Upstate Entrepreneur Virtual Ecosystem Workshop – February 3, 2021

Speaker Contact Information

The workshop focused on the program changes and moving forward activities for business owners to access Paycheck Protection Program 2nd Draw Funds, Economic Injury Disaster Loans and traditional SBA loan payment forgiveness.

Below are the key program changes, important guidelines, links to related websites and a copy of the chat comments and questions with abbreviated answers. The Upstate Entrepreneur Ecosystem and Ten at the Top are not experts on these topics and request that you talk with Earl Gregorich at the SBDC (contact information above) or your accountant to ensure complete understanding and compliance.

For answers to the questions in the chat, please watch the video.  You may access the video here.

SBA website with Relief Options: quicksignup.com/small-business-guidance-loan-resources/

Key Program Changes:

• PPP is only available for companies under 300 employees (500 employee limit last time).
• Applications capped at $2,000,000 for 2.5 months of average monthly payroll ($10,000,000 cap last time).
• All PPP 2nd Draw loans will have the same terms, regardless of lender or borrower.
• The list of acceptable expenses expanded.
• Some non-profit organizations are now eligible for PPP support.
• For EIDL, agricultural businesses with 500 or fewer employees are now eligible.
• For businesses with SBA 7(a), 504 and Microloans, excluding PPP loans, debt relief for up to 6 months of principle, interest and related fees is available for all loans approved up to September 27, 2020. They do not have to be fully disbursed as in the past.  SBA will make the monthly payments.
• The Shuttered Venue Operators Grant offers up to 45% of gross earned revenue with maximum grants of $10,000,000. Access online FAQ here. The venue or promoter must not have received a PPP loan on or after December 27, 2020 and must have been in operation as of February 29, 2020.
• Some applications have been revised and streamlined.
• Community Development Financial Institutions can now act as PPP lenders.

Important Guidelines

• PPP 2^nd Draw loan applications are available here
• PPP Application period is January 13, 2021 to March 31, 2021.
• Organizations are generally eligible if they had any single quarter revenue that was at least 25% less in 2020 than in the same quarter in 2019.
• For EIDL funds, if you are in a low-income community and previously received an EIDL advance of less than $10,000 or were denied due to lack of available program funding, can apply again for up to the full $10,000.
• All PPP applications are for expenses going forward, no prior expense coverage.
• To qualify for PPP, a business must show a minimum 25% reduction in revenue for any single, isolated quarter from 2019 to 2020.
• Shuttered Venue Operators Grant is not accepting applications yet. More information available here.

Links to Websites:

2nd Draw PPP Frequently Asked Questions Document here

EIDL Application

Shuttered Venue Operators Grant

LenderMatch can help find a lender to PPP 2nd Draw Loans

Faith-based organizations Frequently Asked Questions

Chat Links

From  Earl G – GVL SBDC  to  Everyone :

Acceptable expanded List of Expenses Qualifying for Forgiveness to include – (40% Cap for non-payroll remains)

• “Operations Expense” – business software, cloud computing, other HR & Accounting needs related to operations
• “Supplier Costs” – payments to a supplier for goods essential to operations of the borrower (pre-PPP or perishable)
• “Worker Protection Expenses” – relative to COVID-19 worker safety
• “Covered Property Damage Costs” – due to public disturbances in 2020 not covered by insurance or other

Local lender:

Connally Bradley

Appalachian Development Corporation

cbradley@adcloans.com

864/382-2358

Fund availability is not only for PPP, but it includes waivers for 504, 7a or any other SBA program, funds remain available until expended.

From  Earl G – GVL SBDC  to  Everyone : Keep docs a minimum of 4 years

Chat Q & A

Q: What if you had a 50% decline in one quarter, but revenue increased in the next quarter are you still eligible? Also, is your amount of the loan based on the quarter that makes you eligible or is it based on current expenses/payroll?

A: It is a year over year comparison by quarter. For example, look at the first quarter of 2019 vs. first quarter of 2020. You just need to show that one quarter’s payroll needs to be down by 25% to be eligible.

A: has to do with payroll, not loss. It’s 2.5 times average

Q: Can you please elaborate on the 7a and 504 loans which are available to business which opened after February 15th?

A: 7A is the SBA flagship loan product. PPP built out from this. 504 are the microloan products. These are separate from PPP and have existed for years before the pandemic. The SBA guarantees these loans. It is a good time to consider expansion loan for your business due to six month payback on principal and interest, fees are being waived, guaranteeing up to 90% on the guarantees (if you are in the position to take on debt).

Q: Concerning a 2nd PPP grant. When calculating if you qualify to apply for a 2nd loan do you add the first PPP loan amount to your revenue for 2020 and then see if the amount is at least a 25% reduction from 2019 to apply for the 2nd PPP grant?

A: No. PPP loans are not considered revenue, so you do not count these loans or grants as revenue in these calculations.

Q: Do independent contractor classifications matter?

A: Look at the quarter. Lender is helpful in working through questions like this.

Q: As far as forgiveness goes are you hearing of any obstacles keeping businesses from having forgiven funding for PPP loans?

A: The forgiveness form was too lengthy initially and was simplified in December to a one page form. There is a high demand right now, so there may be a delay in deliverables. No issues in forgiveness.

Q: What is the current interest rate on the PPP loans now?

A: 1%, two year maturity prior to June 5(?), then raised to five years. Only for part not forgiven. No early repayment penalties.

Q: As a sole proprietorship, what can you use your PPP loan on the first PPP, can I use it toward payroll, supply?

A: Yes, use PPP loan on payroll and other operational items after 60%. The application form lists out all items. Maintain 60/40 split. With 8-24 week period for calculating forgiveness, many can justify 100%.  PPP and EIDL were meant to be used together; use PPP for payroll, EIDL for operation expenses, for example.

Q: Employees worked for first eight week period, can they still use 24 weeks of payroll after laying people off after eight weeks?

A: Schedule meeting with Earl to ensure qualifications.

Q: Is the EIDL loan at 1% or 2.5%

A: EIDL is at 3.75% for business 2.75 for non-profit for 30 years.

Q: If you put down a deposit for an event, can you use to cover?

A: PPP loans cannot be used for this purpose.  Please see list on borrower application form.

Q: Is there a projection of when PPP funds will run out?

A: No, but when Congress reappropriated PPP has gone well. Should money start running out, there will be additional conversations, but don’t delay!

Q: Does being an independent contractor in 2020 and 2021 qualify you or do you have to be an

LLC or have a payroll system in place as of February 15, 2020 to get PPP?

A: Yes, to pay future payroll. Forgiveness begins when the loan is paid out.

Q: Where does grant go on income statement?

A: Other income for grants, loans different. Consider separate checking account.

What is something within your area of focus you are particularly paying attention to heading into 2021? Why?

As a legislator, I have been focused on education. Covid has consumed much of my attention in 2020. It has also only highlighted the issues within education in SC. The states that are able to capitalize off the disruption will improve relative to other states. The states that cannot will suffer. – Neal Collins

Pundits and consultants are now saying that mid-size communities like Greenville will actually benefit from the ‘de-urbanization’ trend initiated by COVID 19.  We were already growing at an historic rate and these projections may create an even greater demand from folks fleeing the density of bigger cities in favor of places like the Upstate.  The need for consistent and sustainable land use planning is critical.  If we do not develop more reasonable land use patterns, we will jeopardize the very quality of life that we now enjoy and others find attractive. – Mark Farris

I am curious about various organization’s return to office space and what changes may occur with floorplans going forward.  Adoption of at-home work, in part or 100%, how does open space change, furniture needs change, wellness minded improvements at the office, focus on cleanliness and all the cost associated with these changes are all very interesting to me.  – David Feild

For obvious reasons, we are paying attention to what is happening with the virus spread and the intensity of the cases. This impacts our business from many avenues including a claims standpoint, providers ability to treat our members, as well as our groups ability to continue to grow and remain a viable business. Throughout the pandemic it has become apparent that the need to have access to telehealth will remain and this could be an area of growth for our providers, as patients and providers find the convenience of this method of care distribution to be easier and allows the access to be greater. – Angie Gossett

Headed into 2021 our organization will be focused on the 2021 South Carolina Legislative Session, which begins in January.  Legislative advocacy is the primary focus of SCMA, and there are a number of issues we will be engaged on ranging from workforce and education to economic development and regulatory issues.  We need to ensure that South Carolina’s competitive business climate remains strong, that we are cultivating and supporting our future and current workforce, and that we are always thinking one step ahead on behalf of our state’s manufacturing industry.  – Sara Hazzard

We are eyeing the speed at which a vaccine is available to the public at-large. In most audience surveys conducted by arts organizations, many individuals stated that they will feel comfortable returning to arts events at the level they did prior to COVID-19 when a vaccine is available. While we of course are paying attention to further monetary and policy COVID relief for the arts industry, the vaccine is the one item that gets arts groups back to “normal”. – G.P. McLeer

In 2021, I will be paying close attention to small businesses and entrepreneurial support.  2020 has been a very challenging year for local, small businesses and has required many adjustments in the way they operate.  Although many have been successful at staying afloat, I know there are educational opportunities and resources we can offer to help them better prepare for their future as a small business owner.  I understand the importance of these businesses to the character and unique offerings in our communities. – Amanda Munyan

Education/public secondary – virtual opportunities for secondary education students is an area of interest that I am particularly paying attention to as we move forward.  – Mamie Nicholson

Product Development.  The recent wave of economic activity in the southeast remains an oracle of what is to come, with residential, commercial and industrial development.  The Upstate needs to remain mindful of key industrial properties that will need to be preserved in and among other sectors.  Without the ability to recruit quality jobs and investment in our future, our overall growth will be limited.  – Katherine O’Neill

The Piedmont Health Foundation has long been focused on improving transit in Greenville County. The pandemic reminded us that transit is essential for essential workers.  Greenlink’s ridership didn’t drop nearly as much as many larger communities because its riders are so much more dependent on bus service. At the same time, Greenville’s population has continued to grow – even in 2020 as people moved here from larger cities.  So we believe that the work Greenlink staff have done to improve services and plan for the future will be even more vital going forward. – Katy Smith

Business operations and construction growth in the market. – Chuck Saylors

Overall business recovery, employment rates, eviction rates because these factors will impact our ability to raise funds and the level of need in our community. – Paige Stephenson

Has the raised awareness and discussions around racial equity and social justice impacted your business or area of interest? If so, how and what is the ongoing result?

This is a journey Prisma Health has been on for years.  However, the raised awareness has really created the opportunity for more open conversation.  It is a great culture to instill and get people out of their comfort zone to be able to talk and more importantly…LISTEN AND HEAR!  The journey has been one of education.  However, the raised awareness has allowed for not just education, but practice.  I am very pleased with our progress of learning, understanding and curiosity to continue working toward the full appreciation of one another coming from different backgrounds, situations and circumstances.  What a wonderful thing as we can all learn from one another to ultimately get to our common goals and achieve the missions and purposes of our organizations.  We all have a lot of healing to do, but we can do this together…as one people, one nation, but it HAS to be done with intentionality and purpose.  Again, I am very pleased with progress within Prisma Health thus far, but as with any improvement, we have work to do…TOGETHER! – Justin Benfield

The raised awareness regarding racial equity and social justice has definitely impacted the factors which I consider when approaching a policy decision.  For instance, we created a permanent position within the Sheriff’s office to manage cultural diversity issues.  In the past, I have been focused on those who were the loudest (i.e. “squeaky wheels”), but I now understand that some groups in our community are so marginalized that they do not even have the energy to speak up; it is the marginalized and the downtrodden that need our attention the most. – Paul Cain

Racial Justice and Equity took center stage for several weeks early in the summer as Clemson Football Players organized a peaceful march, in which we participated, after the deaths of George Floyd and Briana Taylor.  It was also the catalyst for the formation of a community group called CURE – Clemson United for Race Equity – which has continued to meet and is laying the groundwork for a series of community wide discussions on racial justice and equity. – Susan Cohen

Yes, in the political world, I would think one has to have blinders on to not be thinking about racial equity and social justice. I hope to do my part in continuing to raise awareness and hopefully having some legislative impact in this area. – Neal Collins

Yes – the awareness and discussions around racial equity and social justice have greatly affected the work in which I am involved in both private foundations and non-profits. This will be an ongoing conversation and will result in the way entities in which I am involved allocate funds. – Minor Shaw

Yes, it has been a component of our work. It has now being approached in a much more intentional manner. We are having different conversations within our team and at our board meetings and are developing a plan to operate as a more equitable organization. We have instituted an annual race equity training for our board and team members. Equity measures will be a stated measure in our investment decisions. By July 2021, we will have a formal anti-racism statement that will be publicly posted and guide how we operate. – Paige Stephenson

To view “Focus on the Future: Understanding the ‘New Normal'”, click here.

To view Focus on the Future Panelists, click here.