SBA Disaster Loan Updates

Check out our YouTube channel for the most up-to-date findings of how SBA is managing the EIDL program.

Frustrated with being declined? Visit our Road Map to Reconsideration page. Our How To, Step by Step guidebook on how to navigate the disaster of disaster financing. Our mission is to take your mind off the minutia and get back to business.

May 6, 2021

Real Example of a Borrower experiencing the EIDL Increase approval process:

SBA sent an email to login to the portal to adjust the loan amount. After several or more emails with no resolution about the blue button and unable to edit amount, she got a voicemail from an SBA loan officer (LO). No detailed message, but just a name & phone number with an extension. She called, was transferred but had to leave a message requesting a call back.

Here’s what happened next:

The LO called her back, and they spoke for a while which included confirming everything we predicted here at Aurora Consulting:

Don’t worry about the blue button; if you emailed in your request, they have the info
Don’t stress about it anymore; they have your info and will follow up.
Loan officer offered the max amount but…confirmed that if the loan is over 25,000, they’ll need hazard insurance or homeowners insurance policy & collateral.

LO said that this was the final step and the loan was ready for approval. No additional lightening round of documents required (in this particular scenario).

The borrower then asked the LO to clarify if she accepts a lesser amount, will there be more back and forth or another review to approve the lower amount. The loan officer assured her that whatever amount she accepts will be approved, at this stage.

Next, the borrower asked if this will be a separate payment amount or will it be bundled with the original EIDL from last year. The loan officer confirmed that the loans are combined for one payment.

The borrower then asked if the loan officer could explain why she was denied the Targeted Grant. The LO explained that if you move and change your address information, it basically kicks you out from being eligible.

Evidently, SBA doesn’t like it if you move. The borrower explained that she didn’t have a choice due to the financial burden. Borrower asked why does it show now that I am not in a low income area, but I’m still actually in a low income area?

The entire area is considered low income. She says she doesn’t know why but others have said the same thing about the mapping tool when they are denied… But recommends requesting for a reconsideration.

May 3

We came across emails from one of our clients from April and May 2020, in the heat of the early days of the COVID-19 disaster. He owns a convenience store near Boston. There were more than a few emails from him asking basically EXACTLY the same question(s) everyone is asking, which, essentially boils down to, “WHEN?”

By the end of May and early June of 2020, he received both his original EIDL and first PPP that we filed for him, and the EIDL was considerably more than he expected. He’s still a client and slightly more patient this year.

You’re not alone in your anxiety and distress; there are millions of Small Business Owners who feel exactly as you do. As a veteran financing professional, we hope we can offer some small comfort by advising you to find control in the only thing you can control: your anxiety. Our recommendation to be able to exert control is to manage aspects of the process that you have direct control over. This includes preparing your documents in case SBA comes back to request additional documents.

And, in those stressful moments when you feel like you want to check that portal for the seventeenth time of the day, exert your control and find something else to do instead. Check your portal only once in the morning and once in the evening. we promise that these methods can be effective.

Remember, the SBA and the Federal Government have pulled off an incredible feat with the financial support provided from the early days of this mess.

We’re not defending the SBA in full force. We have seen massive malfunctions and wish Congress would issue a bigger budget to this government agency given the overwhelming responsibility they’ve been given to advocate and administer on behalf of the small business owner.

April 24

Too many Small Business Owners who are trying to keep their businesses alive during the pandemic believe that the vital EIDL Program administered by the Small Business Administration is a bureaucratic DEAD END. It must feel like getting a vaccine only to find out later the vaccine had expired and was useless.

More and more, it seems as though the SBA is a DECLINATION MACHINE. They decline loans instead of assisting the Small Business Owner to answer questions and untangle sometimes confusing aspects of the loan application process.

SBA’s modus operandi seems to go something like this:

“Mismatch business name with a web search? DECLINE.”
“Obviously incorrect Gross Revenue and Cost of Goods Sold? DECLINE.”
“Automated credit scoring says, ‘NO?’ DECLINE.”
“Business doesn’t have a website? DECLINE.”
“Didn’t answer a question on the EIDL questionnaire? DECLINE.”

In Trevor’s career as a Mortgage Banker, if he operated the way the SBA does, he would’ve found himself working at a Fast food joint flipping hamburgers. The application process is complicated (especially with SBA) and what the SBA SHOULD be doing is helping Small Business owners to correct mistakes on their applications, to clear up confusion about the difference between something like an LLC name and a DBA certificate, or, at the very LEAST, to explain the EXACT remedies the Applicant can take to correctly apply for the desperately-needed EIDL funds.

The results for many Small Business owners occur in two ways:

First, they don’t get the money.

Second, not being well-versed in the finer points of preparing and submitting an application, they think there is something terribly wrong with them and their business and that they are NOT WORTHY of being approved when all that really needs to be done is to clear up the confusion of the application process and present it to the SBA in a format that is acceptable for APPROVAL.

BTW, FYI, that’s what we do here at Aurora Consulting. We have no emotional attachment to the application process. We have an emotional attachment to our clients, working with dedication and passion to advocate for YOUR right to this vital Federal program that is funded by YOUR tax dollars.

March 24

SBA Press Release (Partial)

The U.S. Small Business Administration (SBA) is increasing the maximum amount small businesses and non-profit organizations can borrow through its COVID-19 Economic Injury Disaster Loan (EIDL) program.

Starting the week of April 6, 2021, SBA is raising the loan limit for the COVID-19 EIDL program from 6-months of economic injury and a maximum loan amount of $150,000 to up to 24-months of economic injury with a maximum loan amount of $500,000.

“…I’m proud to more than triple the amount of funding they can access ,” said SBA Administrator Isabella Casillas Guzman.

Businesses that received a loan under the current limits do not need to submit a request for an increase at this time. SBA will contact you directly via email and provide details about how businesses can request an increase closer to the April 6th implementation date.

Any new loan applications and any loans in process when the new loan limits are implemented will automatically be considered for loans covering 24 months of economic injury up to a maximum of $500,000.

March 13

Trevor has said time and again during everyone’s stress of the PPP since January:
“The money’s not running out and Congress will probably extend the program.”

We base our opinion on the fact that Trevor has 30+ years’ experience with Government loan programs and ONE YEAR with COVID Disaster Relief Financing programs working 7 days a week, living, breathing, eating and sleeping EIDL and PPP. (YES…he’s still locked in a room to complete PPP applications for our clients).

Now for the good news!

Here’s today’s news flash:
“Senior House and Senate lawmakers have reached an agreement to extend the Paycheck Protection Program for two months amid growing concern that the March 31 expiration of the landmark small-business rescue plan would deprive many employers of aid.”

I love it when Trevor’s right. Trevor loves when Trevor is right too. haha And/BUT we do have some legendary disagreements when he comes off with his arrogant, “old-guy-from-the-mortgage-business” opinions!! Hahahahaha

Now for the NO NEWS!

We’re working on ensure we deliver accurate information for our Restaurant clients so please hang tight.

March 12

SBA Extends Deferment Period for all COVID-19 EIDL and Other Disaster Loans until 2022.

WASHINGTON –The U.S. Small Business Administration announced extended deferment periods for all disaster loans, including the COVID-19 Economic Injury Disaster Loan (EIDL) program, until 2022.

All SBA disaster loans made in calendar year 2020, including COVID-19 EIDL, will have a first payment due date extended from 12-months to 24-months from the date of the note.
All SBA disaster loans made in calendar year 2021, including COVID-19 EIDL, will have a first payment due date extended from 12-months to 18-months from the date of the note.

The $1.9 Trillion COVID relief bill aka the American Rescue Act of 2021 was passed into law a day early on March 11th. BUT.NOT.SO.FAST!

Please know that the lending rules will need to be put into place before any actions are taken to resolve the egregiousness displayed by the SBA last year including but not limited to the EIDL Loan and Grants imposed by SBA without Congress approval.

If you rush into anything without rules being set, you will be faced with denials and delays. It’s been happening for a year. This will likely be no different.

We would be shocked if things got settled within the next few weeks to a month so sit tight otherwise you will have to redo it again anyway.

Play Video

March 2

PPP Schedule C Rules:

NO rules yet from SBA to guide Lenders on the new Schedule C calculation. As per President Biden’s announcement last week, SBA will change the way a Self-Employed Schedule C small business owner calculates their PPP Loan Amount by using GROSS income instead of income after expenses.

But SBA has to create the underwriting rules and get it into the hands of Lenders to implement. Various Lender websites still show the net income requirement on their application for PPP loans. All this with the President’s additional proposal to give the smallest of small businesses (less than 20 employees) a 14 day special window to move to the head of the line by putting a moratorium on PPP lending to businesses with more than 20 employees. Time is running out SBA. Hello? SBA?

EIDL Targeted Advance:

SBA is struggling with this effort.
SBA has dropped the ball with targeted advances.

We’re hearing that Congressional offices have been flooded with calls from people who have been waiting 21-24 days for feedback from the SBA. The Second Stimulus Legislation provided that SBA must fund a Targeted EIDL Advance for Small Businesses in Low Income Communities within 21 days. If it has been 21 days or more since you submitted your application with no reply from SBA, you should consider contacting your Congressperson’s office.

March 1

We get a lot of clarifying questions about qualifying for loans and grants but not having 2019 tax returns prepared.

If you’re looking for an EIDL loan (filing reconsideration) or the Targeted EIDL grant, but your business hasn’t filed 2019 taxes, you could risk a declination.

March 1

What if your address appears at the wrong location on the SBA map? This is not a hypothetical situation! Far from it. We spoke with someone this morning who was in a panic state.

He plugged his in address to the SBA map found at sba.gov website. He has not yet received his invitation email for the targeted E IDL advance program. And so, he decided to take matters into his own hands. This is perfectly normal for any small business owner during these challenging times. It’s good to triple check to make sure that his business location is located within a low income community as defined by the SBA program.

What he discovered horrified him! When he entered his address into the search box on the SBA map, which is Manhattan, the map pin flag landed on the correct address but in Brooklyn NY.

Yes, there are two identical addresses in two different parts (boroughs) of New York City. This is not unusual around the United States, however imagine this person’s distress when he discovered that the map landed him on the wrong part of New York City with the correct address!

But wait it gets worse. The Brooklyn location is not in a low income community; but his business location in Manhattan is in a low income community. And so he’s terrified that he will not qualify for the Targeted EIDL Advance if the SBA is relying on this map with incorrect information.

We spoke with an SBA agent on his behalf, and her advice was to send an email to: TargetedAdvance@sba.gov explaining that the address is in the wrong location.

February 8

Did you receive an SBA EIDL loan but you find you need more money?

We have an exciting revelation for you after a conversation with a superb SBA Agent. According to this SBA Agent, SBA has recently opened the Reconsideration process to requests for additional funds.

As per the term of your EIDL Loan Authorization and Agreement, you may request additional money up to 24 months from the approval date. The Agent suggested including in your Reconsideration request a document where you provide your working capital needs for six months of operations.

We recommend you submit a simple, single-page letter including
Rent/Mortgage
Payroll
Operating Expenses
Marketing Expenses
Debt Servicing
Other

In BOLD, TOTAL your working capital needs

At the bottom of your letter, sign it and date it.

January 14

SBA Announced PPP Lending is opening to ALL Banks/Lenders on Tuesday, January 19 2021.

January 9, 2021

UPDATE from SBA about Second Round PPP Loans: “To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11,and Second Draw PPP Loans on Wednesday, January 13. The PPP will open to all participating lenders shortly thereafter.”

The objective of the first opening of PPP loans only to community banks is to provide FIRST access to undeserved communities.

Too many Black, Ethnic minority, and women-owned businesses were cut out of the first PPP loans.

This “first access” plan is a fair and just reaction on the part of our Congress to level the playing field to provide assistance to ALL Small Business Owners.

If you haven’t done so, be sure to subscribe to the email newsletter from your Regional/Local SBA office. Here’s what we found this morning:

Key PPP updates include:

PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;
PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, destination marketing organizations, among other types of organizations;
The PPP provides greater flexibility for seasonal employees;
Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.
A borrower is generally eligible for a Second Draw PPP Loan if the borrower:
Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
No more than 300 employees; and
Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

Online QUESTION:
“Has anyone requested EIDL increase, been approved, and received funds?”

Our Response:

We submitted our first request for a client earlier this week. While it’s not approved yet, we’re thrilled to report that SBA Reconsideration team responded very promptly by asking for an additional document (which we’d already provided in the original request…sigh…). The EIDL Loan Agreement allows a business borrower to request additional funds up to 24 months from date of original EIDL approval.

The question becomes: “How does SBA determine how much additional funds?” because the original EIDL program is for a natural disaster, and the business includes a dollar amount for “economic injury” on the application.

So, if the roof of your factory came off due to a tornado, and you suffered damage to equipment and inventory, you can know a dollar amount to request. And, later, if that’s not enough because the roof repair is more than originally estimated, then, again, you have a dollar amount to request additional funds. BUT…how does it work for the COVID-19 disaster?

Let’s hope we get some rational decision-making from SBA on helping Small Businesses get these additional funds. I will update here on the Group as we develop applications for Reconsiderations. Already we’ve had spectacular successes with overturning EIDL Declinations for application errors and credit issues.

January 8, 2021

Today’s quick updates, advice, and cajoling from us:

Organization is what it’s all about! We use a checklist with our clients so their files are organized in order to efficiently secure the funding you’re entitled to. EMAIL to request and we’ll get it right out to you.
MORE MONEY: We know how to get more money so our clients don’t have to think about it. Leave the MATH, the GUIDELINES, to us.
Your Focus, Our Focus: We are committed to ONE CONCEPT: supporting you to keep your business ALIVE through this mess. Please leave all the heavy lifting to us for your Disaster Loans. We’re laser-focused on that. Your Focus is on keeping your business ALIVE.
MORE MONEY PART TWO: With a new Government in Washington DC, you should expect more programs, expanded programs, and MORE MONEY. We monitor everything so our clients don’t have to.
Communication: EMAIL. Between calling SBA, processing your documents and files, uploading applications, EMAIL is the BEST form of communication.
Trevor’s Loan Philosophy: Trevor built his Mortgage Banking career on ONE concept: Government programs are designed to get you the MONEY. We believe the same is true with SBA programs. Don’t fret or overthink your qualifications, leave that to US. We believe that ALL applications should be submitted and processed. We call it “working the deal” so we can get you a RESULT which is this: MORE MONEY.

RESULTS ARE THE ONLY THING WORTH TALKING ABOUT.
Stay safe; stay well. Wear a mask; keep your distance.

January 3, 2021

As we await final rules from SBA for lending guidelines, here’s a summary of what our research indicates is the most likely approach to applying for Second PPP Loans:

Small businesses with 300 or fewer employees
Have spent or will spend the full amount of their original PPP loan
Can demonstrate a 25 percent revenue loss in any quarter of 2020 vs. the same quarter in 2019
Low-Income communities and underserved businesses are prioritized in Lending process

As soon as SBA creates final rules we’ll act promptly to complete client qualifications and submit applications on our clients’ behalf.

We’ve already lined up Lenders for our new PPP submissions.

Happy New Year from Aurora Consulting! Here’s to a better 2021 and please know we will continue to find all Disaster Financing to which our clients are entitled to receive.

January 2, 2021

Waiting…waiting…waiting…Nail-biting…Anxiety…Worry…Concern.

WAIT for the SBA RULES.

The WAIT will be worth it! We did this back in April. It’s happening again.

For our part, we will share accurate guidance as often as possible. We’re a Financing Broker. We’ve processed 50+ EIDL and PPP loans with spectacular success for our clients.

We’ll share that experience with you all.

December 27

We are excited about 2021. First, and foremost, 2020 will be OVER!

Secondly, there is still a lot of difficulty ahead, but at least there’s some hope on the horizon. Finally, the Second Stimulus program has been signed into law.

SBA has TEN DAYS to create the rule-making for new PPP loans and the extension of the EIDL program through the end of 2021.

At the encouragement of many of our satisfied clients, we’re increasing our fees for our popular and successful Disaster Relief Consulting Program.

We created our current fee of $750 back in March as we sought to assist you all to survive this pandemic with our knowledge and experience in financing. The SBA permits a fee of $2500 (and higher with SBA oversight).

As many of our clients have pointed out to us, the amount of work that goes in to processing these loans far exceeds the fee we’ve been charging.

EFFECTIVE JAN 7^th our Flat Fee will be $2000 for our Disaster Relief Consulting Program.

While we are working on a limited Holiday Schedule until that date, we will accept new clients for the program at the current $750 fee through JAN 7^th.

If you know of any Small Business Owners who need our assistance, we encourage you to encourage them to contact us this week. They can schedule a FREE 15 minute phone consultation through our website so they get a sense of their qualifications for the program. Here’s the link, please share it.

The new Stimulus Bill has many valuable features to make it easier to obtain assistance. Our Disaster Relief Financing Consulting Program includes filing your EIDL Application or Reconsideration request, and filing a PPP Application.

Our Flat Fee Disaster Relief Financing Consulting program includes the following:

Preparation and Submission of EIDL Application or Reconsideration request
Thorough Processing of EIDL application including submission of requested documents
Direct communication with SBA to follow up on your application
PPP Application submission and Lender selection for PPP under Second Stimulus package
Advice and follow-through post-closing on utilization of funds, document requirements and Borrower obligations

If you want to hear from some of our clients, several have posted on Google reviews.
Some have emailed us and we put their words here.

December 22

FINALLY. We’ve been studying the Second Stimulus Legislation.

PPP Loans, Second Round. Key Takeaways:

Eligibility requirements including reduction in revenue and flexibility in determining reduction
Staffing levels important, especially regarding Full Time versus Part Time and rehiring
Lenders can offer Second PPP to existing PPP Borrowers using same rules
It appears the Second “Draw” PPP requires less documentation than first round

YOUR PPP ACTION PLAN:

Please submit these documents:

ALL Quarterly IRS Form 940/941 for 2020 (Self-Employed does not apply)
Payroll report from your payroll provider (Self-Employed does not apply)
Email description of staffing levels: How many current
Revenue: YTD Income Statement broken down to Quarterly for 2019 and 2020
What is status of your first PPP loan: Did you use all the money? If NO, how much is remaining?

December 21

With Trevor’s 30 years experience as a Mortgage Banker, he’s used to zipping through dense Government regulations. We’ve sorted through the 5593 pages and somewhere around page 1994 through 2194 I found what we needed.

Here’s my quick takeaway with a cautionary codicil:

EIDL Grants: Yes, will be fully-funded retroactively. We might have to submit another request. Waiting for SBA guidance.
There might be a hitch to the Grants, though. There’s some confusion on my part in my reading of the bill where it appears a business might have to meet certain eligibility requirements. Or maybe not. Again, waiting for SBA guidance.
PPP Forgiveness: not taxable
EIDL loans, Grants and PPP loans: not included in income for taxation
Expenses you normally deduct, but that you used PPP money for, STILL DEDUCTIBLE
Yes, another round of PPP loans. Waiting for SBA guidance.

Notice I keep saying, “Waiting for SBA guidance.” Because:

First, Congress and Senate have to vote and PASS the Legislation (Headline at 8:08pm EST: “Congress RUSHES to pass legislation.”)
President has to sign it
SBA has to implement “rule-making” by taking the relevant sections of the Bill and fitting it into SBA guidelines (this was a big part of the confusion with first round PPP)

December 20

An accountant friend, who has several restaurant clients, inquired with us if there is any other financing available for restaurants given the circumstances.

Our response was:

The ONLY financing for restaurants is as follows:

SBA Economic Injury Disaster Loan (EIDL). Even if they got the loan they should request more money through the Reconsideration process. We offer a Consulting program for that. Current Flat Fee is $750.00 but we’re increasing that to $2000.00 in January. (SBA allows us to charge up to $2500 and the amount of work we put in far exceeds the current fee)
PPP Paycheck Protection Program SECOND STIMULUS. What it is we don’t know yet. Stay tuned for our updates. We automatically apply for PPP loans for any client that signs up for our EIDL Disaster Loan Consulting program.
SBA Express Loans. $100,000 Loan/Line Of Credit through a traditional Commercial Banker that we have a relationship with. CAUTION: Lenders are very wary of lending to hospitality/restaurant trade for obvious reasons: pandemic lockdowns. We offer a Consulting/Broker program for these loans/Lines of Credit.
Working Capital Cash Flow Financing. This type of financing is fast, easy to get based on bank statements showing cash flow but the terms are DISGUSTING. Only for the absolute worst, most desperate situations. The financing “Sharks” are circling in the water and offering these loans (and the MCA loans below) to desperate business owners. What we do is different. We monitor the use of the monies and look to refinance/eliminate this short-term, expensive, debt very quickly. The “Shark” lenders want the business owners on the hook to keep coming back for more.
Merchant Cash Advance (MCA). This financing is as horrible as the previous product but this one is based on credit card utilization. In this case, as with the previous product, Lender gets paid FIRST with automatic payments. This tends to leave the business owner with very little capital left over to survive. That’s how they get you on the hook to keep coming back for more money.

December 20

Washington D.C. could be hours away from approving the SECOND STIMULUS package!

Late last night, just before midnight, the final dispute over Federal Reserve options seems to have been resolved. We won’t get into the silliness (our opinion) of the entire proposal and the equal silliness of the apparent resolution which revolves around language in the legislation (as opposed to any meaningful changes).

We are constantly monitoring the developments and subsequent passage of the Legislation. We’ll read it and analyze it and apply it to find more Disaster Relief Financing assistance for each of our clients.

PPP FORGIVENESS: We offer a flat fee consulting program and we do ALL THE WORK. The Forgiveness is already complicated and promises to become more so with a new Stimulus Package—especially for recipients of the EIDL program.

If you haven’t yet signed up, please contact us by tomorrow. We’re closing our office to general operations from December 23rd through January 6th.

Between that, and attending to filing applications under the 2nd Stimulus, we want to have our lineup of PPP Forgiveness clients in place so we know how to apply the best methods under current and new regulations to maximize Forgiveness.

December 18

DC MUST PASS STIMULUS TODAY.

Here’s what’s at stake:

Amendment S4227
If it mas its way intact through the new stimulus, it instructs and funds the SBA to fully-fund all under-funded or never-funded EIDL Grants.

S4227 also instructs SBA to fully fund all businesses that SBA arbitrarily capped at $150,000 for the full amount of a qualified loan up to $2M.

December 17

NO STIMULUS. YET.

To quote the New York Times: “With Congress running out of time to cement a stimulus agreement and avoid a government shutdown on Friday, leaders remained optimistic that they would ultimately find a resolution, although their wrangling could bleed into the weekend.”

The latest shenanigans involved Republicans insisting on limiting the Federal Reserve’s ability to lend money to Small Businesses in the future. These FOOLS really DO NOT UNDERSTAND the dire needs of our nation, preferring to play politics instead.

Two other facts in today’s news these FOOLS choose to ignore as they focus on slimeball politics instead of real help to the Nation:

HEADLINE: Businesses are CLOSING and…
JOB Losses are MOUNTING (New Unemployment claims remain far above historical levels)

December 15

We replied on a thread on a Facebook disaster loan page. There’s a guy named Reginald who is awesome AND he works for SBA on the Reconsideration team!

He posted a list of ADDITIONAL items to include with a Reconsideration request.

Here’s our response:

“…honestly, the Reconsideration process (no reflection on you and your fellow front-line SBA Agents! We love you folks!), is so onerous, complicated and, frankly, ever-evolving, that it seems that approval is nearly impossible. We’re working on more than a dozen Reconsiderations at this point and NOT ONE request has come back asking those questions you pose, thus leaving me to feel discouraged that my clients’ files haven’t even been reviewed yet. I wish SBA Administration would get their act together and provide clarity, transparency, support and quality guidance to Business owners and to the SBA Agents like you who are working so hard to help during this unprecedented time. As a side comment, I’ve been reading SBA Congressional filings going back to 1953; sadly the SBA has a disastrous record of providing adequate support to small businesses during disasters. Reference GAO filings after Hurricane Katrina and Hurricane Irene for more information.”

December 10

IMPORTANT EIDL UPDATE: If you’re attempting to log-in to the SBA for your EIDL loan status. IF you’re “blocked”, use an “Incognito” private browsing window.

New SBA security protocol implemented today.

Based on our follow up with SBA today, it appears the “log jam” of Reconsideration files might be loosening! Two files for which there’s been no activity for MONTHS are suddenly very active in the Reconsideration system.

And a new Reconsideration request we submitted on Saturday has already had a credit report pulled. It’s good to see activity on the files.

Now to wait for the RESULTS!

December 3

We’re doing a “deep dive” and reading actual Congressional Acts and Amendments about SBA financing (to get a clear answer on utilization of EIDL funds).

For everyone who doesn’t get it that SBA is overwhelmed by the COVID-19 Disaster, here’s some insight in a report from the US GAO about SBA’s lapses and failures after Super Storm Sandy (remember THAT disaster?!?!):

“After Hurricane Sandy, SBA further enhanced its planning for disaster response, including processing of loan applications. In a 2014 report on the Disaster Loan Program, GAO found that while SBA encouraged electronic submissions of loan applications, SBA did not expect early receipt of a high volume of applications after Sandy and delayed increasing staffing. SBA also did not update key disaster planning documents to adjust for the effects of such a surge in future disasters. GAO recommended SBA revise its disaster planning documents to anticipate the potential impact of early application submissions on staffing and resources.”

Stimulus? No. Plenty of conversations in Washington D.C. apparently, but no true activity. Imagine the fire truck rolls up to your burning house and the firefighters stand around chatting about HOW TO put the fire out WHILE your house burns down. That’s the state of the economy right now while our elected officials twiddle their thumbs.

New York Times reports “The data also shows how inconsistently the S.B.A. disbursed money through the Economic Injury Disaster Loan, a still-running aid effort that offers companies and nonprofits low-interest loans directly from the government to help them rebuild their battered operations. The E.I.D.L. program (pronounced “idle”), is supposed to make loans of up to $2 million, but the S.B.A., concerned that it would run out of money, imposed various caps on the program, none of which were publicly disclosed to borrowers at the time.”

November 23

We’ve been diligently following up with SBA to get the status of our clients’ Reconsideration file. If you’ve not received any recent emails, the process continues without any other feedback/information from SBA.

We’ve recently been following several online forums about EIDL loans and we’re seeing that business owners all across the country are having exactly the same problems and frustrations with the Reconsideration process.

We know this information is not a small comfort for you as you wait for these monies. We are as frustrated as you are.

Know that we continue to follow up with SBA on a regular basis and whenever possible, interject ourselves into the process to move it along if possible. We appreciate your patience and we’re working hard to help you get the monies you deserve.

November 20

SBA Reconsiderations: MASSIVE frustrations with the process. We thank our clients for their incredible patience! We’re seeing that folks all across the country are having the same challenges with their Reconsideration requests. We’re stepping up our phone calls with SBA. Not sure that will move the process along any faster, but we’re certainly not letting up on our persistence to help our clients get the financing you need.

NEW STIMULUS PACKAGE RECONSIDERATIONS: In anticipation of a new stimulus package (HOPEFULLY SOON!), we’re reviewing client files to tighten up the documents needed IF and WHEN another Stimulus passes and we can submit a request for more monies.

We’ve processed a lot of EIDL Reconsiderations, so we’re pretty familiar with the often-odd list of documents SBA requests. That’s what we’re looking for in each of our client files so we can strike the moment there’s another Stimulus financing opportunity.

OTHER FINANCING PROGRAMS for the COVID-19 Disaster: While we have had limited success with Grants, we are still seeking out other opportunities for COVID-19 Disaster Financing.

Watch for an email update with programs that we believe might be useful. Our work on these additional applications is included in our original Disaster Relief Financing Consulting fee.

November 18

You should immediately print out the SBA Form 722 and post in a conspicuous location where all Employees can see it. If you don’t have employees today, you must post this in the future if you hire an employee(s).

As per the Loan Agreement: “If Borrower has or intends to have employees, Borrower will post SBA Form 722, Equal Opportunity poster, in Borrower’s place of business where it will be clearly visible to employees, applicants for employment, and the general public.”

If you use an outside Human Resources contractor to screen, interview, and/or hire Employees, the contractor must also post SBA Form 722 to protect your obligations under the terms of the EIDL Loan Agreement.

Watch for more updates here on our BLOG about important compliance terms for your EIDL loan.

November 14

CONNECTICUT CARES ACT Grants

We submitted several Connecticut CARES Act Grant applications for clients yesterday. The application is literally the worst application I’ve encountered in over 30 years of completing loan applications! For example, the PPP Loan, otherwise known as the PAYCHECK Protection Program loan is described as the PAYBACK Protection Program. Seriously! You can’t make this stuff up! In our opinion, this application is a lot of work for a very small amount of money ($5,000) with no guarantee of success.

And that has been our experience with pretty much all grants we’ve applied for on behalf of our clients since March. You’d think they want to get this money into your hands they’d make it easier to do considering the epic dimensions of this disaster!

STIMULUS

In other news, there are murmurings and grumblings happening in Washington post-election about the next STIMULUS package. We’re in tune to the latest developments and we will act promptly once the next package becomes law.

MORE EIDL MONEY

We’ve discussed Amendment S4227 at great length before, but it bears repeating this Amendment, if it remains intact in the next Stimulus package, will accomplish the following:

ALL EIDL Grants will be fully funded retroactive to MARCH 16 2020. If you didn’t receive an EIDL Grant or received a partial, you’ll get the money.
ALL EIDL loans that were artificially capped by SBA at $150,000 will be fully-funded up to $2M for the amount your business qualifies for.

We have submitted Reconsideration requests for most all our clients to advise SBA about the defective aspects of their applications (Insufficient Grant and/or loan). IF S4227 makes its way intact through to law, we will act promptly to follow SBA Guidance (assuming there is some) to get you the money you need.

UPDATING YOUR FILES

In coming weeks we will request additional documents for your files based on our experience with SBA Reconsiderations. Please submit the requested documents promptly so we have everything we need to get you everything you need!

November 3

We’re noticing that SBA processing staff is sending emails out requesting further documentation for your already funded Economic Injury Disaster Loan (EIDL).

These requests pertain to required documentation as per your Loan Agreement. In one case, the requested document didn’t apply to the business at all. We responded promptly to resolve the matter.

In another instance, a client received a formal amendment to the Loan Agreement removing the collateral requirement.

All of our clients know that with all SBA communications, they forward the correspondence immediately. We respond directly to the SBA on our clients’ behalf or provide them with accurate guidance on how to respond.

October 29

We anticipated early on as we processed applications for PPP loans that the Forgiveness process could potentially be even more complicated. After all, what lender anywhere wants to forgive a loan? The best way to stifle a forgiveness request is to make the process complicated, onerous, filled with obstacles.

I’m typing this email while attending the third of many PPP Forgiveness webinars to best educate ourselves to best help our clients.

Key takeaways on Forgiveness so far:

Don’t be misled that the “EZ” or “Simplified” applications are one and done. As with every aspect of Forgiveness, there are nuances to be aware of making these applications potentially complicated, not simple or “easy.”
Definitions of Full Time Employees (FTE) is very complicated. Both in terms of current and pre-pandemic staffing levels and defining an employee by number of hours worked
If your entire PPP Loan is forgiven, you’ll have to pay back the EIDL GRANT you received. Yes, you read that correctly.
Timeline: anticipate long timelines, maybe 5 months, maybe as long as six years. Yes, you read that correctly.
File now? File later? We’re seeing lots of YouTube experts telling business owners to wait. It’s not that simple. Depending on your situation, it might be smart for you to file now.
Document, Document, Document. This has been my rule of thumb for my entire career in finance. Supporting documentation is what it’s all about.
Payroll Companies use “automated” processes to file your Forgiveness request. While that’s good for getting a payroll report, that’s not good for getting maximum Forgiveness. There are too many “gray areas” that can be used to maximize your Forgiveness. In other words, why would you let the Tire Shop install a transmission in your car?

On October 15^th we introduced our PPP Forgiveness Consulting Service. We’ll do all the heavy lifting for you to collect and organize documents, apply for Forgiveness, manage communications with your Bank and SBA, and negotiate longer payment terms for “unforgiven” loan amounts. Contact us today to discuss how we can help you with your PPP Forgiveness request.

October 27

We want to update you on a couple of general issues:

GRANTS. We’re seeing some States are now offering (or soon to offer) limited amount Grants under their allocations from the CARES Act. We’ve already spoken to clients today in CT and MA. If you receive an email in your State, please forward to me for review to determine your eligibility. Our experience with Grants hasn’t been the most encouraging. We find they are very difficult to obtain due to onerous qualification criteria. That having been said, we’re always seeking to find more money for our clients to support you during the COVID-19 Pandemic.
OTHER EIDL LOANS. If there is a “declared” natural disaster in your town, city, county, State, then you may qualify and apply for a SECOND EIDL LOAN. This application is more complicated than the COVID-19 EIDL in that it requires you demonstrate the dollar amount of your “economic injury.” The application also requires full documentation: tax returns and financials and etc. We’re always checking the SBA website on your behalf to determine if you’ve an opportunity to apply for another loan.
EIDL RECONSIDERATIONS. We’re working on about a dozen of these at the moment. We’re seeing lots of confusing and slow responses from SBA. Our guess is they’re overwhelmed (again) by the demand for Reconsiderations. You can request a Reconsideration if you were declined for a loan or if you made a critical error in the original application that got you less money than you’d qualify for.
PPP FORGIVENESS. On October 15^th we implemented our PPP Forgiveness Consulting Service. We manage all aspects of the Forgiveness process to maximize your request. We’ve had many of you responding to this service. If you’re interested, please contact us at any time.
NEXT ROUND OF STIMULUS. This is MY personal opinion, but I feel confident there will be a second round of stimulus within a few weeks of Election Day. Hang in there and know that we will jump on any opportunity to find more stimulus money on your behalf.

October 21

SBA EIDL Reconsideration:

SBA has updated their portal for business owners to upload required documents directly to the SBA to meet requirements for reconsideration of their DECLINED EIDL LOAN.

THIS IS GREAT NEWS (so far).

READ UPDATE HERE for when you’re filing for a reconsideration.

July 21

As of today Aurora Consulting has obtained SBA Disaster Relief Funded loans for our clients (PPP and EIDL, excluding Grants) in the amount $2,200,738.45!!!!

Thank you to those who put their trust, faith and patience in Linda Rey and Trevor. It has been our pleasure to serve in this way! More to come!

SBA EIDL Reconsideration:

We submitted Reconsideration Requests to SBA for our clients to request the full $10,000 Grant and/or to request more than the arbitrary $150,000 loan amount. We received our first SBA response yesterday, to which we are replying. BUT…now finally, after four months, SBA becomes transparent and announces that they had only been allocated $20B for EIDL Grants and they have now run out of the money.

When PPP came out, it was clearly stated by Congress and SBA the program was a “First come, first served” basis. (This added to the chaotic roll out of PPP as business rushed to apply, even when Banks and Lenders had o clear guidance from SBA)

BUT NEVER did SBA or Congress state the EIDL Grants were “first come…”

The CARES Act introduced the Grant to the long-established EIDL program.

Nowhere did SBA state there was limited funding on the Grant. More to the point, as with all Federal Agencies, if the SBA was running out of money, all they needed to do was to request it from Congress. SBA never did that. Can you imagine if the Navy ran out of money to feed the Sailors? What would they do…cut the rations, let the sailors starve? No! The Navy would go to Congress for more money. Same concept with SBA.

We continue to argue with SBA for our clients who are entitled to the FULL Grant (or the GRANT for those who did not receive it).

We’re also preparing letter templates for our clients to sign and to send to their respective Congressperson and Senator.

YOU ARE ENTITLED TO THIS MONEY UNDER THE CARES ACT and Aurora Consulting will continue to fight and advise on your behalf to obtain this vital benefit.

PPP Update: Reviewing the dozens of conversations we’ve had with our clients and prospective clients, we are reminded time and again how the Banks made so many mistakes with the PPP Loan process, but especially with the calculations of the correct PPP loan. Today, we discovered that a client for whom we did the calculations and prepared the application so she could submit to her own bank by herself had the bank cut her loan amount by more than 30%!

We discovered another client was told their business did not qualify because they didn’t have employees. EXCEPT…that business files as a Sole Proprietor on Schedule C, a feature that DEFINITELY QUALIFIES that business for PPP funding. What an absolute disaster.

Trevor made a 30 year career as a Mortgage Banker approving mortgage loans when Banks said “NO!”

Please apply this logic to your consideration about applying for PPP Forgiveness. If you wish to deal directly with the bank, you will have the same issues of chaos, misinformation, and reduced dollar values. That’s why Aurora Consulting will be offering our PPP Forgiveness service.

We kept moving the date back due to the ever-changing landscape around PPP and forgiveness. Then Trevor was ill. Once we’re caught up this week, we will present our PPP Forgiveness service for your consideration.

The fee will be a total of $900 with $600 paid upfront and the balance due once forgiveness is achieved. We will include the feature of renegotiating your loan terms from 2 years to 5 years with our program.

Our goal is to achieve maximum forgiveness amounts for your business and to extend your payment period to 5 years.

Thanks again for your trust and support!

June 11: PPP Forgiveness

The deadline to begin asking for #PPPForgiveness has been extended to 24 weeks from the original 8 weeks. This means you do not need to panic to get your “ducks in a row” for the Forgiveness application.

We attended an excellent Webinar this morning about the PPP Forgiveness process.

Two important takeaways:

1. Determine your objectives before proceeding with a Forgiveness request. Maybe the PPP funds are better used to ensure your working capital requirements in a way that don’t match the Forgiveness requirements.

2. And, with the new CARES Act revisions launched today, we’re seeing the ever-evolving regulations in real time. We’re doing our best to stay well-informed so we can advise you all on the best course of action.

As we’ve said from the beginning: Ever-Evolving.

#EIDL: SBA is still processing loans! We got a an excellent result for one of our clients this week. Their application hit a serious roadblock and was dead.

We spoke to SBA, resubmitted a reconsideration request, followed up with multiple calls to ensure the file was back in the queue. Lo & behold, our client received the $10k #EIDL Grant this week!

Proof positive of our oft-repeated advice to have patience and trust the process.

EIDL APPLICATIONS: SBA website still says “agriculture” businesses only.

June 3: PPP Flexibility Act (PPPFA)

On June 5, 2020, President Trump signed into law the Paycheck Protection Program Flexibility Act (PPPFA) to address concerns expressed by the small business community around the Paycheck Protection Program (PPP) aimed at providing COVID-19 relief.

You can see our outline here to compare PPP & PPPFA.

April 29: Ever Devolving?

Yesterday, we thanked our clients for their continued patience and endurance with this insane, chaotic, ever-evolving (devolving?) financing disaster.

And a disaster it is. The news reports that large banks are providing concierge services to wealthy business clients, that PPP monies are going to large corporations that don’t need the money, that are publicly-traded, that are in trouble with the government, or that report healthy financials during the crisis.

Then there’s the SBA. Pent up demand for PPP applications crashed the SBA system this week for the second round of financing.

Then there’s the SBA’s constant rule-changing. Most often these rule changes impact the smaller businesses who either don’t have the immediate access to the documents or have unique situations that prevent them from responding to the documents requests.

For our part, we keep taking the hits and we keep standing up to advocate for our wonderful clients. We’re doing everything possible to help them, against daunting odds.

Results for all of our clients, both on EIDL and PPP are all over the place. Some clients get approvals, some have no response; some clients get EIDL grants, but no emails, others get the grant and the EIDL loan. People who applied for PPP on their own got no results or responses, some others did.

EIDL: We believe the EIDL loan is the best solution for most of our clients. The terms of this loan, should you be approved, is, in our opinion, much more reasonable than the PPP loan.

Even though SBA received $60BIL specifically dedicated to EIDL in the second round of stimulus, the SBA website as of 12 Noon EST today reads:
“Notice: Lapse in Appropriations”

SBA is unable to accept new applications at this time for the Economic Injury Disaster Loan (EIDL)-COVID-19 related assistance program (including EIDL Advances) based on available appropriations funding.
Applicants who have already submitted their applications will continue to be processed on a first-come, first-served basis.

Thank you for your patience and your support.Thank you again for your patience with this ever-evolving situation. Aurora Consulting is constantly monitoring and updating so we can bring you the most accurate and helpful information for your decision-making.

Please stay tuned for more updates as we can provide them and please share this newsletter with anyone you feel may find it useful.

Please note we cannot guarantee the accuracy of any information we provide due to the fluidity of this ever-evolving situation and crisis. The information we provide is not to be misconstrued as financial advice.

Aurora Consulting cannot charge a consulting fee for advice with regards to CARES Act provisions for the Paycheck Protection Program (PPP) provided through SBA Approved Lenders. Aurora Consulting is a Broker, not a Lender. We do not make loans or loan approval decisions. All loans placed through third party providers. Aurora Consulting cannot guarantee approvals on any financing requests.

RESOURCES:

Link to US TREASURY.

List of SBA Approved Lenders in Connecticut.

SBA Sample APPLICATION.

Find More Information about the Paycheck Protection Program on the SBA Website.

The Commissioner of Banking Jorge Perez said, “The participating banks will be helping any businesses or person to access the program, and we are reminding people that this is a brand new program that is literally still under development as of today, by the U.S. Treasury Department and Small Business Administration (SBA). While it may take a bit longer than customers may anticipate, we expect that each customer will receive equal and careful treatment to process their loan application under the PPP.” Commissioner Perez added, “We want to make sure this is done right and the people get the help they need. Everyone who needs access to the PPP should check with their bank for information on when they will begin accepting applications. We expect a very busy first day tomorrow and just want everyone to be aware of the fact that it may take a few days for the SBA program to be fully capable of processing the expected volume of applications. We urge your patience.”

April 27: 2018 Tax Returns

We’ve been submitting PPP requests to various Lenders. Some Banks are already contacting clients to move their applications along, so that’s a hopeful sign.

If you are still waiting and working on PPP loan application, this is an important development. The 2018 Federal Tax return could be required in your process. Lenders need this because the IRS website is slow to respond to verification requests so Banks are using 2018 tax returns.

Make sure you provide the 2018 tax return in the name of the business as you applied for it. Unless you are Self-Employed with a Schedule C for 2019, personal returns will likely not be required. Check with your lender on requirements.

Please stay tuned for more updates as we can provide them and please share this newsletter with anyone you feel may find it useful.

RESOURCES:

Link to US TREASURY.

List of SBA Approved Lenders in Connecticut.

Find More Information about the Paycheck Protection Program on the SBA Website.

April 22: EIDL Replenished

One of our clients who received Grant money also received an email from SBA stating that the business is “ELIGIBLE”. Turns out the email actually came in before the Grant monies were deposited.

This morning we went in to the client’s SBA account. The eligible loan amount and repayment terms provide an excellent solution to the client’s needs and we completed a few basic processing screens. The formal application is now in process with SBA and we await a response (APPROVE/DECLINE).

Overall the process was very simple.

IF you have received Grant monies then you also should have received a similar email from SBA. If you received Grant monies and you don’t see the email, check your SPAM folder.

In other Good News: In the new stimulus package $60BIL is allocated to replenish the EIDL program. SO, more help is on the way.

Please stay tuned for more updates as we can provide them and please share this newsletter with anyone you feel may find it useful.

RESOURCES:

Link to US TREASURY.

List of SBA Approved Lenders in Connecticut.

Find More Information about the Paycheck Protection Program on the SBA Website.

April 21st: And the Hits Keep Comin’

It feels like FOREVER since we sent an update. But alas, here we are. Some good news and a lot of bad news, as per usual.

We have clients who received funding this morning under EIDL. There was NO NOTIFICATION of any type; just the electronic deposit of the funds into their bank operating accounts.

We’re getting lots of questions in response to our client updates. Unfortunately and sadly, we can’t answer those questions because we don’t know how the SBA is working. All we know is that It’s happening.

We’re looking for the next steps in the process.

There is NO calm, finite authority at the SBA that can provide any details about anything that’s happening. Our rep at one of our SBA Lenders said this morning, “It’s the wild west and the SBA is changing the rules every day, sometimes multiple times a day.”

Please hang in there. We are doing everything we can with all of our resources to bring light and clarity to the very dim circumstances.

Please stay tuned for more updates as we can provide them and please share this newsletter with anyone you feel may find it useful.

RESOURCES:

Link to US TREASURY.

List of SBA Approved Lenders in Connecticut.

SBA Sample APPLICATION.

Find More Information about the Paycheck Protection Program on the SBA Website.

April 17th: What Now?

Our SBA Preferred Lender is STILL ACCEPTING PPP Applications. They are providing more detailed guidance to us later today. We continue to submit PPP loan requests to put them in the queue for anticipated replenishment of the PPP funding by Congress.

At 5pm today, we’ll close our door to NEW Disaster Relief clients; we will continue to work with our existing clients.

Our follow up on EIDL and PPP requests, and our ongoing search for other sources of Disaster Relief funding will continue for all of you who have already signed with Aurora Consulting as a client for that purpose.

We attended the U.S. Chamber of Commerce conference. Positive aspects:

* Experts believe that EIDL will be revisited for replenishing funding, but maybe not immediately

* All experts confident that PPP will be replenished soon

* All Employers should investigate the “Employee Retention” provisions of the CARES Act. (Consult with your CPA; Aurora Consulting cannot assist with employment-related matters)

* Experts discussed other types of financial assistance after June 30th on the recovery side

We’re happy to share the link to the conference when we receive it, but please send an email. We don’t want to send it out without your request.

Please stay tuned for more updates as we can provide them and please share this newsletter with anyone you feel may find it useful.

RESOURCES:

Link to US TREASURY.

List of SBA Approved Lenders in Connecticut.

SBA Sample APPLICATION.

Find More Information about the Paycheck Protection Program on the SBA Website.

April 16th: No More Money?

As of a short while ago, the SBA reported that they are no longer accepting PPP Applications. Funding is exhausted.

We await the Congress to pass the next phase of assistance, including $250Billion in new funding for the PPP Loan program.

We continue to process all requests because we are not panicked that money won’t be available.

Please stay tuned for more updates as we can provide them and please share this newsletter with anyone you feel may find it useful.

RESOURCES:

Link to US TREASURY.

Find More Information about the Paycheck Protection Program on the SBA Website.

April 15th: Rules Keep Changing? Yup.

PPP UPDATE: We just got off the phone with our SBA Lender. 9 and a half hours of work today on PPP Applications flushed because SBA changed the rules. AGAIN.

There’s some GREAT news and some BAD news:

GREAT: They changed the payroll calculation to use TOTAL amount you paid your employees. Previously we had to subtract Federal Taxes and SS/MED. So that helps you get more money.
BAD: They changed the calculation for Self-Employed: NET income from Schedule C. This may disqualify some of you.
NOT TERRIBLE, BUT NOT GREAT: They updated document requirements for Self Employed: if you did not file your 2019 tax return yet, you still must provide the DRAFT of that tax return including Schedule C AND all 1099s you received for 2019.

For those of you whose PPP Applications have already been submitted to the Lender, it appears they may ignore our calculation on the application for the Average Monthly Payroll (AMP).

EIDL UPDATE: Our client in California, told us about other restaurant/business owner friends of his who applied in the first week and did receive money. The continuing bad news is that none of you (including him and Aurora Consulting) has received any grant money or a response from SBA for status on the EIDL eligibility request.

Please stay tuned for more updates as we can provide them and please share this newsletter with anyone you feel may find it useful.

RESOURCES:

Link to US TREASURY.

Find More Information about the Paycheck Protection Program on the SBA Website.

April 14th: Is the Boat Built? Nope.

We coined the phrase, EVER-EVOLVING on Wednesday March 25th in our first information newsletter to help business owners and others prepare for the process of finding working capital during this crisis.

That phrase continues to be the bedrock of our thinking, and the best description of how Lenders and SBA and Government in general are functioning.

We’ve been working on PPP submissions this morning and the “Ever-Evolving” beast keeps raising its head. I will provide more detail later today as we work through the submissions process for your PPP loan requests.

There are two important thoughts to share with you this morning, and Linda Rey and I REALLY need you to embrace these thoughts to understand how we are assisting with your PPP requests and the EIDL requests and any other capital opportunities we can find.

First Thought: What you’re hearing from Government officials…including what is featured on the SBA website…DOES NOT MATCH REALITY out on the front lines of the battle. In other words, the Generals are saying the war is going hunky-dory and we’re winning, but the troops on the front line are getting their butts kicked. This thought needs to replace any other thinking you may have about your expectation to obtain capital. There is a lot going on behind the scenes that SBA and Government is NOT telling you. That behind-the-scenes stuff is complicating and slowing the process for too many PPP applicants.

The good news: PPP lending IS happening, very slowly, but businesses are getting funded. Linda Rey and I do not believe you will lose out on the money; we believe the funds will be there. The other good news is that, with our communications with Lenders, we’re getting better insight as to how to present the most successful PPP request. (More detail later today)

Second Thought: As one Banker friend put it this morning, “Imagine there’s a massive flood. The Government says, ‘Get up on the roof and we’ll send a boat to rescue you.’ All the business owners climb on the roof to wait for rescue. The boat doesn’t show up. Because the Government still has to build the boat.” I’ll add to our Banker friend’s story: The Government isn’t telling you they have to build the boat, they’re telling the boat-builder to build it with minimal guidance for capacity or destination to complete the rescue.

Please keep in mind the extraordinary times in which we find ourselves. We always want to give you blunt, accurate assessments of the situation as it unfolds in its “Ever-Evolving” way; today is no different, except maybe a bit more blunt than usual. More later.

Please stay tuned for more updates as we can provide them and please share this newsletter with anyone you feel may find it useful.

RESOURCES:

Link to US TREASURY.

Find More Information about the Paycheck Protection Program on the SBA Website.

April 10th: Why the Delays in PPP Loan Process

We attended a technical training webinar this afternoon. Some important information we gleaned and we think is important to share based on questions we’ve received over the past week.

DELAYS WITH IMPLEMENTING AND FUNDING PPP LOAN PROGRAM AND LOANS:

Banks needed better guidance on how to sell to secondary markets. They have now received that guidance from SBA
Amazon is bringing in utilization of Amazon web servers to assist with speeding up data processing.
There was a delay with details on how banks needed to process applications.

PAYROLL CALCULATION UPDATES:

1099 Contractors you pay from your business are EXCLUDED from the Average Monthly Payroll (AMP) calculation. (NOTE: Our original reading of SBA rules indicated they could be included; this has changed)
If you pay yourself through distributions you should provide 12 months bank statements demonstrating the payouts or the K1 or 1099
If you hired more employees at the end of 2019 or early 2020 you can use the time period FEB 15 2019 to FEB 15 2020 to calculate your AMP
DO NOT APPLY TO MULTIPLE LENDERS
Some Lenders began funding the PPP Approvals yesterday Thursday, APR 9. So, the spigot is open.
SBA bringing in Amazon web-servers to improve performance on loan application reviews and approvals
Based on funding that began yesterday and thanks to the improved performance from Amazon web servers, businesses should see lending requests getting approved quicker in the upcoming 10 days
SBA is required to FUND your approved PPP loan within 10 days, although this may change to 5 days
NO ONE CAN CHARGE YOU FEES FOR PROCESSING YOUR PPP REQUEST; NOT PERMITTED BY SBA

FORGIVENESS:

Your forgiveness calculation period begins the DAY you receive FUNDING. The period is 8 weeks. Therefore by example if you receive funding on APR 20th, that is the first day of your eight week forgiveness review period.
How you use the funds during the eight week period is what SBA determines in their forgiveness calculation.
Staffing levels and Salary levels must equal the period of time you used to calculate your Average Monthly Payroll (AMP).
You can use the funding how you need it but keep in mind that only 25% of monies you use for Utilities/Rent/Mortgage Interest would be forgivable (as of this time). Therefore if you cannot bring employees back to work immediately and you use the money to cover those operating expenses you should assume that only 25% of those funds would be forgiven.
If you cannot bring employees back to work immediately, you can park the PPP monies in your bank account until you need them but the eight week period for forgiveness calculation remains the same: beginning the date you receive funding.

Thank you again for your patience with this ever-evolving situation. Aurora Consulting is constantly monitoring and updating so we can bring you the most accurate and helpful information for your decision-making.

Please stay tuned for more updates as we can provide them and please share this newsletter with anyone you feel may find it useful.

RESOURCES:

Link to US TREASURY.

List of SBA Approved Lenders in Connecticut.

SBA Sample APPLICATION.

Find More Information about the Paycheck Protection Program on the SBA Website.

April 9th: NO MONEY YET

Short and to the point: Based on our research and our own experiences for our EIDL request and requests we’ve submitted for clients, it appears that NOT ONE PENNY HAS YET BEEN DISTRIBUTED BY SBA for this vital program as of the writing of this email.

As we have stated from the beginning of our involvement with this ever-evolving financial situation, patience will win the day. Based on our experience with lending and the attendant Bank and/or Government bureaucracies involved in the lending process, no matter the urgency and priority of a situation, we still have to anticipate that systems are working in a slow manner in THE BEST OF TIMES.

With the overwhelming demand for Government direct/backed financing requests during this crisis, we can safely assume the normal systems are working even slower.

Yes, we commend and applaud the SBA for implementing processes as rapidly as they have. But that hasn’t matched with actual distribution of funds yet.

We are constantly monitoring on your behalf. Please maintain as much patience as you can muster, we know how difficult that is to do. We truly do understand and we’re ON YOUR SIDE.

Hang in there and we’ll get through this together.

Aurora Consulting cannot charge a consulting fee for advice with regards to CARES Act provisions for the Paycheck Protection Program (PPP) provided through SBA Approved Lenders. Aurora Consulting is a Broker, not a Lender. We do not make loans or loan approval decisions. All loans placed through third party providers. Aurora Consulting cannot guarantee approvals on any financing requests.

April 8th: 1099 Contractors

There is a lot of confusion as to the inclusion of 1099 workers on a Business’ application for PPP financing. You want to include these contractors in your calculation for obtaining your maximum benefit.

The spirit of the Act is to put people back to work and that includes 1099 contractors. Bear in mind, they can apply on their own, but that is a separate issue because of the assumption that an independent contractor working at your business may also provide work/services for other establishments. That’s why the PPP allows for including 1099 “payroll” into the calculation for your loan amount.

Another question we’ve seen: What if I hired more people at the end of 2019/beginning of 2020 and thus my payroll was higher than an “average” amount for 2020? Remember the spirit of the PPP is to put people back to work. When you use this as the underlying logic for your application, then it should make sense for a Lender to agree with your payroll calculations when you use the higher payroll for first Quarter of 2020 to determine your loan amount request.

This is where the experience and enthusiasm of your Loan Officer and Lender come into play. A seasoned Loan Officer will always understand how to navigate the nuances of any given loan application to present that to an Underwriter for approval in a way that meets credit-risk-assessment values.

The neophyte Loan Officer, or worse, call-center clerk, won’t understand these fine points and won’t know how to communicate your requirements to the Underwriter.

At Aurora Consulting our PPP advice includes referrals to a very experienced SBA Loan Officer working for a Non-Bank SBA Lender. We understand the value of a loan application’s particular “quirks” because many businesses have different scenarios and the value of a loan application presentation to create the best outcome for the applying business: a smooth process and a loan approval and funding.

This has been our guiding principle since launching Aurora Consulting, but is of even more importance during this crisis.

April 7th: PPP & EIDL Updates

PPP Update: We’ve been working on identifying the correct and best SBA Lenders. We have been collecting and collating your documents and we anticipate completing file reviews and phone interviews over the next two days. Our priority was to find the right Lenders and we have achieved that goal.

Our goal was to identify not only a Lender that can make the PPP process smooth for your application, but also that we can work with the right Loan Officer who has extensive experience with SBA loans in general. That experience is going to be valuable to help each of you with the finer nuances of your application requests. In our experience, it’s not enough to submit an application; the person and institution working on the application has to have the same motivation to make the financing work that we do as your Consultant/Broker.

EIDL Update: We applied for our EIDL eligibility questionnaire one week ago today. So far, no response from SBA as to Aurora Consulting’s eligibility. Our first EIDL application (before SBA changed to the eligibility questionnaire) was submitted on Friday March 27^th. That client has had no response either as of yesterday afternoon.

We understand the SBA has a limited staff to begin with and that they likely shifted much staff operations over to the PPP side. We anticipate we will all have an EIDL response, but continue to encourage your patience as it is clear that SBA is overwhelmed with the processing of those questionnaires.

In our ongoing commitment to assisting Businesses during this crisis, we are also seeking out other financing/grant opportunities through the extensive network we have been building for this purpose since March 30^th.

More information to come about such programs, but, in short, we believe the SBA loan programs (even with the forgiveness aspect) may not be ideal for every business situation. And, even though we are credit financing brokers, we also believe that any business decision about taking on debt should be considered with all appropriate gravitas.

This is why we continue to seek out other opportunities for you to help you get your business working capital you need to survive, re-open and get past this terrible crisis. Those opportunities may include: Community Development Grants, Grants from Corporate sponsors and Banks, Peer-To-Peer platforms, and Crowdfunding opportunities.

April 5th: Guest Speaker ZOOM Call Recap

Trevor Curran was invited to speak on a zoom call this morning with a prominent Boston business network. Here is a recap of what was discussed including who is Aurora Consulting, an overview of the past 9 days and bullet points of various facts & nuances of the SBA programs and resources.

April 4th: 6 FAQs Encountered This Week

We need to begin with a statement of admiration for the SBA. WOW. What they have done to respond to the COVID Crisis and to implement so rapidly the features of the CARES Act deserves tremendous admiration.

Yes, there are still lots of gray areas in the lending requirements. And, yes, many people are impatient to know exactly, down to granular detail, what those requirements are. But if you step back a moment, as we have done Friday and this morning, you can’t help but realize what an incredible feat the SBA has accomplished. Kudos SBA.

Many Lenders are accepting PPP applications; many Lenders are not. Most all Lenders are still wondering about how to go about the lending practices under PPP and await that guidance from SBA. But there is an overall spirit of “get it done” to serve the communities and get the money spigot opened and flowing to help businesses survive this crisis.

Below are several FAQ’s we’ve encountered in the past three days for your reference. We will continue to provide clear, accurate information about financing options to help your business through this disaster.

Q: I’m a Sole Proprietor, can I apply for PPP, and when?
A: Yes, you can apply on April 10th.

Q: Can I count my 1099 independent contractors in my employee count for retention under the PPP guidelines?
A: There is still conflicting information on this feature. We saw that 1099 contractors could be included, and then that changed sometime Friday morning. Stay tuned.

Q: I have two different LLC’s, can I apply for PPP for both?
A: Yes, two different applications.

Q: How much of the PPP loan is forgivable?
A: At this time there is still no clear guidance, but a general sense that you must use 75% of the PPP loan for employee retention, and that portion is the forgivable portion. Stay tuned.

Q: How do I calculate the amount of the loan, what’s with the 2.5 calculation?
A: Use your average payroll for the previous year, per month, and multiply by 2.5. For example, if your total payroll for 2019 was $10,000 monthly, multiply by 2.5 to arrive at $25,000. Remember to exclude any employee’s payroll above $100,000. If the employee earns $137,500, you must exclude the $37,500 from your calculation. An employee’s annualized payroll is capped at $100,000.

Q: Is the PPP the same as a regular SBA Loan?
A: No, this loan is radically different. No fees. Interest rate 1%. Deferred. No personal guarantee. No credit score requirement.

April 3rd: 19 Critical Points About PPP

YES!! We’ve bombarded you with multiple emails since last Friday. And now it seems we are sending twice per day.

We had someone ask if we could reduce the frequency of emails so that they didn’t have to unsubscribe. I said I would gladly remove him from the list.
And I did.

We will not reduce the frequency because this is the lightening speed that this information is being conveyed along with changes to said information. Even the Commissioner of Banking said …“we are reminding people that this is a brand new program that is literally still under development as of today…” (full quote below)

Below is additional information obtained TODAY through another webinar through a national financing company. Some of the information reiterates what we’ve shared already (and bears repeating) and some confirms even more updated information. The information has changed almost daily.

The deadline to file for the Paycheck Protection Program (PPP) is June 30th.
Companies with less than 500 employees can apply for PPP.
The term for all businesses no matter when you apply and no matter where you are located is 2 years at 1% (though it was a 0.5% rate, so that has changed too)
No payments for the first six months
There will be no personal guaranties
There is no prepayment penalty
The calculation is based on the average employee monthly payroll multiplied by 2.5.
The Per employee annualized payroll is capped at $100,000
Employees and compensation levels must be maintained
1099s contractors don’t apply (although this has changed in the last 24 hours and may change again which means you may be able to include 1099 contractors.)
Payroll includes vacation time, parental/family medical leave
What is paid over 8 weeks after the loan is made could be potentially forgiven
What can be forgiven includes payroll, mortgage interest, rent, utility costs
The “Forgiveness Formula” for how much of PPP will be forgiven is still fuzzy
What remains unclear is when someone can be hired back AND how that affects if, when and how much of the PPP will be forgiven
Consider opening a separate bank account to avoid co-mingling funds. This will allow you to easily track how the funds were expended.
Contrary to the rush to get PPP applications submitted, there are no applications actually being submitted. The banks are collecting documents and organizing them to put them in the queue to the SBA.
The Connecticut Division of Banking and the Connecticut Bankers Association URGE PATIENCE.
If your business doesn’t need PPP loan right now, please leave the system open to those businesses and employees that do have a need.

Link to US TREASURY.

We will continue to monitor the feverish facts and figures so we can all fathom our new reality. ALLITERATIONS!!

April 3rd: SHIT GOT REAL, FOR REAL.

The PPP rollout has become its own disaster.

According to Lenders we’ve spoken to and an article in yesterday afternoon’s NYTimes.com, as of yesterday evening SBA had not provided full guidance to Lenders on how to underwrite and approve PPP loans.

One Lender said SBA had provided “minimal” guidance by advising Lenders to accept three documents and process and approve the loans.

The three documents are:
1. Payroll records
2. Proof the business existed and conducted business last year
3. Loan Application (with a certification of needing the funds)

This Lender advised us that his company has decided to defer acting on PPP lending until they receive full and detailed guidance from SBA.

(The following reflects the opinions of Linda Rey and Trevor Curran at Aurora Consulting)

You should be aware that your local banks, especially on the smaller scale, may make their strategic decisions in the same fashion. Or they may decide to lend under PPP on a limited scale, such as to existing business customers. (According to the NYTimes.com article, CHASE stated it would only lend under PPP to customers with a business checking account as of February 2020)

The reason Lenders may hesitate is the concern that, with this minimal guidance, should they lend under PPP and then later a loan becomes a default situation, the SBA and the Federal Government may take that Lender to task for having made a “bad” loan.

If you think that, given the current circumstances, this is unreasonable or unrealistic, then you are living in a dream world; and this is why.

Government lending programs, notoriously the FHA (Federal Housing Administration) have a long history of holding lenders accountable for defaulted loans even when the Lender made the loans following the Government guidelines.

Lenders are right to be wary about venturing out on what they perceive to be rocky terrain.

Which leads us to our advice to all of you today: SLOW DOWN. We have stated this same advice for the past ten days. This situation is Ever-Evolving.

There is no “quick fix” although the press coverage and chest-beating from Government officials may make it seem that way. This is the lending world in which we at Aurora Consulting work.

Lenders are cautious, conservative and careful. Absent granite-like assurances and guidance from the SBA, Lenders will behave like the profit-driven and careful-lending organizations they are: they may “wait and see” before jumping on the PPP bandwagon.

In three conversations with CPA’s yesterday, we learned that many of their clients are calling them up, inquiring about EIDL and PPP and asking, “When do I get my FREE money?”

Neither of these loan programs are “FREE” money. These are LOANS. And they must be repaid.

SLOW DOWN.

Decision-making out of panic will not truly help your business survive. Ask yourself this question: DO I WANT TO TAKE ON DEBT FOR MY BUSINESS?

Eliminate the “survival” component. Focus on the DEBT question. Because the monies from these programs, with the exception of the EIDL $10k Grant/Advance, must be repaid.

Continuing our mission to provide clear and accurate information, we will present more about PPP as it develops. We’re receiving communications from Lenders stating, in oblique terms, their complete and utter confusion and lack of detailed information about how to properly apply for a PPP loan.

What we’re doing today here at Aurora Consulting.

We’ve decided that, considering the mad rush we’ve worked in for the past ten days helping clients and friends apply for EIDL financing, and other reading, researching, responding-to, CARES Act information and daily updates, well, we’ve decided we’re going to chill out today.

Also, we know from experience that EVERYONE will bombard Lenders with PPP requests today. And the Lenders don’t actually know anything. YOU READ THAT RIGHT.

Even those Lenders accepting applications will be bombarded. We recommend you do the same, if possible, and chill out. If you can’t do that, and you want to concentrate on thinking about your business, then do this:

Conduct a matter-of-fact, honest-to-goodness, totally honest with yourself and realistic assessment of the COVID-19 situation and your business’ prospects over the next three, six, and twelve months. Maybe today is a good day to decide if and how you will continue.

For example, here at Aurora Consulting, we’ve used this crisis as a time to look down from 10,000 feet, survey the landscape, and make cold and difficult, but honest, decisions about how we want to continue.

We’ve begun shifting our entire business strategy over the past ten days. Going forward, we’re going to conduct our business in a radically different fashion.

Take a deep breath. Ask yourself the hard questions. Or…pick a couple of great movies, and chill out.

April 2nd: 6 IMPORTANT POINTS to Consider

Aurora Consulting is committed to constantly studying and researching in order to provide you with up-to-date and accurate information about obtaining working capital to keep your business alive during this crisis.

Today we attended two webinars and additionally read several papers and information sheets from various sources.

We realize our updates have been frequent in the last week. The information is so overwhelming, conflicting and ever evolving, we wanted you to know what information we’ve gleaned as accurate.

1. SBA Formal PPP Guidelines. It is anticipated that today SBA will issue the formal Lending guidelines or their “opinion letter” for SBA Approved Lenders to rely on for making lending decisions when accepting and approving applications for Paycheck Protection Program loans.

2. In the absence of a formal opinion and guidance so far, there has been much confusing speculation about specific features of the loan, not the least of which when and how to apply for the PPP loan. Aurora Consulting will continue to monitor developments to assist you with accurate guidance.

3. SBA Approved Lenders. This is your source for the PPP loan. SBA indicates on their website that Lenders will begin accepting applications tomorrow, Friday, April 3rd.

4. SBA EIDL Loan status. If you applied for the EIDL prior to Monday March 30th, you should immediately re-apply on SBA.gov and complete and submit the new EIDL eligibility questionnaire. We learned from one source that SBA is considering previous applications “bottom of the pile” for processing.

In addition, by completing the questionnaire, if your business is eligible, you will qualify for the immediate deposit of up to $10,000 EIDL Grant/Advance monies. If your EIDL application is ultimately declined, you do not have to repay this grant.

5. 501c(3) Non-Profits: YES. Qualified to participate in the EIDL program and the PPP loan.

6. CYBER SECURITY. While this is not a financing issue, it is certainly a topic that appears on our “radar” here at Aurora Consulting all too often. We are preparing to begin publishing an email newsletter dedicated to Cyber-Security issues, especially with so many employees working from home during this crisis.

Aurora Consulting strongly recommends you review and strengthen your Cyber-Security protocols and training of your employees. With so many people working on remote desktops, from home, distracted by the crisis news, distracted by crisis survival skills (grocery-shopping), and distracted by other family members, it’s easy for them to relax their cyber-vigilance. Protect your business by frequently updating protocols and reinforcing training and vigilance.

7. Linda Rey, owner of Aurora Consulting is a Licensed Independent Insurance Broker here in The State of Connecticut. She can assist you with advice or in purchasing the most up-to-date Cyber Liability Insurance for your business, especially with these challenging times we work in.

Aurora Consulting is a Business Credit Financing Broker. During this crisis we have endeavored to create simple, accurate and reliable resources for business owners to find cogent information. We welcome feedback and questions through our email: Curious@AuroraConsulting.biz

We ask that you share our email with other business owners or professionals who you feel may find the information relevant and useful.

Our ongoing advice to business owners is that the financing landscape, including Government emergency assistance, is “ever-evolving” and you should slow down and take care with your decision-making even as it is fueled by the anxiety of keeping your business alive. We’re here to help with whatever advice and resources we can provide.

Banks Warn of ‘Overwhelming’ Demand and Messy Start for Small Business Loans

List of SBA Approved Lenders in Connecticut.

Find More Information about the Paycheck Protection Program on the SBA Website.

April 2nd UPDATE:

Ten days ago here at Aurora Consulting we made a decision about our response to the COVID-19 crisis.

We saw our business model as Brokers locating working capital and bank loans for business owners rapidly evaporate at worst, or, at best, reset to “pause” status. As a result, we decided we would research and coalesce valuable and accurate information to share with our existing clients and within our network of professionals and business owners.

We recognized early on that business owners were struggling to ascertain what Lenders were doing and what Governmental programs might be available to assist with capital. There was and continues to be a ton of information out there that is inaccurate, wildly-speculative, or lacking in sufficient detail to be useful for the specific needs and questions of business owners.

The response to our Disaster Relief Updates has been overwhelmingly positive. We thank you all for that. We will continue with our best efforts to provide information based on our research, our conversations with Lenders, and our hands-on experience with lending practices, both in the past and during the current situation.

One important caution: Please know that we are presenting information in a general format. We cannot answer many of the specific questions about your unique funding requirements or qualifications. When asked, “Will my business qualify for ‘such-and-such’ financing if ‘this’ fact exists?”, we can only provide in most cases a very generalized answer to that question based on our experience and knowledge.

Whenever possible we attempt to provide links to the relative authorities in our email newsletters so that you can find specific answers to specific questions. And we caution you to beware of any “expert” claiming to know the exact mechanics of any disaster-related loan program or guideline. No one has an inside track to this entirely new lending paradigm we find ourselves in.

Also, know that there are no “simple answers” to many of your questions. This crisis and the lending arena’s ability to fund working capital requests at this time are, as we stated in one of our first Disaster Relief Updates, “Ever-Evolving.” Everyone, including us here at Aurora Consulting, are working within a chaotic and changing paradigm.

We have encountered conflicting information in direct statements from Government representatives and Lenders. One business owner told us, “My Banker who I’ve been with for 30 years is confused.” While all these professionals are certainly well-intentioned, you, as a business owner must take with a grain of salt and skepticism the accuracy of any statement purported to be “real”. We often make the disclaimer about our own information that it may be inaccurate too as a way to prepare you to approach this entire situation with careful analysis.

We recommend first and foremost that you strive to reduce your panic level. The “toilet paper” response is not going to get you and your business through this crisis. Slow down, find resources that are intelligent and trustworthy, and carefully analyze the information and how it pertains to your business. In better times, this is exactly the approach that we take at Aurora Consulting to qualify our clients and determine how to find a financing solution that works for their needs; we never have rushed into any funding scenario, no matter the pressure from a stressed-out client in need of working capital in a hurry.

Payroll Protection Program (PPP) UPDATE THURSDAY APRIL 2nd

April 3rd Application Launch Date. We have seen some conflicting information about WHAT type of business can apply beginning tomorrow. The SBA website indicates only that SBA Approved Lenders can begin accepting applications tomorrow. But there are reports that tomorrow is only for Small businesses and sole proprietors to begin applying; Independent Contractors and Self-Employed individuals can begin applying on April 10th. Aurora Consulting recommends contacting either your Local SBA Office or an SBA Approved Lender.

You can find your Local SBA assistance here: https://www.sba.gov/local-assistance/find/

Finding an SBA Approved Lender. Aurora Consulting received an email directly from SBA as a result of our application for EIDL assistance. This email had a link to a list of Approved SBA Lenders in our home State of Connecticut. We checked the SBA website to locate a national list of SBA Approved Lenders. The SBA website seems to have some difficulties to help you locate an SBA Approved Lender in your area. When we say difficulties, we mean that, by spending about ten minutes with different search terms on the SBA website we could not locate a national list of SBA Approved Lenders.

We then selected one of the State SBA offices to see if a link or list was provided on that State SBA website and could not locate a list or connection to SBA Approved Lenders. Aurora Consulting recommends you contact and/or subscribe to the email newsletter for your Local SBA office, or begin your search by contacting local Banks to inquire if they are SBA Approved Lenders.

The 75% “rule”. Again, we’re seeing some conflicting information that a business is required to use at least 75% of a PPP loan specifically for payroll expenses. The SBA website page dedicated to the Paycheck Protection Program states only this vague sentence: “Due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll.”

This is not the kind of specific guidance that business owners need. For example, what if you used some of the PPP funds to re-train your employees, including purchasing training materials or equipment specialized for reconfiguring your business to maintain your business with new procedures? That’s not a use of funds dedicated to payroll but it is a use of funds for employee retention.

The general guidelines for PPP is that SBA will compare your actual payroll costs during the crisis period with the previous year payroll costs, 2019. We recommend you use that as your guidance.

The PPP Application. We’ve already received calls from professionals panicked and/or flummoxed by some features of the PPP Loan application. Our long experience completing applications helps us provide the following guidance: when providing information or an answer to a question on an application, think the worst case, think like a “risk-averse” Underwriter, apply supreme paranoia and fear of a loan rejection to your thinking. When you think you’ve answered the question correctly, go back and read the question again. When you think you’ve provided sufficient documents or accurate numbers, triple-check yourself.

In our experience and opinion, The BEST way to achieve a successful loan request result is to provide an over-the-top complete Loan Application, both with information and documentation.

BEWARE OF SCAMMERS. Aurora Consulting does not and cannot charge any fees to assist in CARES Act PPP Loan Applications; Brokers are not permitted to charge any fees for assisting with PPP Loan Applications. Lenders are not charging fees for PPP Loans. BEWARE of anyone telling you they can process your Loan Application for a “faster result” or a “better result” or a “guaranteed result” and offering to do so for a fee. This is the time during a crisis when the sharks circle in the waters and the scammers smooth-talk their way into your wallet.

April 1st UPDATE: GRANTS

The CARES Act provides for emergency grants of up to $10,000 for businesses affected by the COVID-19 crisis. This Grant aspect is a part of the SBA Economic Injury Disaster Loan (EIDL) program.

You must apply for an SBA EIDL to qualify for the grant advance. SBA has streamlined the process by creating an eligibility questionnaire. With basic information about your business at the ready, you should be able to complete and submit the questionnaire in about 10-15 minutes.

SBA Website states the following: “The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. The loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid.”

At Aurora Consulting, our research indicates the following key points about the EIDL EMERGENCY ECONOMIC INJURY GRANTS:

Designed to provide quick relief while applicants await processing of SBA EIDLs.

Designed to provide quick relief while applicants await processing of SBA EIDLs.
May request grant of up to $10,000 to cover immediate payroll, mortgage, rent and other specified operating expenses
Grant does not have to be repaid, even if loan application is denied
Covered Period: JAN 31 2020 to DEC 31 2020
A business that receives an EIDL during covered period can also apply for or refinance their EIDL into a Paycheck Protection Program loan

April 1st UPDATE: PPP

SBA has updated information for the Paycheck Protection Program Loan as of 12:06 P.M. EST April 1^st, 2020

NUMBER ONE: SBA Approved Lenders will begin accepting applications on Friday April 3^rd, 2020. For List of Approved Lenders, see link below.

Sample Application: SBA published the Sample Application on their website today. Discard any previous samples, download the PDF of the newest version, complete and assemble accompanying documents for submission on Friday April 3^rd to an SBA Approved Lender. See link below for updated Sample Application.

Important OTHER updates to PPP Program:

SBA will forgive portions of loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities
The Paycheck Protection Program will be available April 3, through June 30, 2020.
This program is for any small business with less than 500 employees (including sole proprietorship’s, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by Corona-Virus/COVID-19.
Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.
Small businesses in the hospitality and food industry with more than one location could also be eligible at the store and location level if the store employs less than 500 workers. This means each store location could be eligible
Portions of the loan will be forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll).Loan payments will also be deferred for six months. No collateral or personal guarantees are required. The SBA will not charge small businesses any fees.
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
This loan has a maturity of 2 years and an interest rate of 0.5%.

NOTE FROM AURORA CONSULTING: SBA will compare your Employment levels and Salary/Wage levels by comparing 2020 to your 2019 levels. Be extremely accurate in your RECORD-KEEPING for BOTH years.

List of SBA Approved Lenders in Connecticut.

Find More Information about the Paycheck Protection Program on the SBA Website.

April 1st UPDATE: GRANTS

The CARES Act provides for emergency grants of up to $10,000 for businesses affected by the COVID-19 crisis. This Grant aspect is a part of the SBA Economic Injury Disaster Loan (EIDL) program.

At Aurora Consulting, our research indicates the following key points about the EIDL EMERGENCY ECONOMIC INJURY GRANTS:

Designed to provide quick relief while applicants await processing of SBA EIDLs.

Designed to provide quick relief while applicants await processing of SBA EIDLs.
May request grant of up to $10,000 to cover immediate payroll, mortgage, rent and other specified operating expenses
Grant does not have to be repaid, even if loan application is denied
Covered Period: JAN 31 2020 to DEC 31 2020
A business that receives an EIDL during covered period can also apply for or refinance their EIDL into a Paycheck Protection Program loan

April 1st UPDATE: PAYCHECK PROTECTION PROGRAM

SBA Announced last evening their rapid coordination with US Treasury and SBA Approved Lenders to act urgently on the financing provisions of the CARES Act.

SBA also released a “sample” application to SBA Approved Lenders for the Paycheck Protection Program.

SBA is stating Lenders may begin accepting applications by Friday April 3^rd.

More information here: https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp

IT IS IMPORTANT TO NOTE: Your SBA Lender cannot and will not accept formal applications for the Paycheck Protection Program (PPP) until they receive final, formal guidance from SBA (anticipated to be in place so Lenders can accept applications April 3^rd). SBA continues to review the CARES Act provisions and coalesce those into the SBA “opinion” letter which becomes the basis for formal guidance to SBA Lenders.

The SBA Summary of the Paycheck Protection Program is that PPP “will provide critical capital to business without collateral requirements, personal guarantees, or SBA fees—all with a 100% guarantee from SBA. All loan payments will be deferred for six months. Most importantly, the SBA will forgive the portion of the loan proceeds that are used to cover the first eight weeks of payroll costs, rent, utilities, and mortgage interest.”

In our research here at Aurora Consulting we found other details to be aware of. As with all information “out in the world” at this point, until SBA completes its formal guidance opinion, our information is subject to change and revision.

Our research indicates:

100% Guarantee. Our research indicates that, under the provisions of the CARES Act, this Guarantee will change incrementally:

100% SBA guarantee through DEC 31 2020
AFTER DEC 31 2020:
- 75% for loans over $150,000
- 85% for loans under $150,000
DEFERMENTS: Lenders must provide complete payment deferment for at least six months and up to 12 months
Federal Tax Effect: Forgiven Loan amounts (cancelled indebtedness) are excluded from gross income for tax purposes
Loan maturity: loans or portions of loans not forgiven will have a maturity of 10 years or less and a maximum interest rate of 4%. There will be no prepayment fees

A note on the sample application:

Trevor worked as a Mortgage Banker, including through the period of the revision of the FannieMae 1003 Residential Mortgage Loan Application. This form was revised several times through the roll-out period until the final form was released. While SBA and US Treasury have worked with unprecedented speed to implement the provisions of the CARES Act, the sample application provided may undergo further revisions before implementation for use by SBA Approved Lenders. That having been said, we strongly recommend that business owners immediately review the application and complete their own version of the sample so as to be better prepared when the formal application is available and SBA Lenders begin accepting applications. Likewise, assemble your supporting documentation now so that you can apply with all speed and alacrity.

Aurora Consulting Advice for Business Owners applying for and receiving funds through the Paycheck Protection Program:

COMPLETE Applications.

Traditionally, an SBA application can be delayed or even declined for incomplete application information and/or supporting documents. With the dramatic response from SBA for this urgently-needed program, it is entirely possible those stringent conditions may be relaxed.

We recommend you assume the traditional methods for processing applications will stay in place. Submit your Application and supporting documentation in an extremely thorough manner. Triple-check your work. Every question should be answered; numbers should be accurately presented. Documents should be presented in a clear, legible, and organized manner. Always present PDFs of documents, not images. Separate documents instead of submitting in large batches. Label documents accurately. For example, separate your Federal 2019 tax return from State, Local returns and unnecessary forms. Create that 2019 Federal return as a single PDF and label that PDF in an easy-to-identify manner. Keep in mind that SBA Loan Officers and processing staff will be overwhelmed with requests and you cannot slow down your own loan process by forcing SBA staff to identify a document, organize, label, and separate.

RECORD-KEEPING.

Now is the time to tighten your record-keeping systems. When it comes time to request the forgiveness of your PPP Loan, SBA will require proof that your business used the funds ONLY for the allocated purposes: operating expenses and employee retention. Prepare your record-keeping in a detailed, multi-layered manner. Do not assume that something as simple as a spreadsheet will meet the due diligence expected by an SBA representative. Add layers of evidentiary records to that spreadsheet; the onus is on YOU to prove that your business allocated EVERY PENNY of PPP funds to operating expenses as defined by the law and to employee retention. Do not assume there will be allowance for “gray areas.” We base this advice on a comment by an SBA Administrator in a recent webinar. He said that businesses will need to prove they used the funds as intended. Again, in our respective careers in Insurance and Mortgage Banking, when a Governmental authority conducts an audit, they require extensive, over-the-top and accurate documentation.

Stay Tune to Aurora Consulting.

We seek to provide timely, cogent, accurate advice to help business owners navigate these treacherous waters. We base this advice on our research, our conversations with Lenders and our own experiences assisting business owners. For example, the Application-submission and record-keeping advice provided is based on our real world experiences in our respective Insurance industry and Mortgage Banking careers and in our current interactions with our financing clients.

MARCH 30 UPDATE:

Our emails and phones have been blowing up since Friday with inquiries from anxious business owners about details of the CARES Act signed into law Friday afternoon.

We’re also seeing “authoritative” sources, including U.S. Chamber of Commerce, a national law firm, and others, presenting details about CARES Act.

Here’s our take on this Ever-Evolving situation:

SBA needs time to read the actual CARES Act provisions and then create the OPINION LETTER which they send to Lenders
The SBA OPINON LETTER is the “bible” for Lenders
UNTIL that OPINON LETTER is actually issued AND Lenders determine how/if they can lend under the CARES Act guidelines, all other information out there must be considered suspect.

We have already seen a contradiction between a statement in U.S. Chamber of Commerce literature about CARES Act and actual verbal guidance in a Governor’s Webinar from the regional SBA director.

We are reading other literature and attending other webinars.

At Aurora Consulting our goal during this crisis is to get ACCURATE information to you.

Anxiety about obtaining financing through SBA and the CARES Act is frighteningly similar to the panic-buying of toilet paper. We encourage everyone to slow down. Wait for the RIGHT information to become available. Refrain from making applications without appropriate care and due diligence: SBA will deny your EIDL application if it is incomplete, but they won’t tell you that’s the reason.

We are offering our services as consultants for flat fee of $750.00 to expedite filing for SBA Economic Injury Disaster Loan (EIDL) applications.

We are also offering an expanded consultation to provide research, advice and assistance on all available disaster relief loans, grants, and all other sources/lenders/opportunities to locate working capital to assist our clients. This expanded consultation can include preparation and submission of applications and/or documents for other sources/lenders/opportunities to obtain working capital including other loans, grants, peer-to-peer, and crowdfunding.

The fee for this expanded consultation is offered on a case-by-case basis.

MARCH 27 UPDATE:

At Aurora Consulting, our practice as Brokers seeking out business loans and credit financing has radically changed over the past few days.

We’re using our experience, our knowledge of the business based on real-world and real-time experiences, and our extensive contacts in the Lending industry to collect and distribute accurate information you can use to make smart decisions to find the capital you need to survive the COVID-19 crisis.

The CARES Act was signed into law today. The SBA Economic Injury Disaster Loan (EIDL) program has been accepting applications for about three weeks. We have successfully submitted an EIDL application this afternoon for a California restaurant client. The EIDL application is complicated and requires extensive information to be submitted both at application stage and during the process of the loan request.

EIDL provides up to $2Million and rates are: 3.75% 30yrs PROFIT Businesses; 2.75% 30yrs NON-PROFIT Organizations

The overwhelming advice from Bankers we know from our matrix is this: ALL business owners negatively impacted should immediately apply for EIDL assistance. You can find the application on SBA.gov and click on the amber-colored COVID-19 banner at the top of the page. Download the application forms, complete and sign, and upload with accompanying documentation. Be thorough for best chance of speed and success. ALSO: check off ONLY EIDL financing otherwise your application will be held up.

Aurora Consulting is offering free advice and an affordable consulting fee if a business needs our direct assistance to collate the information and complete and submit the application to SBA. SBA allows a consulting fee up to $2500 maximum. Linda Rey and I have agreed that we will charge only $750.00 as our consulting fee to complete and submit an EIDL application. We will accept a $250.00 upfront payment with the balance due later at a date to be agreed upon by both parties. We don’t want to negatively impact your already-strangled cashflow and we’re willing to work with anyone who needs our assistance. Basic advice and guidance is free of charge.

Here are highlights from the webinar with more to follow in another newsletter soon:

CARES Act website is not active yet
SBA.gov website does not yet have CARES Act information
Programs will not be available for a week or two
It is recommended to apply for BOTH EIDL and CARES Act financing. Get the applications in process. Once a determination is made for approval, you should then choose which of the two loans works best for your needs.
CARES Act Loans are basically an SBA 7a Loans up to $5MM, short term loans that will be converted to grants if you retain employees.
Employee Retention: this has been most actively discussed in the media and seems to be a priority of the CARES Act financing options. That leads to other questions about how to qualify and that aspect remains to be seen based on the soon-to-be-released CARES Act guidelines from SBA
RECORD KEEPING: Step up the quality of your record-keeping in terms of Employees and Operating Expenses. A mention was made that “forgiveness” of the loan will be decided after an interview and query for proof or Employee retention and that funds were used for Operating Expenses.
SBA does not yet have a timeline when the Lender guidelines will be available to follow for lending but there is an urgent priority within SBA to coalesce the information from the CARES Act and to get information to SBA Lenders
501C3 organizations are eligible under EIDL and CARES Act
500 employees or less
We’re looking to access the Small Business Owners Guide for CARES Act which should be available tonight and we will share pertinent information with you in other email newsletter updates

We’re looking to access the Small Business Owners Guide for CARES Act which should be available tonight and we will share pertinent information with you in other email newsletter updates

Linda Rey and I have been fielding calls and queries from anxious business owners all week. We’re doing our best to parse the information and get the ACCURATE information to you. We strongly recommend you slow-down your decision-making. We’ve already seen some business owners making bad decisions to obtain capital out of desperation. This includes submitting EIDL applications on their own without professional guidance; in several cases these applications have been denied.

We use the phrase “EVER-EVOLVING” to describe the lending atmosphere in general, and the emergency programs specifically. Please email with any questions you may have and please SHARE this email with anyone you feel may find the information useful.

Please email with any questions you may have and please SHARE this email

with anyone you feel may find the information useful.

MARCH 26 UPDATE:

Ever-Evolving. This is the only phrase we at Aurora Consulting have to describe the lending environment. We’re getting lots of questions from business owners, some specific, some very general, as to their ability to finance their businesses through this disaster. We are constantly studying, researching and discussing with Lenders to provide accurate information. But overall, the information we’re gathering is best summed up with that expression, “Ever-evolving.”

Here are some highlights about the lending environment as of today Thursday March 26^th, 2020 according to various lenders with whom we have spoken:

Lenders are busy working on SBA deferment requests. If you have an existing SBA Loan for your business, you’re permitted to request a deferment of payments during this disaster. To request a deferment you must make the request directly to your Lender. And that’s what is happening: existing SBA loans are requesting deferment and the Lenders are buried with those requests. So, there’s no time to entertain new financing requests.
Apply for a Disaster Loan TODAY. Everyone we’re speaking to in the lending arena says the same thing: If your business is impacted negatively due to the crisis, apply for EIDL (Economic Injury Disaster Loan) through the SBA. Do that first and foremost, even if you have an existing SBA loan and you wish to request a deferment.
Your Current Loan Application is on hold. If you have an application in process already with a Lender that was submitted before the crisis, the jury is still out as to how Lenders will proceed. For the moment, consider your loan application on “pause.”
Strong Businesses Versus Weak Businesses. The general consensus in the lending world is this: If your business was healthy pre-crisis, then Lenders are looking more favorably at your application. If your business was facing challenges before the crisis, the lenders anticipate that your business may not survive this crisis. Understanding that underlying philosophy will help you understand how a Lender will treat any financing request you present in the short-term. All of this assumes that lending practices return to “normal” sooner rather than later.
The longer this crisis unfolds, the more uncertain everything becomes. Even with a Government guarantee, Lenders won’t want to be on the hook for loans that default. Keep that in mind as you determine your survival strategies for your business.
It’s too soon to know what is available under the new $2 Trillion assistance package. There are many layers of this not-yet-signed-into-law bill when it comes to financing available for businesses. Especially when it comes to conditions for approval (maintaining employees on salary is the most-often mentioned condition, but there are others).
SBA Opinion Dictates Lending Practices. Once that bill becomes law, the SBA still must review the law and issue an opinion to Lenders as to how they can proceed with financing under the new law. This SBA opinion becomes the “bible” for Lenders to follow in Underwriting loan requests. Lenders will NOT act on any financing requests until that opinion is issued by the SBA. Period. And Lenders can’t answer specific questions about the bill until SBA issues that opinion.
Your State And Local Government Options. Make yourself aware of financing options available through your State and Local Governments. If you’re a member of your local Chamber of Commerce, that’s probably your best resource for information on State/Local programs.
Interest rates: SBA Disaster Relief Loans (EIDL: Economic Injury Disaster Loans) are loans, not grants. Interest rates are 3.75% 30yr for “for-profit” businesses and 2.75% 30yr for “not-for-profit” businesses.
Interest rates on other business financing: Assuming you can obtain an approval for other types of financing at this time (because your application was submitted prior to the crisis and the Lender acts on approving it), then you should expect the worst when it comes to the interest rate. In short, anticipate that any rate offered to you by a Lender will be “non-negotiable.” There is too much uncertainty in the credit markets to allow Lenders flexibility in negotiating terms with borrowers. This may change once the new bill becomes law and the dust settles on the financing options allowed in the new law, but for the moment, you should assume the worst.
Remember 2008. IN any action you take or consider when it comes to financing at this moment, keep in mind what happened in the Residential Mortgage markets in 2008. The landscape was ever-changing, applications with challenging circumstances were not-approvable, lending went to the ultra-ultra-conservative side in the rendering of credit risk decisions, underwriting added “overlays” on top of “overlays” to make approving Residential Mortgages nearly impossible. Assume this is true today and for the foreseeable future in business financing.
Control What You Can Control. When all is said and done, the answers that many business owners need about financing and survivability are not available. Lower your anxiety by assuming the worst case and deciding to control only those things you have direct control over.
Other Sources. Make yourself aware of other sources to obtain capital to help your business survive. Not-For-Profit organizations are providing temporary relief, especially when it comes to helping to save jobs and keep people employed. There are also grants coming available such as through FaceBook and other sources. Peer-To-Peer lending platforms are providing assistance too. Exhaust every possible source for capital to help your business survive.
Stay Tuned To Aurora Consulting. We’ve shifted our Brokerage business to provide resources, advice, and accurate information to business owners, both our clients and in general. We’re not sure how we’re going to survive this storm, either, as our Brokerage model has basically been smashed against the rocks. But we’re determined to help businesses weather the storm with our experience and knowledge. Linda Rey spent 30 years in the Insurance industry and advised business owners during catastrophes such as Super Storm Sandy; Trevor Curran spent 30 years as a Residential Mortgage Banker, and survived the 2008 meltdown. We’re putting that experience to work for you with as many frequent and cogent updates as we can.

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Clients are Talking

I honestly could NOT have done this without your perseverance!! Owe you and Linda big time my friends!!

Jack

It is with GREAT pleasure that I write this review of Aurora Consulting. I was referred to them and they have been Effective and Efficient. These are very stressful times for us Small Business Owners having to close our Businesses, deal with financial losses and then having to navigate through the SBA programs available to us.Not only did Aurora learn the ever changing EIDL and the PPP process, Trevor responded to all of my calls, emails or texts in speedy fashion. In fact, we communicated constantly and he was reassuring throughout the entire time. They were successful in securing an EIDL Grant and PPP loan approval for my business. I am so impressed with their work ethic that I look forward to working with them to securing my business credit line as the economic climate changes.

Sam S.

Great consultants with a vast network of resources to offer small businesses with commercial lending. I highly recommend Trevor and Linda for all your small business financing needs.

Chris. R.

Thank you so much for providing clear, concise and important information. You guys rock!

Tracy B.

Shut out of the first round of PPP funding by my local bank of 20 years — along with most other truly small businesses — and with another 310 billion of funding coming into the picture that would fly out the door, I realized I was going to need some street savvy to break into the application process. Trevor Curran and Linda Rey at Aurora Consulting not only have the experience and industry knowledge, they’re also good people, truly dedicated to their clients. Within 24 hours of the release of fresh funding, I had an accepted application by a new lender, and had submitted all requested documentation. They hit the ground running as soon as I called, and didn’t pause until we crossed the finish line. Finance rock stars extraordinaire!!

K.T.

There are not enough words to describe the dogged determination - coupled with a deep concern for customers - that Aurora Consulting has demonstrated during this unprecedented crisis. They worked diligently on helping me find emergency funding at a time when I had to focus on my business and my family. I had tremendous peace of mind knowing Trevor and Linda were working on my behalf. I would recommend them to anyone considering their services. An incredible team dedicated to serving others!

A.P.

Trevor and Linda have been a tremendous asset to my small business. They bring positive energy and even more importantly, positive results to everything they do for us. Thanks to their diligent efforts, I received all the COVID-19 funding that I sought and more. My calls, emails, and concerns were consistently addressed in a timely manner. It has been and is a great experience working with Trevor and Linda, and I look forward to continuing the relationship. Highly recommended!

Todd I.

Great job in putting together a presentation for me! I already see an increase in closing my deals. Linda is extremely professional and knowledgeable about all facets of business. Highly recommended if you want to grow your business!

Ron M.