SBA Program Info and PPP and EIDL loan update: Live Webinar (6-11-20)

Perfect, great. So welcome to SureFront's weekly webinar series at 11 AM Pacific. I am your host, Dylan Lowe, the Director of Marketing at SureFront. And for those of you who are new to this webinar series and are not familiar with us, SureFront is an all-in-one app built for suppliers, showrooms, and sales reps with a patented immersive collaboration technology. And that allows you to do a lot of things, a few of those being allowing you to create a virtual showroom and showcase your product lines, which is really important right now while a lot of showrooms are shut down and a lot of people are unable to travel to those showrooms that are opened up just recently. It also gives you the ability to collaborate and chat with retailers on quotations, buying programs, and purchase orders. And it even allows you to work with manufacturers and factories on your product development. So we're not going to go into too much detail on that because I know most people are here about SBA and PPP loans. But we hold these webinars every Thursday at 11 AM Pacific to provide valuable information to our retail community. To help them get through this crisis. So today we're discussing PPP loan updates. There's a few of them and there's a lot of money left in the PPP loan program, so we'll talk about that and other Small Business Administration programs that you may not have heard of. And I know these are going to be applicable to a lot of suppliers and sellers that are on this webinar. We're also going to have a Q&A at the end, so please start asking any questions you have now in the Q&A icon at the bottom of your screen. I I did receive a few already, so I have those jotted down, but anybody else, use that Q&A icon. There's a chat icon. Don't use that one, just the Q&A icon. Also, our webinar next week is going to be really powerful. It's with Carrie Armstrong, who is a business advisor with the SBA on commercial lease assistance. So for anybody attending now that happens to have a commercial lease, please tune into that one same time next week. We'll send an invite out after this with a follow-up email and a registration button for that webinar as well. So please be sure to tune in on that. In addition to having these webinars every week to help our community during this difficult time, we're also providing a limited number of free seats on a first-come, first-served basis for the SureFront Virtual Showroom app. So again, that allows you to actually show your goods to your buyers virtually, so they don't have to come to you physically in your showrooms or if your showrooms happen to be shut down. So we're trying to do everything we can to help our community during this time. And our panelists today are Ray Bowman, who is the Director of the Small Business Development Center of Ventura and Santa Barbara Counties and has been a wonderful panelist for us several times in the past. Some of you probably tuned into his. And Terry Billups, who is the Assistant District Director of Economic Development for the SBA Los Angeles District Office and is responsible for the economic development in Los Angeles, Ventura, and the Santa Barbara County. So we're very excited to have them both here today. So thank you very much, Ray and Terry. And Ray, I'm going to hand it off to you.

Okay, great. Thanks for inviting me. This is my third time. And for those of you who may not be familiar with myself or my program, I'm the director of the Small Business Development Center. So there's, uh, it's an SBA program. It's sponsored by the SBA. It's— there's literally 1,000 SBDC service centers around the country. I'm one of those 1,000. There's about 49 in California, and I'm part of the Los Angeles network, which there's about 9 in that, in, in that region. And what our mission is, is we provide one-on-one technical assistance in all kinds of different business matters, whether it's marketing or QuickBooks or understanding loans, disaster relief, e-commerce, retail, all these different areas of expertise. We have literally a pool of over, well over 100 business experts that our program hires to provide free one-on-one assistance to you. So again, and I hate to use the word free because it's really prepaid by your tax dollars, so You're actually paying for us whether you use our services or not. And many of you since the first webinar I did several weeks ago, we've heard from quite a few of you. A lot of you are now part of our clientele at the SBDC. So I hope we're delivering on the services that you've asked for and that's helpful for you. So I'm glad to have many of you as clients now. It's a real privilege to introduce both a colleague and a friend, Terri Billups. So again, we're part of— we're one of a number of several different services under the SBA umbrella. We're the technical service end, but we're all under the umbrella of SBA. And Terri's been with the SBA program for a number of years. She's the Assistant Director. The LA District is one of the largest, I think the most productive in the nation in terms of SBA lending, and Terri brings a wealth of expertise not only on the programs that are offered by the SBA but on a lot of the questions involving PPP. So she's here to share the updates, so I'm just privileged and happy that she could join us today. So From here, it's all you, Terri.

Thank you. Sorry, I couldn't get unmuted. Well, good morning everyone, and I'm so privileged to number one be sharing this presentation with Ray. Ray is one of SBA's best partners and best SBDCs. So for those of you who are working with this organization, Lucky you. I'll just leave it at that. And also thank you to Dylan for inviting SBA to share some information not only about PPP and EIDL, but also Dylan had asked for me to share some information about government contracting. So I think it'll be important for you to learn about SBA's other programs outside of just our lending as you figure out how you're going to pivot post-pandemic. And hopefully you'll find information on government contracting basic enough to give you an overview but specific enough for you to make an assumption as to whether or not this might be something you're interested in or something that you feel you could do. And as Ray mentioned, we do have our resource partners, including the Small Business Development Centers across the country. He said 1,000, so he's one of 1,000. But in addition to that, SBA also has 68 district offices. So there should be one near you, and you can always go to the sba.gov website to find out the nearest one to you. And for the LA District Office, we cover 3 counties: Los Angeles, Ventura, and Santa Barbara. So in California, there are a few different offices. So if that's where your business resides, then hopefully there's one near you. So with that, Dylan, can you start the slide deck? So most of you may or may not have heard of SBA. I feel like we were the best kept secret prior to the pandemic, and our mission has stayed pretty much the same since the agency was created in 1953. Dylan, next slide, please. And our mission from the beginning has been to help small businesses start, grow, expand, and recover. So as part of the pandemic, everyone's focused on that recover aspect of what we do. However, SBA has a wealth of other services that are also available to you as small businesses. And as Ray mentioned, our services are offered at no cost. So you can come to the district office or you could go to one of our resource partners, which are Women's Business Centers, Small Business Development Centers, or SCORE mentors. So regardless of where your business is or where you reside, you should be able to find a resource near you. So I think that's really good news as you try to figure out where do you go from here. And I know everyone has been consumed with just trying to figure out how to keep your business afloat during the pandemic. However, there are folks who, you know, are startups and they're thinking that this is a good opportunity to take advantage of. So SBA is there to help you start. If you are in a position that you've had to grow as a result of the pandemic, that's something else that SBA can help with. If you are trying to expand in terms of financial or physical capacity, again, something else that SBA helps with. And of course, all of you are familiar with who we are and what we do now as part of this recovery aspect through our disaster unit. And SBA's disaster unit has always been there. You may have used us as a result of a flood or a hurricane or an earthquake. Or a forest fire, a mudslide, like all of those natural type disasters, SBA's Disaster Division is always there to help small business and the community recover. However, for the pandemic, it's unprecedented. This is unlike anything we've ever seen. So everyone knows who we are now, but I also want you to know all the other wonderful things that we do and all the resources that we have available to you. Next slide, Dylan. So, Ray mentioned that they are a resource partner. Well, SBA partially funds the Small Business Development Centers across the country and also the Women's Business Centers across the country and even SCORE. And if you don't know who they are or where to go, pretty easy, sba.gov. And you're going to hear me use that web address multiple times during this presentation. If you remember nothing else from today, sba.gov. There's so much information, free training, business plan templates. You can spend days there. Trust me, I, I go looking for something to help someone and I end up there for a lot longer than I usually plan on. So you just put in sba.gov/localassistance. We have a tool that allows you to put in your zip code and you can find the resource nearest you. So if nothing else, remember that. Next slide. So I want to talk to you a bit about government contracting. Next. And we have various programs, and for those of you who haven't ever considered federal contracting as a way to expand your revenue stream, I encourage you to do some exploration and see if this is something that might be a good fit for you. And I say that only because there have been so many small businesses that had never even considered getting into government contracting. However, as a result of the pandemic, those who were able to pivot, a lot of them started to make PPE, you know, personal protection equipment, because there was a shortage. And if you were in a business or a segment that had the ability to sort of shift and start to do that, all of a sudden you found yourself doing government contracts where you had never planned for that. So I always say try to be intentional. So for those of you who might not be in those categories but are intrigued by the information I present today, I I encourage you to just explore it. And this is something, again, that if you think it's a good fit and you need more information, you can reach out to the district offices or any of our partners. We also have procurement technical assistance centers in most large markets, so you can also reach out there. So if you want to figure out if it's a good fit for you, you can go to certify.sba.gov, and it will give you an overview of the information that you would need to supply. Next slide. So here's a picture of what Certify looks like. It's a, it's a simple-to-use portal, and it will tell you exactly what you need if you want to register as a federal contractor. And you just go through, answer the questions, upload the documents that it requests, and you're good to go. It seems a little intimidating. However, trust me when I say, if you've made it through your PPP or EIDL applications, you can handle this. It's not that convoluted. Just spend some time and be patient. Next slide. So for those of you who aren't familiar with the fact that the federal government mandates that small businesses are given a fair amount of federal contract dollars, and just to give you an idea of how much the government spends, in fiscal year 2019, which goes from October 1 through September 30, the US government spent $4.45 trillion, and that was reported by the monthly Treasury statement. So when you think about $4.45 trillion, and if you could just get a small percentage of that, that's a huge number. And then when you take into account the fact that 23% of government purchases are to be set aside for small business, that again equates to a huge number. And then within that 23% government contracting goal, there are subcategories. So if you're a woman-owned business, that's a 5% goal of, of that government spend. Small disadvantaged businesses, which includes SBA's 8(a) program, is also 5%. If you're in a HUBZone and you employ people from underrepresented communities, that's a 3% goal. And if you're a service-disabled veteran, that's a 3% goal. So again, when you take that into account and even if, you know, you just got a few contracts per year, that could equate to a lot of new revenue that you had never even considered. And for purchases between $3,500 and $250,000, those are automatically set aside for small business unless they can't show that there's at least two businesses that are capable to perform that. Next slide. So I really wanted to share the women-owned program information with you. So if you're a woman-owned business, and there's some other criteria that we'll cover on the next slide, and you have a product or service that is a good fit for government contracting, and essentially the government buys anything you could imagine. The challenge becomes, how do you fit into what the government buys? So that's the part that takes a little homework on the front end to sort of figure out where you fit and then identify if you have the capacity. And if you do, then I encourage you to either learn more. So educate yourself using the tools that I mentioned on sba.gov, or you can go to actual laws which are in the CFR, the Code of Federal Regulations, and there's a whole section on small business and then the women's Woman-Owned Program. So again, education is the, the tool. So spend the time up front and hopefully now you might have a little extra time during the pandemic or as we recover from it. So the timing might be good for you. Next slide. So to qualify for the Woman-Owned Program, you have to be 51% owner. So if you have a partner and it's a male, you have to be the 51% owner. So you have to be the majority owner. You have to hold the highest position in the company. You have to be in one of the NAICS categories that are specified for things that the government needs for the Women-Owned Program. And there's a whole listing that you can get from our website. And then you have to be managing the daily operations, and you don't have to qualify by being in business for a set amount of time. So those are all things to sort of know upfront. And next slide. And on the NAICS side of things, you can go to the SBA website, and it will give you a listing of some of the categories of what qualifies for the women-owned set-asides. So I looked at it this morning just because I was interested to see, and it's amazing. I think there's over 400 NAICS categories that qualify. And it's everything that you can imagine. I mean, I seen like retail, cut and sew, food, food type manufacturing, food sales, and it was very specific on some of the types like tortillas, I think was on there. I was a little surprised to see that. So if you just keep in mind that pretty much anything that you may do probably is listed on there. So spend the time and go and check it. Check it out. So in addition to knowing if your NAICS category qualifies, you also want to do a little exploration as to whether or not you qualify as an economically disadvantaged woman-owned small business. And there's also criteria for that, and I don't want to spend a lot of time on this because I have a lot to cover. However, I just want to plant the seed so at least you're familiar with it and you go and explore to see if that's something that is a good fit for you. And then I mentioned the rule of two. You have to show that there's two businesses that can supply that product or service. And at that point, then the contracting officer can set it aside where you only compete with other women-owned small business.

Terry, I have a quick question. Would you be able to give some examples of different government contract work that people could have? You know, a lot of the people that are in this webinar are from the gift and apparel industry. We discussed that before. And I know that government contract work tends to cover a lot more than people actually think. It's not just making, you know, cannons and masks. I think there's a lot more to it. So if you could give some examples, that would be awesome.

Sure. So one of the things that I saw today when I looked at— I'm going to click over there and actually read it right from the website. There was like cut and sew. So if you're an apparel manufacturer and you do cut and sew, that was one of the things that was listed on there. I mentioned that, like, frozen fruit and juice manufacturing, that one sort of surprised me. Tortilla manufacturing, textile bag and canvas mills, curtain and linen mills, carpet and rug mills, miscellaneous textile products, cut and sew apparel contractors, men's and boys' cut and sew apparel manufacturers, women's, girls', infants' Sewing, apparel manufacturing, other cut and sew. So I mean, it really scales. There's like screen printing. That's another one. So I mean, there are a lot of different categories and it's pretty simple to look it up. You just go and you can either get it by just Googling and put in NAICS for North American Industry Classification. And when you do it that way, you'll just get the whole directory. But if you go to the SBA website and put in NAICS for women-owned small business, it actually will show you the NAICS number and then the description, and then it will tell you whether it qualifies as just a woman-owned small business or an economically disadvantaged woman-owned small business.

A lot of people will be surprised that they might actually be covered under this. So yes, take those 5 minutes, go check it out and see if you have an eligible category. You never know, it might actually help save your business.

Exactly. And this is the time to really think about diversifying your portfolio of revenue, because I always say there's an inverse relationship between what private industry does and what the government does. Usually when private industry isn't doing well, government is doing better. So if you have revenue coming from both sides of the economy, you can sort of insulate yourself from some of the cyclicality of it. So I I encourage you to at least explore it as an option if it's something that, you know, you think that you would be interested in. Next slide.

Do you see the next slide there? Is that the correct one?

I do. Yeah, I was flipping over. Sorry about that. So I mentioned that you had to qualify as an economically disadvantaged small business. So this is sort of the ratio of, you know, what elements you need to qualify as such. So personal net worth has to be less than $750,000. Your average income over 3 years, it has to be $350,000 or less. And the fair market value of your assets is $6 million. So again, I think these are pretty liberal and most people qualify under economically disadvantaged. Next slide. So in order, in order to start the process, you need to register in SAM, and SBA is going through some changes right now to make the systems more user-friendly. So I encourage you to reach out, register, update if you're already registered in certify.sba.gov. When it says represent status, you have to represent yourself as a woman-owned business. I encourage you to make sure that you meet the criteria because there are criminal penalties if you misrepresent yourself. So, you know, you want to make sure that 51% is accurate. And then it's going to ask you to provide some documentation. And again, that's user-friendly and you just do an upload. Next slide. So to get the most out of the program, you want to make sure that you're a good fit. First and foremost, you want to make sure you have the capacity. Again, these are ways that you can leverage our resources to help you through that process. And then once you know that, you register, then you qualify for set-aside or sole source contracts and even subcontracting. So there's a lot of opportunity there once you educate yourself and learn how to navigate it. The other thing is we also offer programs in joint ventures and the All Small Mentor-Protege, which allows you to get a mentor and you can learn from them. Or if you do something and you can join with someone else, and together you can produce a product, that's another great opportunity to expand your revenue stream. And then the other thing is we also offer as part of that program training and assistance and even loan programs. And for those of you who know someone who might be in construction, even bonding assistance for surety bonding. Next slide. So again, I'm going to just kind of skim over this because it's sort of redundant, but the women-owned and Economically disadvantaged, it's the rule of two, so you and someone else. If there's only you, then you can get a sole source because, you know, simply there's no other person that does it except for you. So again, if you have a niche, that's perfect. Next slide. I think we kind of covered this, where you need to go find your eligible NAICS. You have to make sure that when you do your contract that that it's at a fair and reasonable price. The thresholds are $6.5 million for manufacturing and $4 million for all others. And then if you're a sole source, then again, it would just be awarded to you without any competition. Next slide. So I also wanted to mention to you our 8(a) program. So under our small disadvantaged businesses, the 8(a) Business Development Program is something that you have to apply for through SBA. It's a great program because it really is business development for 9 years. The caveat to it is you have to meet both social and economic criteria in order to apply. And then once you're allowed into the program, it's only for 9 years. The first 4 years are for you to build your business, so it's considered the development phase, and then the last 5 are for you to actually build capacity, and you're required to have a distribution of not only government contracts but also public contracts. And the reason for that is to wean you off of government contracts so that you're able to be competitive in any market. And if we do our job and you do your job, you can even graduate early. So if you meet a certain economic threshold, then we kind of say, okay, you've done well enough, you have to graduate early. So if I had my way, that's what everyone would do because that would mean everyone's highly successful in the program. Next slide. The other program I wanted to mention is HUBZone. And again, this is one of those set-aside categories. The government has HUBZones and it's an acronym that stands for Highly— or Historically, I'm sorry, Underutilized Business Zones, HUBZone. And the whole purpose is to stimulate capital investment in underrepresented areas. And help those communities build capacity and grow, and then also to encourage employment from those communities. So, next slide. So one of the things you will have to do if you find you qualify for a HUBZone, and you can do that simply by going to the sba.gov website and then you go, just put in keyword HUBZone, and there is a tool in there, you put in your street address and it will tell you if you're in a HUBZone or not. And always put in the street address because if you just look at the geographic map, it could look like you're not in one, and one side of the street not be in one, but the opposite side of the street be in one. So that's why you always want to use the, the street address. Once you identify yourself as being in one, then you need to get registered as being in one as a small business. And then there's other caveats such as you have to have 35% of your employees live in a HUBZone. Doesn't have to be the exact same one, but they have to be employed from HUBZone areas. So again, goes back to that economic growth model that that's the real purpose is to encourage investment and community growth in those areas. Um, so here again are the eligibility requirements: 51% owned by U.S. citizens, the business has to be located in the HUBZone, there's the 35% requirement of having your employees from there, you have to be small by the SBA size standard, You also have, if you have several offices, then it's wherever your main office is. And then of course we look at ownership, must be, you know, a US citizen. Your principal office has to be in a HUBZone. Then that residency requirement and then the size. And the SBA does do a review of these HUBZones, so they can change. However, once they do, there's a grandfather. So if you already have a contract, you can still perform on that contract if you we're in a HUBZone and it changes. Next slide. So the next set-aside program that SBA has is the Service Disabled Veteran-Owned. So for those of you who might be veterans, and keep in mind that you can be in all of these categories. We call those unicorns at SBA. So if you are a woman and you're a veteran and your business is in a HUBZone, um, and we look at it, and you're an 8(a), you are what we call a unicorn because you qualify for credit toward that agency that makes the award in every one of those categories. So if you have one or more, good for you. If you're looking to do a partnership or something, you might want to find someone that has one of those classifications that you don't. So again, that's something to consider as you figure out how to leverage your designations and someone else's at the same time. So similar requirements, you have to be the veteran, 51% ownership of the business, highest officer position, you have to have a NAICS category that qualifies, and then you have to have managerial experience and you have to manage the daily operations. So it can't be a front. And again, why do we do this? Simply, it's to help service-disabled veterans to be active participants in the economy and to, in a way, thank them for the fact that they, you know, have served their country well. And also to encourage entrepreneurs who have been veterans to qualify for some of these set-aside categories. And also for the subcontracting. So the requirement for this is that you be certified through the VA. So, you can get that designation at vetbiz.gov. So, that's how you would qualify. Next slide. So, I mentioned that you can get a mentor or protégé. SBA has a program for that. And again, you can access business development assistance. The intention is to help you build capacity. And perhaps you don't know that much about government contracting. You can pick a mentor that has the ability to sort of mentor you and teach you the process of navigating through government contracting. And then also you could decide to do a joint venture. Next slide. So in order to get the most of an All Small Mentor-Protege, it actually helps small businesses to join together and have the smaller business actually, or the protege, and it could be equally sized, so I shouldn't say smaller, the more experienced mentor share their knowledge and expertise and their lessons learned with a protégé. They can take advantage of that and help them as they start to build capacity and knowledge for government contracting. And what the mentor gets out of it is they can compete with you for contracts that somehow, you know, you augment the business they have, they augment the business you have. Next slide. So again, is it for you? First, you need to find out who you would like to have as a mentor, and you could, you know, speak to them and see if it makes sense, if they'd be willing to do it. And there are requirements that they have to meet, just as for the protégé side, there are requirements you're going to have to meet. And then once you decide that you'd like to do this, there's a contractual relationship between the two of you. There's some training you'll have to go through, and then you'll have to specify the NAICS categories that you're going to participate in as an entity that came together under a mentor-protégé agreement. Next slide. So, the eligibility, again, is that you have to meet the small business size standards. You have to show that you have the financial capacity to be able to perform. Usually, they're going to look at your past performance, make sure you're not disbarred. They're going to say the mentor is going to perform these contractual obligations. The protégé is going to perform these obligations. So that way, that demonstrates that as the protégé, you're not being exploited in any way, and you're actually developing as a business by partnering with the mentor. So it really is to protect you, and that's the defined roles piece of it. And then the, the recording and reporting part. You have to, you know, submit reports showing that who did what and how the dollars are allocated, and then also the management piece of it— who's managing what, who is the mentor, who is the protégé— and then follow the contract as it was created. Next slide. So now we're getting to the loan programs. This is what you joined for today, right? PPP and EIDL. But I actually am going to share a little more information about our other programs. Next slide. So you all know that as a result of the pandemic, the Economic Injury Disaster Loan Program was created, and then also the Paycheck Protection Program. And when I say that Economic Injury Disaster Loan Program was created, the reality is our disaster loan program has always been in effect. The difference is it was changed to add the advance component as a result of the pandemic. And of course, as part of the CARES Act, that's where the Paycheck Protection Program came in. And we have had some program changes, as Ray alluded to earlier. Next slide. So how can our loans help you? Well, if you haven't gotten one, the intentions outside of the pandemic are to help you either start a business or help you scale, or if you want to buy a business. So for those of you who might be looking at expanding, You could buy a business with an SBA loan. If you need working capital, on our 504 loan programs, it actually can help you buy a building or capital equipment. And then we also have export loans. So again, just another thing that SBA does. Next slide. So I want to talk about the EIDL and EIDL Advance. So for those of you who haven't already applied for EIDL but were interested, Right now, EIDL is not taking any new applications unless you fit into a few specific sectors that are related to agricultural. So as of now, the EIDL Advance piece cannot be applied for unless you meet the criteria as being in one of those agricultural sectors. We expect it may open on a wide scale again, but I don't have any definitive information on if and when that might happen. On the Paycheck Protection Plan side, the awesome news with that is we do still have funding available and you are still able to apply. So if you haven't, or if maybe you tried in the beginning and you couldn't find someone to take your application, don't hesitate and go out and apply. And if you're having difficulty, always go to your lender first. But if you can't find a lender, use our Treasury.gov partner website. And they have a finder tool that you can use your zip code and find lenders that are participating. And just to sort of update you, there are over 5,400 lenders nationally comprised of large banks, national— large national lenders, regional lenders, small local lenders, credit unions. So there's a wide range of participants on the lending side who can hopefully help you. With that application that you can apply with.

Sarah, how much money is left in the PPP program?

The number that I saw earlier was $150 billion remained, but I know that they did do an allocation of $10 billion for certified development financial institutions to really target underrepresented markets. So that's a lot of money.

I know, you know, some people gave up because, you know, if that couldn't get the loan, if maybe they were going to try to, you know, apply through Bank of America and Bank of America said you can't apply through us and they just stopped right there. So I think it's, it's important and good that you mentioned that there's over, you know, 4,000 different lenders that they can try through it. And so what was that URL they can go to again to search for lenders?

If you go to www.treasury.gov, and that's the U.S. Treasury website, and they have a lot of information that's very useful And some of the information that they have is the actual loan reports on how many loans have been offered for the PPP program. So it will show you, I think they're doing like weekly updates on how many loans and how much money has been allocated. And it breaks it down by state as well. And I believe they may have published also the top lenders too, in terms of volume. So, and value. So take a look at it.

Um, I could see like 4,000 lenders though.

Um, so when you use the tool, if you're having difficulty finding a lender, and it— I think it says like lender finder or lender tools, something like that. You'll know it when you see the hyperlink. You just click that, you put in your zip code, and it will bring you up the list of all lenders in the PPP program, and it starts those closest to you Now, what it doesn't do is filter by those who might still be taking applications. So what I encourage folks to do is you could work with your local SBA district office. So for example, each district office publishes a resource guide, and that guide for us shows all of our active SBA lenders, and it also provides a contact number. So if you see a number on your— a bank name that's near you, and you're not familiar with them, you can go to the sba.gov website for your local community and they'll have that resource guide uploaded in an electronic format and it will give you that information. So for— I can speak for LA and for our 3 counties, our resource guide not only gives you the name of the lender, but it also gives you a phone number to the SBA manager. So that's a huge help because I know that's been a lot of the challenge we've heard is people not being able to connect with an individual at some of the lenders. So the fact that we can get you to at least an SBA manager, it could be very helpful. So if you just sort of cross-reference the two, it's sort of like a cheat sheet.

Great.

So again, if you would like to reach out to our office, our number is 213-634-3855. Or I always say send us a question you have on PPP or EIDL in writing, because if we don't have the answer locally, we'll try to get it to a subject matter expert. That can get us the appropriate answer for you. So LADO@sba.gov, and that's Los Angeles District Office, that's what it stands for, at sba.gov. And we monitor that inbox every day. Our goal is a 24-hour turnaround on responses, but sometimes, you know, it's a little longer if we have to wait for someone else to provide us information. And then for all of you social media users, and I'm sure there's a lot, Our Twitter handle is @SBA_LosAngeles, and we often push new information out. So like the PPP and EIDL changes that came out in the press release on Monday, we push that information out so it will come to you versus you having to go look for it.

Great.

Awesome. And we're going to start the Q&A session shortly. And so any questions that you have, there's been a lot of questions coming in thus far, please press that Q&A button and enter them in there. Ray, is there anything that you'd like to add to that?

Yeah, I realize that there are new— there's some new changes to PPP, so, you know, extended terms, an extension of the forgiveness period. So given that, one of the questions I have, and I don't know if there's an update on this yet, but For someone who has an existing PPP loan, does that mean that they have to go amend their loan with their bank? Do they have to go back to their bank and say, well, gee, in order for me to get these benefits from the changes in PPP, I need to redo my loan or amend the loan? Or is it something that's grandfathered in? So I don't know if there's clarity on that, but that was a question I had.

So there is new information coming out each day, and we don't have answers to every question. So again, for that particular question, what I encourage folks to do is to keep checking that sba.gov website for information or treasury.gov. On the PPP side, there's frequently asked questions that are routinely updated, and that's usually where they'll with the information that comes out in terms of clarifications for PPP. And given that the changes are just out early this week, we haven't received information yet. And I did get some information this morning, but quite frankly, I haven't had time to review it. I was prepping for this call. So there is daily information coming out, but it's usually published on the treasury.gov website, or you can always email us, and as soon as we get clarification we can share it. Or on the contractual piece of it, Ray, as you mentioned, you know, do you have to change your loan agreement? Those are questions you really have to go back to your lender for because the agreement is between the borrower and the lender. SBA is, you know, on the backside, the guarantor. So that, that relationship is truly between the lender and the borrower. And I always say go there first, Talk to your lender first, and I understand, you know, for some it's difficult to find someone because they might have done a completely online application. So in those instances, you know, do your best to try to identify someone if you had someone's name from the loan documents and start there. Worst case, you could probably work with your local district office and they hopefully can connect you with someone and get you to the right person, but that should usually be your first stop is with your lender.

Do either of you know anything about the Main Street Lending Program that has been talked about?

What I can tell you is the FDIC has— that's the FDIC of Boston— they have started to put updated information on their website. Since that's not SBA, it's not something that, you know, I have complete knowledge about, but I do know that they have started to add more information on the website so you can get some information there. Ray, do you know anything additional about it?

No, I don't have anything additional on it, but one of the other questions I had too is on the forgiveness. So now the forgiveness has been relaxed from 75% down to 60%. Is that an all or nothing? That was the other question I had because I've had some questions around that. Does that mean if I don't get up to 60% of payroll, do I not get any forgiveness, or is it something that, that there's still sort of this flexibility that, well, whatever I don't use towards payroll just converts to a loan? So that was, that was one of the questions that I've gotten.

So again, I always say confer with your lender, and the reason for that is just like SBA's other lending programs is when there's clear clarifications that come out that are directly related to the lender and how the loans are structured or information about those loans. We do, you know, updates on our standard operating procedures and they'll do these notices to the lender to give them guidance on what they should do. So again, I always say go to the lender first because SBA will provide them with guidance and clarifications. And on the borrower side, the frequently asked questions, because I mean there is ever-changing information and clarity coming out, and that seems to be the best place to get the most up-to-date information. Or if there's an interim final rule, and I know that's published on the treasury.gov website as well. So any of the clarifications that have come out since the creation of the CARES Act have been published on that website. So you can always go to that interim final rule and do a, you know, Ctrl+F and do a word search if you're looking for something specifically, and chances are you'll find the clarification in those documents.

And I should add too, anything that's not forgiven only converts to a 1% loan. So not, not that terrible. I know a lot of people were confused, like, well, I can't spend the money at all on, on other business expenses, but you can. It just converts to 1% loan if it doesn't fall under the, you know, forgiven categories. I didn't realize it went from 75% for payroll to 60%, though. That's, that's a— that's different as well.

It's a good improvement, I would think, for Yes, so for those of you who haven't seen the press release that came out earlier this week, it came out on June 8th. So if you do a Google search, it's release number 20-45, and it talks about the changes that have come as a result of, you know, the president signing some, some new changes to clarify and make it I'll say more workable for a lot of small businesses.

Got it. And one of the questions that came in is, when will a person need to start paying back the PPP loans, um, or will they need to turn in documents for loan forgiveness? Can they start the process now if they want?

So there are updated documents out. So if you go to that treasury.gov website, there is a new application for forgiveness out there. And I encourage everyone to go out there and look at the updated information because, like I said, I did get some information this morning, but unfortunately I didn't have time to review it from the time I got it to the time of the call. But I know that there have been some new documents published.

But in general, I think that you don't have to start paying back the loan for at least 6 months, right?

Yeah, there is a deferment. So SBA does do a deferment on the payment cycle.

So it's 2 years, 6 months deferment, so you have, you know, a year and a half of repayment period.

And actually, they— so this is what the press release actually states, is that increase of 5 years the maturity of PPP loans that are approved by SBA on or after June 5th, extend the deferral period for borrower payments of principal, interest, and fees on PPP P loans to the date that SBA remits the borrower's loan forgiveness amount. If the borrower does not apply for loan forgiveness, 10 months after the end of the borrower's loan forgiveness period.

Okay, great, great. And then someone else just asked— said— asked two questions back to back. So now the PPP is 24 weeks, uh, is it 24 weeks prior used to allocate funds. Those of us that received before the change was only based on 8 weeks. Can they update to 24 weeks, or is the provision only for 8 weeks?

So I'm going to read to you the way it's written in the press release, and what that says is extend the covered period for loan forgiveness from 8 weeks after the date of loan disbursement to 24 weeks after, after the date of loan disbursement, providing substantial substantially greater flexibility for borrowers to qualify for forgiveness. Borrowers who have already received PPP loans retain the option to use an 8-week covered period.

So those that already received, it says under an 8-week period.

It says that you still retain the option to use an 8-week covered period.

So could they, if they were approved under the 8 weeks, would they change to 24?

I'm trying to read through this press release just so I get it straight.

Ray, have you heard anything on that?

From, from what I gather, from what I read, it's— it just, it extends. The bigger question I have is how you extend it with your bank. In other words, is this something that's an automatic? Extension, is this something you have to request and how do you request it with your bank? But I, but I think when it clicks in is the same amount of time. In other words, from the loan, from the time the loan is disbursed, the clock starts to run either the 8 or 24 weeks. As far as how to request it or how to activate from 8 to 24, I'm unclear about that.

So it doesn't specify in the press release. So again, that's something that I would go back to your lender on because I'm, you know, I'm confident that if there is a change, it will have to be done at the lender and borrower level anyway. So I'm going to defer and say go back to your lender. If you want to be, I'll say, you know, extra cautious, you can see if the SBA has anything new published on that Treasury website. Like I said, I know that some new information came out this morning. Could be something out there.

Again, this is the ongoing vagueness with these programs, but at least important to know that it has been extended from 8 to 24 weeks. To find out, none of us right now know how to activate that or if it's automatic, but at least talk to your lender about that. But that's a nice change going from 8 to 24 weeks.

What I'm not, and I'm not sure if the mechanics just like, the mechanics of doing these loans is slightly different from lender to lender. I don't know if the mechanics of clicking in the added benefits will be different from lender to lender, so that's still unclear to me. Now what I have heard that I can't really back up, I've heard some lenders say that, well, we're bound by whatever the final rulings are by SBA regarding this program. That's what we're bound to, which would allude to it sort of grandfathering into these loans. But how you actually change your documentation with your bank is something that, um, that I, I'm still looking for confirmation on. And, uh, and again, that's why it's important to look at these rulings and check with your bank, because this stuff just changed. You know, we— our last final ruling was this was 8 weeks. So now we have another ruling that it's extended, so it's important to check on these things.

And the, the other thing, Dylan, I wanted to mention is in that press release, one of the other things it does is it reiterates that the new rules confirm that June 30th, 2020 remains the last date on which a PPP loan application can be approved. So for those folks who haven't applied You have a couple weeks. So again, time is of the essence, right?

Got it.

Yeah.

And so when this goes back to a question we've answered many times, but you know, in case there's any confusion on it, they said they have a small loan of $4,000, a PPP loan, was hoping to use the money only on paying rent for their showroom. Will that be forgiven, or do they have to use money for wages? So again, that goes to the, I think, the 60/40 rule, that 60 needs to be— 60% needs to be used for wages, 40% for other business-related expenses to those wages, like rent or utilities or transportation costs. But again, any of that, that is not used in accordance with the 60/40 will simply be converted to a 1% loan, which is a pretty cheap loan with 6 months deferment, and they get a year and a half to pay off that after that 6 months deferment. Is all that correct?

Yes.

Okay.

And when you think about it, I mean, even the change to 60% is an advantage, given the fact that if you don't meet the qualification, it's a 1% loan. So, you know, it's pretty low interest. So even at that, it's not a bad deal.

Almost free money.

Yeah. So the one thing that I wanted to add, and I want to get Terry's confirmation I'm understanding it right, that, you know, as much as Terry said you've got to apply for this PPP by the 30th of this month, one of the things that Terry mentioned was the other programs that have always existed: the 7(a) loan, the, uh, the 504 loan, which is really mostly for equipment property. That's what it's designed for. But as I understand, uh, there's also debt relief under those programs. So in other words, as what I It's how I understand it. If you get a 7(a), let's say that you missed the PPP window, uh, now what do I do? You could apply for a 7(a) loan or a 504 loan, and you're not going to get the same amount of forgiveness or relief, but there is, I believe, under the debt relief program, that SBA will pay the principal and interest on those payments for the first 6 payments. As long as you've gotten that loan by, I think, end of September. So is that correct, Terri?

Yeah, so again, if you go to our website, it will talk about SBA's other programs and the loan deferment periods. So I encourage you to go out and look at the— I'll say it— criteria for the debt relief, and that is at sba.gov and then funding programs. And it will talk about all of the deferments and the fees that SBA will pay.

Yeah, and I think it bears—

go ahead, I'm sorry, Ray.

Oh, I was going to say it also bears mentioning that, and this is an argument to hurry up and apply for PPP, is, you know, under these loans, the reason they're so popular in EIDL is that they don't have a collateral requirement. If you miss those windows and now you're looking at a traditional 7(a) loan, there is a collateral requirement under those. So, you know, so you have to be conscious of that. You know, it becomes a more of a standard loan that we're used to. But the other thing I'll mention too is Terri mentioned export loans, and I know most of our audience who's in retail is, you know, you're import heavy if you're if you're in that space, but we do have some retailers who are exporters. For exporters, that loan guarantee amount goes up to 90%, and there's still that debt relief component if you do it by September 30th.

Actually, Ray, the date is September 27th.

Oh, 27th, okay.

Sorry, those couple days can make a difference though.

I guess. Why 27th? I'm not sure, but hey, it's the 27th.

Regarding the federal contracting work, do all goods need to be manufactured in the US?

So the answer to that is, if you do something to convert— so if it's manufactured someplace else, there is a component that you have to do something. So you can't just warehouse it and then sell it. I encourage you to become acquainted with the Code of Federal Regulations because it will very articulately explain to you what the requirements are. So it's the 13th chapter of the CFR. And it's electronic. It's free. Just do a keyword search, and it will explain exactly what's required. And the nice thing about the CFR, for those of you who haven't spent your time reading it— it's like reading a dictionary— is it's in question and answer format. So it's really easy to understand. So it'll ask a question, probably your question, and then it will very articulately answer.

Great.

But again, those programs are not just for manufacturers.

No.

Where can they find the different categories that are covered? What URL should they go to?

The NAICS sectors? So just go to sba.gov, and if you put in NAICS in the keyword search, it will pop it up. If you're looking for the ones that are under the Women-Owned Small Business Program, Put in WOSB NAICS and it should pop up for you. I don't know if I have it open. If I do— so for the Women-Owned Program, it's under NAICS-WOMEN-OWNED. So you should be able to just put in those two keyword searches. I have the whole URL. I can paste it if you'd like for the Women's Program into the chat.

Yeah, that'd be great. So what—

for—

would I— NCIS, is that you said I would go to?

NAICS. Here. I'll put it— NAICS. It's in the chat, and it stands for North American Industry Classification System.

Okay, great.

And also, too, as a Small Business Development Center, if you're one of our clients, we can help you navigate through that. We've helped a lot of clients navigate through that. And, and, you know, one of the things that's interesting— this is very preliminary, but I'm involved in an economic survey and, and we were asking our SBDC clients throughout the LA network, Ventura, Santa Barbara, and then we did San Diego, Imperial Counties, about 2,800 respondents, and we're working throughout the state and gathering this information. But one of the interesting things that came out of our survey is a lot of the companies that employ employed some kind of innovation tactic, new product, new service, new business model, those companies tended to have an increase in sales even through the COVID crisis. And it was kind of barrier-specific, but it just reinforces how important it is to reexamine your business model make some of these pivots. And we've had some clients get really creative with it. And we have had some import clients that actually were able to pivot and do some government contracting work. I had some clients do PPE. They sort of switched. I have a few clients cutting and sewing, and then they switched to some different models to meet the demand. I've even had restaurants that were able to access different government contracts and kind of pivot and fill in, you know, where demand was lacking. So there are different options there. Again, with the PPP though, you know, what's interesting is we've put this huge staff, support staff, together throughout the SBDC network to help clients with that, and we've actually seen a slowdown in the applications. And the money's out there. So, you know, so again, I would encourage, you know, clients to, you know, work with us, reach out to their banks. We've actually had some pretty good luck with some of the virtual lenders. The PayPal, we've had some pretty good luck with. The other thing I wanted to mention real quick Terry mentioned CDFIs, there's PPP money going to them. You can look— Terry, how do they look up the CDFI that would lend under PPP?

Probably the best way is just to do a Google search to find the one by county. So if you just put in like the county that you reside in and CDFI, and it stands for Certified Development Financial Institutions, you should find a list or use the lender finder. I just actually posted it in the chat, and unfortunately what I did is I posted it just to panelists, so let me change it to everyone.

I changed it to— I reposted it for you.

Okay, perfect. Thank you, Dylan. So just use that lender finder, and again, they should show up on the list of PPP lenders.

Now, the only word of caution is CDFIs are community lenders, And so, by that very definition, they don't have huge pools of money. You know, they have pools of money probably in the millions, not tens of millions. But there's a lot of them. So I would encourage our panelists to, you know, the expectation is those are probably smaller amounts. But I would, you know, if your request is a fairly small amount, in the $100,000 range rather than, you know, million-dollar range, it would be good to look for these CDFIs. So for example, I believe the CDFI in downtown LA is Pacific Coast Regional. They're also an SBDC and they're also a CDFI. So I don't know to what extent they're doing PPP, but those are the types of entities that you would look for.

The other thing I wanted to add on to what Ray said is, you know, as we emerge from COVID and PPP and EIDL go away, the other thing, if you're, you know, a small business and your capital needs are $50,000 or less, SBA also has a micro-lending program. So that's something else to consider that's outside of PPP and EIDL. That's one of our programs that's in full effect pre-COVID, post-COVID. And just being acquainted with some of those other options are important because once the PPP goes away, you're going to have to explore other ways to find capital. And by even working with the Small Business Development Centers, they have financial consultants who are very well versed in funding sources outside of federal as well. So if there are state programs, those are other opportunities that you might be able to leverage that SBA might not have direct knowledge of, but certainly our partners do.

Got it. And the other, the other thing, Dylan, I think— oh, sorry. The other thing I think is critical about searching out and finding out who your local CDFI is, a lot of those CDFIs are also administering grant programs as well. So there's a lot of cities that are setting up grant programs. They're not huge amounts, but again, they're grants. And that's unusual in the business world, but a lot of those CDFIs are being looked to by local municipalities to administer their grant programs. So that's another good reason to search those out. You know, if you can get another $5,000 or $10,000 through a grant program that's at a local CDFI, there's ways of kind of doing a mosaic approach to getting the funds that you need. So, you know, it doesn't do any harm to seek out who those local community lenders are.

Great points. And I'll just say, for— person has asked 2 more questions, so we'll leave it at these 2 more. I know you guys have done a wonderful job thus far. I don't want to take up too much more of your time. It's already been an hour. But they asked, for the 60/40, do you use the amount from PPP originally given, or do You add the advance amount received to it. An example, she received 20— I think she's being 20% PPP and 3 advanced. Is my 60% based on 20 or 23? So I guess, you know, the question is about allocation and do you add the advance amount to it?

So for that question, since it's so specific, can you send it to LADO@sba.gov? Because I don't I want to give you bad information. So if I see it in writing, I can make sure that it's answered properly. So send it to LADO@sba.gov. My name is Terri, and just put Terri in the subject line, and then they'll know to send it over to me and I'll get you an answer.

Can you put that in the chat really quick?

I sure can.

Thank you very much.

Also too, I'm not aware, unless this is a bank-specific thing, of an advance under PPP. Usually we talk advance under the EIDL loan program. And yeah, so I'm a little, I'm a little confused there, so it's, it's good that we follow up. I would also put out to our audience that if you have an EIDL loan and you don't know the status of that EIDL loan, I know SBA is working very hard to try to follow up on that. As SBDCs, we're trying to support SBA in trying to follow up with the status of those loans. So we have quite a few clients coming to us, you know, with assistance in that area, and SBA has been really very responsive considering, you know, the backup that they have. So we're trying to aid in that follow-up as well.

And then I just shared in the chat, Dylan and Ray, For the EIDL loan, you can reach out to disastercustomerservice@sba.gov, or you can call them at that 1-800 number. I encourage you, if you're on the West Coast, take advantage of the time zone. Sometimes the call volume is a little lower later in the afternoon. And then the other thing is, if you can't get through, or perhaps you've received something on your EIDL loan and you don't understand, if you're in our 3-county district, reach out to us. If you're in a different district, reach out to your district office. And hopefully they can assist you. And then for our office particularly, we're trying to get clarity for any borrower who was, you know, received a letter and they're uncertain what it means, or they don't understand if they were denied why. So reach out to us and we'll be happy to try to help you.

Great, perfect. Well, thank you so much, guys. And to, you know, all attendees, we're going to be sending a follow-up email try to get that out this afternoon or tomorrow morning, and that'll have Ray's information, Terry's information, this presentation recorded in YouTube, a slideshow, and then also a blog that we're writing later today based on all this information as well. So a lot of good information there. Look for that email that'll say follow-up email. We're also going to send out in an hour or two an email with a free link to the SureFront Virtual Showroom app. So that allows you to display your wares and sell your wares virtually in case your showroom is still shut down or your buyers cannot travel to your showroom. So look for that one. That's for webinar attendees only. So use that link. We were able to send out about 5 signups every single email. So, you know, please look out for that one. Terry, thank you so much. Really, really appreciate you taking the time out of your day. Ray, thank you as well again. I think this is your 4th webinar with us, so thank you so much for continuing to come on these. You're always fantastic. Thank you to both of you. I know this is very, very helpful information. So appreciate it, and everybody look out for those follow-up emails. Thank you so much.

Thank you. Thank you, small businesses.

Hang in there.

Thank you.

Okay, bye now.