LEGISLATIVE COMMITTEE

Legislative Committee Update and Special Presentation

Presentation:COVID 19 Economic Stimulus

Update

Presented by:Governmental Committee

Darrell Amberson, Chair, Lamettry’s CollisionBob Redding, Vice Chair, Automotive Service AssociationJanet Chaney, Vice Chair, Cave Creek Business Development Brandon Thomas, GMG EnviroSafe, IncJeanne Silver, CARSTAR MundeleinJohn Eck, General MotorsRussell Thrall, Collision WeekStephan Regan, Regan StrategiesSteve Daniel, Lamettry’s Collision Chad Sulkala, Allstate

Governmental Committee Members

• U.S. House of Representatives Passed the HEROES Act or 5th COVID-19 Economic Stimulus Bill

• U.S. Senate is working on their 5th Stimulus bill.

• Congress is expected to pass a 5th COVID-19 Economic Stimulus bill by early August.

Legislative Update

Sonia Smith

U.S. Small Business Administration

Presenter

The SBA works to ignite change and spark actionso small businesses can

START • GROW • EXPAND • RECOVERInformation continues to be updated on the CARES Act. This information is current as of July 15, 2020. Please check SBA.gov/coronavirus for the most up-to-date information.

SBA’s March 17 Disaster Declaration Makes LoansAvailable Due to the Coronavirus (COVID-19)

SBA Administrator JovitaCarranza

U.S. SMALL BUSINESS ADMINISTRATION

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• 1-year deferment of payments on Economic Injury Disaster Loans provided due to COVID-19

• Automatic deferment of payments on previous disaster loans for homeowners, renters, and businesses through Dec. 31, 2020

• Monthly payments made by SBA on 7(a), 504 and SBA Microloans in regular servicing status through Sept. 27, 2020

• Six monthly payments made by SBA on new 7(a), 504 and SBA Microloans funded through Sept. 27, 2020

• Emergency Capital Programs:• Economic Injury Disaster Loans• Paycheck Protection Program

Assistance From SBA Resource Partners

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Free assistance with preparing financial statements, submitting loan applications, and reopening/recovery tools are available from any of SBA’s partners:

Locate Partner: https://www.sba.gov/local-assistance

• Small Business Development Centers (SBDCs)https://americassbdc.org

• SCOREhttps://www.score.org/

• Women’s Business Centers (WBC)

• Veteran’s Business Outreach Centers (VBOC)

U.S. SMALL BUSINESS ADMINISTRATION

What businesses are eligible to apply?

SBA’s Economic Injury Disaster Loan Basics

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• Small businesses, including small agricultural and aquaculture businesses

• Most private non-profit organizations, faith-based organizations, and houses of worship

• Sole Proprietors and Independent Contractors• Owners of rental property

U.S. SMALL BUSINESS ADMINISTRATION

What are some of the businesses that are ineligible ?• Businesses involved in an illegal activity on the federal level (marijuana).• Businesses that derive more than 1/3 of their annual gross revenue from

legal gambling activities• Passive businesses owned by developers• Private clubs and businesses that limit the number of memberships for

reasons other than capacity• Businesses of a prurient sexual nature• Speculative Businesses

How much can I borrow?• Eligible entities may qualify for loans up to $2 million

The interest rates and term for this disaster loan are:• 3.75% for small businesses • 2.75% for nonprofit organizations• The loan term is 30 years and there is no penalty for pre-payment

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SBA’s Economic Injury Disaster Loan Terms

How can I use the loan funds?• These EIDL (working capital) loans may be used to pay fixed debts,

payroll, accounts payable, and other bills that could have beenpaid had the disaster not occurred

• These loans are not intended to replace lost sales or profits or forexpansion

U.S. SMALL BUSINESS ADMINISTRATION

• SBA’s Economic Injury Disaster Loan (EIDL) funds come directly from the U.S. Treasury

• Applicants do not go through a bank to apply. Apply directly to SBA’s Disaster AssistanceProgram at: https://covid19relief.sba.gov/#/

• There is no obligation to take the loan if offered

• Collateral is required for loans over $25,000

• There is no real estate collateral required. A blanket UCC-1 will be filed against the business collateral

• Personal guarantees are required for loans greater than $200,000

• Applicants can have an existing SBA Disaster Loan and still qualify for an EIDL for this disaster, but the loans cannot be consolidated

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SBA’s EIDL Working Capital Loans Are Different From Other SBA Loans

U.S. SMALL BUSINESS ADMINISTRATION

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U.S. Small BusinessAdministration

DisasterAssistanceUpdate Nationwide EIDL Loans & EIDL Advances

July3,2020

SBA Disaster Assistance Update NationwideEIDLLoans/COVID-19

Loans Approved 2,235,192 Dollars Approved $134,631,289,182

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July 3, 2020

Figures as of 7/2/20

STATE APPROVED DOLLARS STATE APPROVED DOLLARSAlabama 25,774 $ 1,374,690,477 Kansas 13,152 $ 807,096,050Alaska 5,780 $ 358,772,700 Kentucky 16,249 $ 908,776,900Arkansas 13,401 $ 734,774,819 Louisiana 40,513 $ 2,273,821,400Arizona 39,270 $ 2,312,317,562 Maine 7,839 $ 473,388,300California 370,254 $ 24,828,709,998 Maryland 37,153 $ 2,264,399,000Colorado 39,244 $ 2,409,328,749 Massachusetts 39,740 $ 2,574,141,000Connecticut 23,224 $ 1,540,612,300 Michigan 50,915 $ 3,083,547,472Delaware 5,656 $ 355,514,700 Minnesota 28,283 $ 1,757,129,242Florida 233,942 $ 12,472,503,191 Mississippi 17,221 $ 856,144,701Georgia 93,367 $ 4,884,880,055 Missouri 26,420 $ 1,487,323,700Hawaii 13,970 $ 787,482,700 Montana 7,596 $ 430,005,200Idaho 9,010 $ 516,949,900 Nebraska 10,030 $ 627,019,702Illinois 83,716 $ 4,671,067,629 Nevada 24,587 $ 1,528,956,480Indiana 24,833 $ 1,428,377,005 New Hampshire 8,250 $ 528,187,600Iowa 11,522 $ 750,336,750 New Jersey 74,405 $ 4,912,614,744

July 3, 2020

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STATE APPROVED DOLLARS STATE APPROVED DOLLARSNew Mexico 10,219 $ 589,004,723 Utah 16,590 $ 1,087,111,457New York 175,840 $11,399,784,029 Vermont 4,749 $ 270,274,910North Carolina 55,239 $ 3,046,460,512 Virginia 46,776 $ 2,867,772,966North Dakota 4,334 $ 287,722,800 Washington 45,347 $ 2,972,541,353Ohio 49,506 $ 2,832,085,720 West Virginia 5,347 $ 303,388,300Oklahoma 21,338 $ 1,268,587,742 Wisconsin 25,199 $ 1,405,432,200Oregon 28,043 $ 1,657,808,240 Wyoming 3,767 $ 232,636,000Pennsylvania 61,690 $ 3,641,336,382 American Samoa 98 $ 6,242,600Rhode Island 6,733 $ 400,357,700 District of Columbia 5,651 $ 423,111,999South Carolina 28,602 $ 1,523,552,546 Guam 1,084 $ 64,267,600South Dakota 5,531 $ 342,101,195 N. Mariana Islands 217 $ 14,077,600Tennessee 32,303 $ 1,786,815,454 Puerto Rico 13,664 $ 764,712,400Texas 190,853 $11,436,566,228 U.S. Virgin Islands 1,156 $ 68,666,500

Loans Approved 2,235,192 Dollars Approved $134,631,289,182

Figures as of 7/2/20

SBA Disaster Assistance Update NationwideEIDLLoans/COVID-19

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FIGURES AS OF 7/2/20

Advances Disbursed 4,946,997 Total Dollars $ 16,291,107,000

July 3 2020

STATE APPROVED DOLLARS STATE APPROVED DOLLARSAlabama 60,505 $

200,047,000

Kansas 29,736 $ 92,433,000

Alaska 9,878 $ 31,051,000 Kentucky 38,651 $ 123,258,000Arkansas 31,142 $ 103,758,000 Louisiana 86,888 $ 285,659,000Arizona 82,381 $ 273,786,000 Maine 16,351 $ 51,331,000California 716,698 $ 2,261,317,000 Maryland 81,354 $ 267,569,000Colorado 81,579 $ 248,706,000 Massachusetts 89,075 $ 289,557,000Connecticut 47,545 $ 149,511,000 Michigan 110,184 $ 396,754,000Delaware 12,434 $ 42,132,000 Minnesota 66,001 $ 222,921,000Florida 547,189 $ 1,586,324,000 Mississippi 40,742 $ 140,193,000Georgia 225,502 $ 766,256,000 Missouri 64,121 $ 210,217,000Hawaii 27,026 $ 79,014,000 Montana 16,592 $ 49,477,000Idaho 18,979 $ 58,362,000 Nebraska 25,089 $ 73,439,000Illinois 252,595 $ 1,192,958,000 Nevada 52,242 $ 167,347,000Indiana 63,290 $ 245,849,000 New Hampshire 16,752 $ 56,457,000Iowa 27,553 $ 86,215,000 New Jersey 156,700 $ 495,935,000

SBA Disaster Assistance Update NationwideEIDLLoans/COVID-19

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FIGURES AS OF 7/2/20

July 3, 2020

STATE APPROVED DOLLARS STATE APPROVED DOLLARSNew Mexico 20,093 $ 65,887,000 Utah 32,086 $ 106,684,000

New York 392,366 $1,143,721,000 Vermont 11,034 $ 34,598,000

North Carolina 122,265 $ 395,773,000 Virginia 102,424 $ 336,664,000North Dakota 10,220 $ 31,451,000 Washington 89,071 $ 284,946,000

Ohio 111,129 $ 385,698,000 West Virginia 11,681 $ 38,336,000

Oklahoma 47,591 $ 144,626,000 Wisconsin 60,213 $ 215,895,000Oregon 54,300 $ 173,314,000 Wyoming 8,589 $ 26,332,000

Pennsylvania 145,332 $ 487,047,000 American Samoa 189 $ 1,061,000Rhode Island 14,753 $ 46,400,000 District of Columbia 11,731 $ 42,789,000

South Carolina 63,099 $ 201,133,000 Guam 1,421 $ 5,944,000South Dakota 13,428 $ 38,909,000 N. Mariana Islands 246 $ 1,183,000

Tennessee 77,886 $ 271,276,000 Puerto Rico 16,860 $ 61,560,000

Texas 432,549 $1,496,124,000 U.S. Virgin Islands 1,667 $ 5,923,000

Advances Disbursed 4,946,997 Total Dollars $16,291,107,000

SBA Disaster Assistance Update NationwideEIDLLoans/COVID-19

Small Business Paycheck Protection Program

Who is eligible to apply for the PPP?• Small businesses with 500* or fewer employees• 501-C(3) non-profits, 501 C(19) veterans’ organizations, faith-based organizations, and

houses of worship• Sole proprietorships and self-employed persons• Independent contractors• Legal gaming enterprises• Agricultural enterprises

What are some businesses ineligible to apply for the PPP?• Businesses involved in an illegal activity on the federal level (marijuana).• Household employers (those who employ nannies or housekeepers)• Applicants or owners that are debtors in bankruptcy• Businesses with adequate sources of liquidity• Hedge Funds and Private Equity firms

PPP LOAN ELIGIBILITY

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U.S. SMALL BUSINESS ADMINISTRATION

What is the Paycheck Protection Program?• A loan offered through participating lenders• Find a lender at www.sba.gov/paycheckprotection/find• Designed to provide a direct incentive for small businesses to keep their workers on their

payroll

What can the funds be used for?• Pay up to 2.5 months of payroll costs, including benefits• Funds can also be used to pay interest on mortgages, rent, and utilities• Borrower has up to 24 weeks to expend the funds• The maximum loan amount calculation is the business 2019 average monthly payroll x

2.5

How will the PPP Loan be forgiven?• Fully forgiven when at least 60% of the funds are used for payroll• Forgiveness is based on the employer maintaining or quickly rehiring employees and

maintaining salary levels• Two Safe Harbor provisions due to reductions in payroll and reductions in employees

PPP OVERVIEW

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U.S. SMALL BUSINESS ADMINISTRATION

PPP SAFE HARBOR PROVISIONS

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U.S. SMALL BUSINESS ADMINISTRATION

Safe Harbor Provision 1:• Reductions in FTE employees for borrowers who are unable to return to the same

level of business at which they were operating before February 15, 2020, due to compliance with COVID-19 requirements or guidance issued between March 1 and December 31, 2020 by HHS, CDC, or OSHA.

Safe Harbor Provision 2:• Reductions in FTE employees for borrowers unable to rehire employees or hire

similarly qualified employees for unfilled positions by December 31, 2020.

• Maximum loan amount is $10 million

• Interest rate is 1%

• First payment deferred to the date that SBA remits the forgiveness amount to the borrower’s lender OR, 10 months after the end of the borrower’s loan forgiveness covered period if the

borrower does not apply for loan forgiveness

• Loan maturity 2 years if loan approved before June 5 5 years if loan approved after June 5

• No collateral requirements

• No personal guarantees required

• No borrower or lender fees payable to SBA

• Program available through August 8, 2020

PPP LOAN TERMS

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U.S. SMALL BUSINESS ADMINISTRATION

• The borrower completes and submits• The Loan Forgiveness Application, (SBA Form 3508 or lender equivalent) to its lender (or

the lender servicing its loan)• Schedule A• Documentation of payroll costs, non-payroll costs, and FTE’s.

• The lender reviews the application and makes a decision regarding loan forgiveness.

• The lender has 60 days from receipt of a complete application to issue a decision to SBA.

• SBA has 90 days for its review.

• The lender notifies the borrower of the forgiveness amount.

• If only a portion of the loan is forgiven, or if the forgiveness request is denied, any remaining balance due on the loan must be repaid by the borrower on the loan terms.

PPP LOAN FORGIVENESS PROCESS

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U.S. SMALL BUSINESS ADMINISTRATION

DisasterAssistanceUpdate Nationwide PPP Approvals

July10,2020

Loan Size Loan Count Net Dollars % ofCount

% ofAmount

$50K and Under 3,289,259 $58,924,317,548 67.0% 11.4%>$50K - $100K 673,105 $47,925,204,459 13.7% 9.3%>$100K - $150K 290,329 $35,534,531,720 5.9% 6.9%>$150K - $350K 374,674 $84,089,961,753 7.6% 16.3%>$350K - $1M 198,518 $112,914,656,802 4.0% 21.8%>$1M - $2M 52,931 $73,475,210,072 1.1% 14.2%>$2M - $5M 24,164 $71,909,398,898 0.5% 13.9%>$5M 4,675 $32,644,004,921 0.1% 6.3%

LoanSize

* Overall average loan size is: $105K.126

APPROVALS THROUGH

07/10/2020

THANK YOU FOR YOUR TIME

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U.S. SMALL BUSINESS ADMINISTRATION