FAQ for SBA loans and the CARES Act

The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program, the initiative provides 100% federally guaranteed loans to small businesses.

Importantly, these loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward.

The administration soon will release more details including the list of lenders offering loans under the program. In the meantime, the U.S. Chamber of Commerce has issued this guide to help small businesses and self-employed individuals prepare to file for a loan.

Download the Guide and Checklist here.

Dewey Bartlett Jr.: Need for strong, visionary leadership for today and tomorrow

In the OEPA tradition of leadership in our state our Chairman, Dewey Bartlett offers leadership and vision to our state; beyond the oil and gas industry.

There are several decisions the leaders of our city, county, state and federal governments must make now in order for us to judge their effectiveness as elected leaders. It is not a time to hear about their feelings and shed tears; we all know about difficulties. It is time for them to lead, not only for today, but for our future well-being. Our leaders need to show more than strength in the midst of what is right in front of us. We also need them to have vision beyond this crisis so that our future is secure and prosperous.

Every city in Oklahoma will soon experience a major hit to their only source of operating revenue — sales taxes. Our leaders can do several things. The state government can pass legislation allowing each city to vote to allow property taxation to pay for operational needs. Unless that happens, every municipality will be laying off public employees.

Read More.

Paycheck Protection Program

Under the CARES Act, the Small Business Administration is offering The Paycheck Protection Program. The program is offering small loans on favorable terms for payroll necessities. It is intended to: 1) help small businesses cover their near-term operating expenses during the worst of the crisis, and 2) provide a strong incentive for employers to retain their employees.
Click here for more information on the Paycheck Protection Program.

Investigating economic warfare actions by Saudi Arabia and Russia

Six U.S. Senators submitted a letter to The Honorable Mike Pompeo at the Secretary of State, asking him to begin investigating economic warfare actions by Saudi Arabia and Russia against the United States. This action is a critical step in restoring our nation’s oil prices to a stable level. The six senators were Sen. Kevin Cramer (R-ND), Sen. Lisa Murkowski (R-AK), Sen. Dan Sullivan (R-AK), Sen. James Inhofe (R-OK), Sen. John Hoeven (R-ND), Sen. Cindy Hyde-Smith (R-MS). You can view the entire letter here.

Summary of the Coronavirus Aid, Relief and Economic Security (CARES) Act (Senate Substitute Amendment to H.R. 748)

After countless hours of negotiation between Congressional leaders and the White House, a final deal on the third coronavirus-related bill was reached and approved by the Senate just before midnight on March 25, 2020. The Senate approved the measure with a vote of 96-0; and the House is expected to pass the bill on Friday. The nearly $2 trillion stimulus measure – the Coronavirus Aid, Relief and Economic Security (CARES) Act has relief for both the private and public sector, as well as individual Americans. Below is a summary of the CARES Act1, beginning with emergency appropriations for the various federal agencies.

Emergency Appropriations for Coronavirus Health Response and Agency Operations

The grant and loan funds contained within the CARES Act universally may be used “to prevent, prepare for, and respond to coronavirus.”

To see an overview report of the entire bill, click here. OEPA will be reviewing the CARES act and will soon release information focused on small business provisions.

SBA Disaster Loan Program

This information is correct as of 3/23/2020

Anyone interested in applying for this program will apply directly with the SBA. This loan program is NOT being funneled through Banks like the typical SBA 7A or SBA 504 loan programs are.

Click here for the SBA Disaster Loan Program.

Click here to download the presentation from SBA representatives that explains the program and provides some guidance on how to apply. Click here for a quick 3-step overview of the process.

Below is a list of required documents that SBA will ask to be provided with your application for the Disaster Loan Program.

Required Documentation

The following documents are required to process an SBA Disaster Loan Application and reach a loan decision. Your SBA Loan Officer and Case Manager will assist you to ensure that you submit the proper documentation. Approval decision and disbursement of loan funds is dependent on receipt of your documentation.

Businesses

  1. Business Loan Application (SBA Form 5) completed and signed by business applicant.
  2. IRS Form 4506-T completed and signed by Applicant business, each principal owning 20% or more of the applicant business, each general partner or managing member and, for any owner who has more than a 50% ownership in an affiliate business. (Affiliates include business parent, subsidiaries, and/or businesses with common ownership or management).
  3. Complete copies, including all schedules, of the most recent Federal income tax returns for the applicant business; an explanation if not available.
  4. Personal Financial Statement (SBA Form 413) completed, signed and dated by the applicant (if a sole proprietorship), each principal owning 20% or more of the applicant business, each general partner or managing member.
  5. Schedule of Liabilities listing all fixed debts (SBA Form 2202 may be used).
  6. Complete copies, including all schedules, of the most recent Federal income tax returns for each principal owning 20% or more of the applicant business, each general partner or managing member, and each affiliate when any owner has more than a 50% ownership in the affiliate business. Affiliates include, but are not limited to, business parents, subsidiaries, and/or other businesses with common ownership or management.
  7. If the most recent Federal income tax return has not been filed, a year-end profit and loss statement and balance sheet for that tax year is acceptable.
  8. A current year-to-date profit and loss statement (typically within 90 days)
  9. Additional Filing Requirements (SBA Form 1368) providing monthly sales figures.

Congress Reaches Agreement On A Coronavirus Relief Package: Tax Aspects Of The CARES Act

Tony Nitti | Forbes

A nation desperate for any reason for optimism got just that on Wednesday evening, with word that Congress had finally agreed upon a stimulus package designed to reverse the devastating impact of the COVID-19 pandemic. The Senate overwhelmingly passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and the House is set to do the same on Friday, paving the way for the President to sign the bill into law.

In addition to providing a large cash infusion to hospitals and broader access to COVID-19 testing to individuals, the CARES Act aims to boost the economy with over $2 trillion in relief, ranging from individual rebates and small business loans to increased unemployment benefits and a wide variety of tax breaks.

In this space, we focus primarily on the tax aspects of legislation — and we’ll certainly do so here — but we’d be remiss if we didn’t first address, in more general terms, the most immediate forms of relief provided by the CARES Act: the individual stimulus payments and small business loan provisions.

Small Business Loans

In a move designed to keep small businesses afloat, the CARES Act provides that businesses with fewer than 500 employees — including sole proprietors and nonprofits— will have access to nearly $350 billion in loans under Section 7 of the Small Business Act during the “covered period,” which runs from February 15, 2020 through June 30, 2020. The loans, which are referred to as “paycheck protection loans” and are fully guaranteed by the federal government through December 31, 2020 (returning to an 85% guarantee for loans greater than $150,000 after that date), are generally limited to the LESSER OF:

  • the sum of 1) average monthly “payroll costs” for the 1 year period ending on the date the loan was made (an alternative calculation is available for seasonal employers) multiplied by 2.5, and 2) any disaster loan (discussed below) taken out after January 31, 2020 that has been refinanced into a paycheck protection loan, and
  • $10 million.

Payroll costs, in turn, are the sum of the following:

  • wages, commissions, salary, or similar compensation to an employee or independent contractor,
  • payment of a cash tip or equivalent,
  • payment for vacation, parental, family, medical or sick leave,
  • allowance for dismissal or separation,
  • payment for group health care benefits, including premiums,
  • payment of any retirement benefits, and
  • payment of state or local tax assessed on the compensation of employees,

Payroll costs do not include, however:

  • the compensation of any individual employee in excess of an annual salary of $100,000,
  • payroll taxes,
  • any compensation of an employee whose principal place of residence is outside the U.S., or
  • any qualified sick leave or family medical leave for which a credit is allowed under the new Coronavirus Relief Act passed last week.

Example. Rob’s Car Wash applies for a paycheck protection loan on May 1, 2020. The business had $1.2 million in payroll costs for the period May 1, 2019 through May 1, 2020, for a monthly average of $100,000. Rob’s Car Wash is entitled to a fully guaranteed federal loan —assuming it’s made before December 31, 2020 — equal to the LESSER OF:

  • $250,0000 ($100,000 in average payroll costs * 2.5), or
  • $10 million.

The loans will have a maximum maturity of 10 years and an interest rate not to exceed 4%. Proceeds may be used to cover payroll, mortgage payments, rent, utilities, and any other debt service requirements. The standard fees imposed under Section 7 of the Small Business Act are waived, and no personal guarantee is required by the business owner.

An additional provision in the CARES Act provides for possible deferment of repayment of the loans for a period of at least six months, but not to exceed a year.

Read More.

Investigation Anti-dumping from Saudi Arabia & Russia

Senator Inhofe has submitted a letter to the Department of Commerce, signed by nine other oil and gas state U.S. Senators asking them to begin investigating anti-dumping actions against Saudi Arabia and Russia. Senator Inhofe was joined by Sen. Roger Wicker (R-MS), Sen. Kevin Cramer (R-ND), Sen. Lisa Murkowski (R-AK), Sen. Mike Rounds (R-SD), Sen. John Barrasso (R-WY), Sen. James Lankford (R-OK), Sen. John Hoeven (R-ND), and Sen. Dan Sullivan (R-AK). View the letter here.

We’re proud that both Oklahoma Senators have signed this letter.

Energy Sector Considered Essential Critical Infrastructure

Click HERE to read the letter from the U.S. Department of Homeland Security Cybersecurity & Infrastructure Security Agency (CISA) which has deemed U.S. oil and gas production as essential.

SBA Economic Injury Disaster Loans

The (SBA) U.S. Small Business Administration approved Governor Stitt’s request for low-interest federal disaster loans across all 77 counties of Oklahoma. These are offered to small businesses suffering economically as a result of COVID-19 and because of the Saudi Arabia – Russia issue. The loans are designated for working capital and can provide up to 2 million dollars for fixed debts, payroll, accounts payable and other bills that cannot be paid due to this disaster. To apply for these loans, please visit this website.