SWAMC staff is actively engaged in conversations with other ARDORs, the Alaska Small Business Development Center, Alaska Municipal League, and other State and Federal agency representatives to sift through and understand the many resources available for businesses, municipalities, tribes, and individuals who are impacted by the COVID-19 pandemic. SWAMC staff doesn’t claim to be experts on these programs, but we will do our best to help in any way that we can.
The U.S. Small Business Administration announced last Friday that the next round of Paycheck Protection Program borrowing will begin Jan. 11, but there will be a catch.
Select lenders will have exclusive access to accept PPP applications for first-time borrowers on Monday, January 11 and for second-time borrowers on Wednesday, January 13 using what the SBA is calling “community financial institutions.” The SBA defines those as Community Development Financial Institutions, minority deposit institutions, certified development companies and microloan intermediaries, and Alaska has none participating in the State. The SBA has not yet announced a timeline by which other mainline financial institutions will be invited to participate, but it is assumed to be on or possibly before January 18, and both first time and second time borrowers may apply through these mainline financial institutions.
As long as the PPP funds are spent to keep employee and compensation levels maintained, they can be used for other eligible expenses including lease payments, mortgage interest, worker protection costs, utilities, and other business needs. If you spend at least 60% directly on payroll costs, the loan qualifies for full loan forgiveness. The PPP Loan has a 1% interest rate and there are no payments due for the first 10 months. The EIDL Loan has a 3.75% interest rate with a 30-year term, can be forgiven in some circumstances, and offers an advance grant (no payback) of $10,000 on receipt of a complete application. Even if you don’t qualify for the EIDL Loan, you keep the $10,000 with no payback.
The following links will take you directly to the application rules and process for Northrim Bank, First National Bank of Alaska, Wells Fargo, Bank of America, and Citibank who are all ready to participate when allowed by the SBA. They all walk you through the eligibility/application process and have a FAQ link as well. Choose your provider now and get ready for the rollout before it happens. The application process for PPP and EIDL loans will be open until March 31, but the money is expected to go fast. Please be ready!