point. Our focus is to make sure we help our Borrowers meet their payroll needs as well as other needs such as rent payments, utility payments, meeting interest payments on mortgage obligations, etc. One thing to keep in mind in order to have most of the loan balance forgiven only 25% of the proceeds can be used for eligible expenses other than payroll
Quote 0 0
Grayson.Orsini
Natasha,

You just mentioned that some financial institutions are accepting applications from third parties. Some bigger banks have placed restrictions on who can apply to PPP loans, etc. What additional restrictions or requirements on borrowers are local banks putting in place? 
Quote 1 0
Natasha Merz 
jschulman wrote:
Hi Natasha, is it your understanding that PPP loans can be used for part-time as well as full-time employees on payroll? Also, how about LLC’s taxed as partnerships - any guidance as to how partner guaranteed payments are treated?


The focus is on the total payroll costs, regardless if employees are part time or full time. As far as guaranteed partners payments, specific guidance has not been issued from the SBA however, if they are included in the overall payroll costs for the business, they are eligible in order to calculate the loan amount. Documentation on the eligible payroll costs includes payroll processor records, payroll tax filings, form 1099-MISC, and income and expense statement for a sole proprietorship. Bank records are also acceptable if other documentation is not available.
Quote 1 0
Natasha Merz 
Natasha,

You just mentioned that some financial institutions are accepting applications from third parties. Some bigger banks have placed restrictions on who can apply to PPP loans, etc. What additional restrictions or requirements on borrowers are local banks putting in place? 


I can only speak for Old Point but so far, I find there are less restrictions that what we are hearing out there. For example, we are one of the very few institutions who are accepting applications from non-customers or new customers in our area. As a community bank, our focus is truly to serve our community and assist in any way we can.
Quote 2 0
Natasha Merz 
Good afternoon Natasha, what loan program do you recommend for independent contractors? 


The PPP is a great program for independent contractors who are eligible to apply starting today. I would not recommend delaying the process as many lenders are experiencing an overwhelming demand for these loans and it is based on a first come first served basis.
Quote 1 0
Douglas L. Smith Doug Smith
Natasha:  I really appreciate you taking the tie to answer a few follow up questions from the Blog you posted Wednesday. Is there anything you would like to share before we close out this discussion for now?
Quote 0 0
Natasha Merz 
Its a privilege to be able to serve our business community during these uncertain times. Old Point is here to help our businesses in any way we can. It is exciting to see our businesses keep their employees, create jobs and come out strong on the other end!
Quote 3 0
Tim Craddock 
Natasha: Could you discuss the purpose of Main Street Loans and describe how they fit with other opportunities like PPP and EIDL?
Quote 0 0
Natasha Merz 
Natasha: Could you discuss the purpose of Main Street Loans and describe how they fit with other opportunities like PPP and EIDL?


Main Street Loans is a facility that is geared toward larger businesses since the minimum loan amount is $1million and the maximum being $150million. The size standards for eligible businesses have been increased to 10,000 employees or $2.9billion in revenues. As opposed to PPP and EIDL loan products that are geared more toward small businesses of 500 employees or less. From what we understand about these three facilities, all serve a fundamentally similar purpose of supporting our businesses during these uncertain times and providing a "band-aid" until our economy is up and running again.
Quote 1 0
Stephen Connally Sconnally1
Any comment of discussion pertaining to how the SBA/FED has pulled the old bait and switch on the initial terms and promises for the EIDL loan?  It never ceases to amaze me the level or dishonesty from our leaders.  I applied the day before it went live and haven't seen any acknowledgment on the process.  I also applied for the PPP the day it went live and am not making any progress, however, the President says we are giving our money like crazy.  I find this sham of a bail out to be very frustrating to the small business.  I'm thinking the franchise's to big business are doing well getting their applications processed as we are left in the dust again.
Quote 0 0
Natasha Merz 
Any comment of discussion pertaining to how the SBA/FED has pulled the old bait and switch on the initial terms and promises for the EIDL loan?  It never ceases to amaze me the level or dishonesty from our leaders.  I applied the day before it went live and haven't seen any acknowledgment on the process.  I also applied for the PPP the day it went live and am not making any progress, however, the President says we are giving our money like crazy.  I find this sham of a bail out to be very frustrating to the small business.  I'm thinking the franchise's to big business are doing well getting their applications processed as we are left in the dust again.


Since EIDL is managed directly by the SBA, I cannot comment on their processes and timelines. I hear your frustration. As far as the PPP Loan is concerned, you can apply with more than one lender. You will only be approved for one loan with the SBA but sometimes its a matter of making sure your application is seen and is processed. There are multiple lenders that offer the PPP loan to their communities, including the Old Point National Bank of Hampton Roads.
Quote 0 0
Stephen Connally Sconnally1
Thank you.  I applied with my corporate bank as well as my business lender.  I have only heard from one and it seems I am in the process at some stage or another.  I understand the delay.  I am frustrated with the change in the EIDL parameters with the current Administration bragging about the amazing success of it.  The small businesses will continue to suffer despite the Cares Act.  I am thankful for this site and people like you who are truly trying to help us by clearing the water on the details and processes.  Thank you for your efforts despite the no win situation we are all facing.
Quote 0 0
Natasha Merz 
Thank you and all the best to you. I hope your financing comes through for you. Small businesses are so important to our community. Hang in there.
Quote 1 0