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Covid-19 Relief Package

To help meal prep companies, Meallogix has teamed up with the SBA lender Fountain Head to quickly move you through the application process. The SBA has expedited their existing loan application process to get funds to small businesses much faster, given the severity of the COVID-19 outbreak.

The SBA Disaster Loan Assistance

The SBA is offering loans under its Economic Injury Disaster Loan Program to qualified businesses impacted by COVID-19. The disaster loan application can be accessed on the SBA website. Eligible applicants for an Economic Injury Disaster Loan can receive an advance of up to $10,000.

 

This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application. This loan advance will not have to be repaid.

 

The loan application asks for your gross revenue for the 12 months prior to the dates of the disaster (which is January 31, 2020) and the cost of goods sold for the 12 months prior to January 31, 2020.

 

If you did receive an EIDL loan, you can apply for a Paycheck Protection Program loan (see more info below). Then, refinance the EIDL loan into a PPP loan so you could apply for loan forgiveness.

Paycheck Protection Program

Apply here, with our partners over at FountainHead.  After your application, you will be added to a queue for processing and will receive a follow-up email with instructions on how to upload your additional document. 

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The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocates $349 billion for small business loans. Loans are available to small businesses impacted by COVID-19.

Program Overview: The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

The Paycheck Protection Program will be available through June 30, 2020.

Loans can be up to 2.5x the borrower’s average monthly payroll costs incurred during the year prior to the loan origination date. The maximum loan amount is $10 million.

The PPP loan can be used for:

  • Payroll
  • Healthcare premiums
  • Insurance premiums
  • Mortgage or rent
  • Utilities
  • Other debt

These loans may be forgiven if the borrower maintains their payroll during the crisis or restores wages.

The SBA will administer the loans. Local lenders will determine eligibility and credit worthiness without requiring them to go through usual SBA channels to make the process faster.

On March 31, the SBA uploaded a PDF application for the Paycheck Protection Program.

U.S. Treasury Secretary Steven Mnuchin said on Sunday the emergency loan program will start on Friday, April 3. The White House is working with the Small Business Administration to accelerate the start of the program.

“Treasury and the Small Business Administration expect to have this program up and running by April 3rd so that businesses can go to a participating SBA 7(a) lender, bank, or credit union, apply for a loan, and be approved on the same day,” Mnuchin said in a news release on March 31.

“The loans will be forgiven as long as the funds are used to keep employees on the payroll and for certain other expenses.”

The Paycheck Protection Program (“PPP”) authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. All loan terms will be the same for everyone. 

The loan amounts will be forgiven as long as: 

  • The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8-week period after the loan is made; and 
  • Employee and compensation levels are maintained. 

Payroll costs are capped at $100,000 on an annualized basis for each employee. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs. 

Loan payments will be deferred for 6 months.

When can I apply?

  • Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders. 

 

  • Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders. 

 

  • Other regulated lenders will be available to make these loans as soon as they are approved and enrolled in the program. 

Where can I apply?

You can apply through any existing SBA lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating. Visit www.sba.gov for a list of SBA lenders.

What do I need to apply?

 You will need to complete the Paycheck Protection Program loan application and submit the application with the required documentation to an approved lender that is available to process your application by June 30, 2020. Click HERE for the application.

What counts as payroll costs?

Payroll costs include: 

  • Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee); 
  • Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit; 
  • State and local taxes assessed on compensation; and 
  • For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee. 

Other Questions

 

What other documents will I need to include in my application? 

You will need to provide your lender with payroll documentation. 

 

Do I need to first look for other funds before applying to this program? 

No. We are waiving the usual SBA requirement that you try to obtain some or all of the loan funds from other sources (i.e., we are waiving the Credit Elsewhere requirement). 

 

How long will this program last? 

Although the program is open until June 30, 2020, we encourage you to apply as quickly as you can because there is a funding cap and lenders need time to process your loan. 

 

How many loans can I take out under this program? 

Only one. 

 

What can I use these loans for? You should use the proceeds from these loans on your: 

  • Payroll costs, including benefits; 
  • Interest on mortgage obligations, incurred before February 15, 2020; 
  • Rent, under lease agreements in force before February 15, 2020; and 
  • Utilities, for which service began before February 15, 2020. 

Loan Details

How large can my loan be? 

Loans can be for up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount. That amount is subject to a $10 million cap. If you are a seasonal or new business, you will use different applicable time periods for your calculation. Payroll costs will be capped at $100,000 annualized for each employee. 

 

How much of my loan will be forgiven? 

You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs. 

 

You will also owe money if you do not maintain your staff and payroll. 

 

  • Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount. 
  • Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019. 
  • Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020. 

 

How can I request loan forgiveness? 

You can submit a request to the lender that is servicing the loan. The request will include documents that verify the number of full-time equivalent employees and pay rates, as well as the payments on eligible mortgage, lease, and utility obligations. You must certify that the documents are true and that you used the forgiveness amount to keep employees and make eligible mortgage interest, rent, and utility payments. The lender must make a decision on the forgiveness within 60 days. 

 

What is my interest rate? 

0.50% fixed rate. 

 

When do I need to start paying interest on my loan? 

All payments are deferred for 6 months; however, interest will continue to accrue over this period. 

 

When is my loan due? 

In 2 years. 

 

Can I pay my loan earlier than 2 years? 

Yes. There are no prepayment penalties or fees. 

 

Do I need to pledge any collateral for these loans? 

No. No collateral is required. 

 

Do I need to personally guarantee this loan? 

No. There is no personal guarantee requirement. 

***However, if the proceeds are used for fraudulent purposes, the U.S. government will pursue criminal charges against you. *** 

 

What do I need to certify? As part of your application, you need to certify in good faith that: 

  • Current economic uncertainty makes the loan necessary to support your ongoing operations. 

Ready To Get Started?