Second round of PPP applications opens – Memphis Local, Sports, Business & Food News

When Miles Tamboli opened his Midtown restaurant, Tamboli’s Pasta & Pizza, in November 2019, he had no idea what next year would hold for him and his business.

“We only had dinner for the first five months,” he said.

Tamboli quickly pivoted its business model in March when restaurants were closed under COVID-19 “Safer at Home” orders, offering take-out, curbside pickup and delivery.

He also turned part of his business into a small grocery store, which he says helped him get through the first months of the pandemic.

“I was a farmer before I started the restaurant,” Tamboli said. “My friends are people who make food. It was quite easy to bring this food into the restaurant to distribute it and make up a little for what people weren’t able to get at the grocery store.

To help keep the business going, Tamboli took advantage of the first round of Paycheck Protection Program (P3) funds, which was the “right amount” for eight weeks payroll.

However, the pandemic lasted much longer than expected.

“I have a degree in public health, which I thought I would never use,” he said. “It turns out that was a very good thing for our current circumstances. “

Tamboli has spent 100% of the PPP funds on the payroll and is confident the loan will be canceled.

“It wasn’t quite enough to really cover everything, but it was enough to keep us from going bankrupt.”

As the next round of PPP relief opens for nominations, Tamboli plans to apply and use the funds to keep its staff employed. Originally, Tamboli employed between 35 and 36 people and now has only around 20.

“We have new employees who were in a very difficult financial situation before they found a job, and it makes me nauseous to think about what might happen if things go badly financially,” he said. “Our philosophy is to take care of our employees, to keep them healthy and to keep them paid.”

Rory Thomas is Executive Director of the Tennessee Small Business Development Center located at Southwest Tennessee Community College. These satellite offices located across the United States are the largest providers of Small Business Administration (SBA) resources. There are 14 in the state of Tennessee.

“This (PPP funds) is another lifeline for many small businesses going into 2021, especially with different industries that have had to shut down or limit capacity,” Thomas said.

Here are some major changes to the second draw for PPP funds:

  • Borrowers can set their coverage period to spend PPP funds from eight to 24 weeks;
  • PPP loans can cover additional expenses beyond payroll, including operating expenses, property damage costs, supplier costs, and worker protection expenses;
  • Eligibility is broadened to include 501 (c) (6) entities such as chambers of commerce, housing co-ops, direct marketing organizations and others;
  • The PPP offers greater flexibility for seasonal employees;
  • Some existing PPP borrowers may request to change their PPP First Draw loan amount;
  • And some existing PPP borrowers are now eligible to apply for a second draw PPP loan.
  • Another change, according to Thomas, is that businesses must have experienced a 25% drop in revenue in any quarter of 2019 compared to the same quarter in 2020 if they submit a second application or loan funds. additional. The first PPP draw required no evidence of declining revenue or declining sales.
  • In addition, if the amount of the PPP loan application is less than $ 150,000, companies only have to “self-certify”. “If it’s over $ 150,000, you have to provide evidence to the SBA via tax returns and other documents,” Thomas said.

Thomas’ office also manages the Economic Disaster Loans (EIDL) and NEED Grants Authorized by the Economic Development Growth Engine for Memphis and Shelby County (EDGE).

Since the pandemic struck, its staff have been inundated, providing resources to more than 1,100 companies.

PPP loans offset losses from COVID-19 for small businesses

Daphnie Swift, President of A Cut Above Lawn Service Corp., participated in the first round of the PPP and is eager to apply for the second draw.

“This (PPP) has helped payroll and new requirements by just trying to keep everyone safe,” she said. “We need to secure the masks and disinfectant and ensure that the trucks are disinfected on a daily basis. “

She said her business lost $ 85,000 to $ 90,000 in revenue in 2020 due to COVID-19. Part was caused by the delay in the season due to business closures as well as the loss of a contract with the City of Memphis, which was canceled due to safety concerns.

Earlier last week, the SBA granted dedicated PPP access to Community Financial Institutions (CFIs), which include Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Corporations (CDC ) and microcredit intermediaries as part of the agency’s ongoing efforts. to reach underserved and minority small businesses.

PPP applications were opened for small lenders on Friday January 15 and opened to all lenders on Tuesday January 19.

<strong>Sean Henneberger</strong>“src =” “/><figcaption>
<p><strong>Sean Henneberger </strong></p>
<p>Sean Henneberger of Pinnacle Financial Partners, who processed about $ 2.4 billion in PPP First Draw loans to 14,000 clients, said the bank is “all-in” when it comes to helping clients, although not all details have been solidified.</p>
<p>“I think it’s going to be similar to those conversations we had with the first round of PPP – I think it’s going to continue to evolve,” Henneberger said.  “As a bank and a lender, we are just trying to provide the information as we have it.</p>
<p>“It’s kind of like that first wave (of PPP), there was a lot of speculation about what that would look like and then things changed more or less at the last minute.  At this point it’s kind of a waiting game, ”Henneberger said.  “The proposed bill has been passed, but there are adjustments to be made.  “</p>
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PPP loans: what you need to know

The SBA will cancel Paycheck Protection Program loans if all employee retention criteria are met and funds are used for qualifying expenses.

PPP First Draw Loan Settings for companies that have not applied for a PPP loan before:

The maximum amount you can borrow is equal to 2.5 times your average monthly salary costs or $ 10 million, whichever is lower.

PPP loans have an interest rate of 1%.

Loans issued before June 5, 2020 have a two-year maturity. Loans issued after June 5, 2020 have a term of five years.

Loan payments will be deferred for borrowers requesting loan forgiveness until the SBA remits the borrower’s loan forgiveness amount to the lender. If a borrower does not request a loan forgiveness, payments are deferred for 10 months after the end of the period covered for the borrower’s loan forgiveness (either 8 weeks or 24 weeks).

No personal guarantees or guarantees are required.

Neither the government nor the lenders will charge small businesses a fee.

Who may be eligible

Sole proprietors, independent contractors and independent workers;

Any small business that meets the SBA size standards (either the industry size standard or the alternative size standard);

Any business, 501 (c) (3) nonprofit, 501 (c) (19) veterans organization or tribal business (sec. 31 (b) (2) (C) of the Small Business Act) with the largest of: 500 employees, or that meets the SBA industry size standard if more than 500;

Any business with a NAICS code starting with 72 (accommodation and food services) that has more than one physical location and employs less than 500 per location.

Second draw PPP loan settings for companies that have already benefited from a previous PPP loan:

For most borrowers, the maximum amount for a second-draw PPP loan is 2.5 times the 2019 or 2020 average monthly salary costs up to $ 2 million. For borrowers in the Accommodation and Catering sector (use NAICS 72 to be confirmed), the maximum loan amount for a second-draw PPP loan is 3.5 times the 2019 or 2020 average monthly salary costs up to $ 2 million.

Who may be eligible

A borrower is generally eligible for a PPP Second Draw loan if they:

Has already received a PPP First Draw loan and will use or have used the full amount only for authorized uses;

Has no more than 300 employees;

And can demonstrate a reduction of at least 25% in gross revenue between comparable quarters in 2019 and 2020.

Source: US Small Business Administration

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