We recognize the immense challenges facing small businesses as a result of the Coronavirus crisis. It is our goal to be as helpful and as supportive as possible to get through this difficult time.
We will continue to update this page as additional information comes available.
Stimulus Package #2:
Consolidated Appropriations Act
The 2021 Consolidated Appropriations Act, a $900 billion COVID relief package combined with $1.4 trillion government-wide funding, was passed by congress and signed into law. The COVID relief portion of the legislation includes many provisions for small businesses, including:
► Enhancements to 504 Refinance Program
► Temporary Fee Reduction for the 504 Loan Program
► Extension of CARES ACT payment subsidies for 504 loan payments
► New PPP Relief Program
We’ve summarized some of the key provisions below.
What you need to know about the new SBA 504 Refinance Program
More businesses are eligible:
The loan to be refinanced only needs to have been in place for 6 months, rather than 2 years
The 504 Program can now refinance SBA 7a loans
12 months of current payments is no longer an eligibility criteria, it is reviewed as part of the credit decision
For borrowers with SBA 504 loans:
For one year from Dec. 27, 2020 borrowers can refinance the first trust deed and take cash out to be used for business needs, rather than exclusively used on their building
Total financing: up to 90% LTV when combined with the 504 second mortgage
Temporary Fee Reduction for 504 Program
Fee reductions for new 504 loans approved from the date of enactment of the new law (Dec. 27, 2020) through Sept. 30, 2021
Waives 0.5% Third Party Lender Participation Fee on loan in senior lien position in 504 project
Waives 1.5% CDC processing fee (in debenture pricing)
SBA guidance expected to address handling of all loans currently in process at SBA
The Act appropriates $3.5 billion to extend the small business debt relief program established by the CARES ACT.
For SBA loans approved prior to CARES Act (March 27, 2020) borrowers receive the following:
6 months of payment subsidies
Funded borrowers & borrowers coming off deferment may have already received or been allocated this relief under original CARES Act
3 months of payment subsidies starting February 1, 2021 capped at $9,000 per loan per month
Additional 5 months (after 3-months) payment subsidies for loans to “underserved” and “hard hit” industries, capped at $9,000 per loan per month
Community Advantage loans and microloans
For SBA loans approved and funded during original CARES ACT (March 27, 2020 – September 27, 2020) borrowers receive the following:
6 months of payment subsidies
For SBA loans approved (September 27, 2020 – January 31, 2021) borrowers receive the following:
No payment subsidies
Why? Congressional intent of the CARES Act is to provide “relief” to existing borrowers in place at the onset of the pandemic and to stimulate new loans that would not otherwise occur because of the pandemic
For NEW SBA loans approved (February 1, 2021 – September 30, 2021) borrowers receive the following:
6 months of payment subsidies, capped at $9,000 per loan per month
Paycheck Protection Program
TMC Financing will be processing Second Draw PPP loans of up to $500,000 to all qualified borrowers who have an existing PPP Loan with TMC.
Businesses that received a First Draw PPP Loan can apply for a Second Draw PPP Loan if they experienced a drop of at least 25% in 2020 revenue over the same time period in 2019
PPP borrowers must have used all of their First Draw PPP Loan on or before the expected date on which the Second Draw PPP Loan is disbursed
The full amount of the First Draw PPP Loan must have been spent on permitted authorized costs
The new PPP Program is authorized by SBA through March 31st, 2021
The maximum loan amount for a Second Draw PPP Loan is equal to 2 1/2 months of the borrower’s average monthly payroll
For restaurants and businesses in the hospitality industry, the maximum loan amount can be as much as 3-1/2 months of average monthly payroll
If a Second Draw PPP borrower used its 2019 figures to determine its First Draw PPP Loan amount and uses its 2019 figures to determine Second Draw PPP loan amount, TMC will not need any additional documentation to substantiate payroll costs
For Second Draw PPP Loans less than $150,000 PPP borrowers must submit the revenue reductions documentation EITHER at application or when it applies for PPP Loan forgiveness. For Second Draw PPP Loans greater than $150,000, PPP borrowers must submit documentation at the time of application
Expenses paid for with PPP loan proceeds, are deductible from federal taxes
A simplified forgiveness application for loans under $150,000 is expected to be released soon
EIDL: The $1,000 – $10,000 grant received by EIDL borrowers will no longer be deducted from PPP loan forgiveness.
Please review our PPP Loan Forgiveness FAQs to learn more about the forgiveness application process and note that we will send an email invite to apply for Second Draw PPP Loans as soon as the TMC application portal is open. For questions surrounding PPP, please email or call 415.655.5480.
*All information above is subject to full pending SBA implementation guidance – required regulations, notices and revised forms. We expect more information to be available as we get closer to the February 1, 2021 proposed start date. TMC will provide further updates at that time.