7 North Bay experts explain the new small-business loans for coronavirus lockdown relief
Congress earlier this month approved $660 billion in payroll protection program loans and economic injury disaster loans through the U.S. Small Business Administration to help entrepreneurs and their employees survive the economic lockdowns since mid-March to slow the coronavirus pandemic.
North Bay Business asked several lenders that handle a lot of SBA-backed lending to local operations the best ways to tap these new sources of help in this crisis. The following are their responses.
Vice President, small business banking for North Bay
Bank of America
10 Santa Rosa Ave., Santa Rosa
Years worked in the banking business: 9
Years at your present position: 9
Significant news at your company in the past year:
Bank of America is once again the nation's top SBA lender, and we have been hiring business bankers locally as well as for other roles at the bank. Bank of America is regularly recognized as a great place to work, and since the onset of the health and humanitarian crisis created by the coronavirus, the bank announced there will be no virus-related layoffs and is providing additional pay to workers deemed essential such as our branch financial center staff.
The bank also committed $100 million to help local community nonprofits helping the most vulnerable populations.
Here in the North Bay, we are allocating some of this philanthropic capital to local nonprofits addressing medical, hunger, shelter and educational needs created by the virus.
What has been the direct impact of the coronavirus on your level of activity?
In times like this, our clients rely more than ever on our advice, services and support. As a top small business bank, we will do all we can to help local businesses and the nation get through this crisis.
From the outset, we have made more than a half million proactive calls to small business clients and reached out by email to millions more to offer support.
Our enhanced Client Assistance Program helps clients who are financially impacted by the coronavirus by waiving certain fees and deferring payments on small business loans and credit cards in addition to mortgages, auto loans and consumer credit card payments.
We have also paused foreclosure sales, evictions and repossessions. In just a few weeks, more than 700,000 clients have deferred loan payments and waived fees. Bank of America was also the first major bank accepting Paycheck Protection Program loans online, receiving more than 335,000 applications totaling about $45 billion in loans so far.
What are the most common top five questions being asked of you by those who hold SBA loans?
There are a lot of questions around the CARES Act (the Coronavirus Aid, Relief, and Economic Security Act) in general, which provides approximately $2 trillion worth of economic assistance to consumers and businesses.
A common question is about resources for new and micro-size enterprises that did not bank with or qualify for traditional financial institutions. There are additional relief resources available to small businesses through the SBA that can be accessed at SBA.gov/disaster and also with Community Development Financial Institutions (CDFIs). As the largest capital provider to CDFIs, Bank of America has committed an additional $250 million to help CDFIs provide Paycheck Protection Program assistance and other needs to those small businesses.
Please explain the requirements to receive an SBA disaster loan.
There are several different relief programs that the SBA, the state and municipalities are offering, each may have different requirements. For the Paycheck Protection Program, for example, small businesses should gather the following documentation that may be needed:
1. 2019 Payroll – total payroll for full year 2019, by employee, as reported to the IRS.
2. 2019 Independent Contractor Costs – Listing of 1099's-MISC for 2019 independent contractors, by person, as reported to the IRS. (Note: Do NOT include 1099's for services)
3. Payroll report as of Feb. 15, 2020 or closest date after that date, by employee.
4. Other information that is required by the application on the U.S. Treasury website.
What small businesses don't know about SBA loan programs, but should?
Bank of America continues to be the nation's top small business lender with about $39 billion in total outstanding small business loans by the end of 2019, this includes SBA 504 and 7(a) programs. So, we understand that SBA lending is a vital part of what we offer our clients and we have personalized conversations with them to help determine how we can help them, either through SBA products or our own resources.