Until March 9, businesses with fewer than 20 employees will have exclusive access to apply for PPP loans.
On February 22, 2021, the Biden-Harris administration announced the following changes to the PPP program to further promote equitable access to relief. Please click to read the White House Fact Sheet.
- Institute a 14-day period, during which only businesses with fewer than 20 employees can apply for relief through the Program.
- The 14-day period will start on Wednesday, February 24, 2021 at 9 am and end on March 9th, 2021. Loans with 20 or more employees will be rejected during this period.
- All loans (regardless of employee count) submitted to SBA prior to February 24th will be processed as normal.
- Help sole proprietors, independent contractors, and self-employed individuals receive more financial support.
- A change to the calculation formula will be implemented to help sole proprietors, independent contractors, and self-employed individuals receive more financial support.
- Eliminate a restriction preventing small business owners with prior nonfraud felony convictions from obtaining relief through the PPP.
- Eliminate the rule that prevents small business owners who are delinquent on their federal student loans from obtaining relief through the Paycheck Protection Program.
- Allow non-citizen small business owners who are lawful U.S. residents to use individual taxpayer identification numbers (ITINs) to apply for relief.
Treasury/SBA are working on program changes and will communicate details throughout this week, according to a fact sheet provided by Georgia Primary Bank.
If you have questions regarding your PPPSD application please contact your assigned PPP Lender directly. Your lender will be able to answer Treasury/SBA policy questions, however lenders are unable to provide any tax or accounting advice outside of written Treasury/SBA guidelines. Georgia Primary Bank encourages borrowers to contact their CPA, Bookkeeper or the local Small Business Development Center for help with technical questions.
For business purchasers, there’s good news from the SBA. They’re offering loan payment subsidies for certain loans.
For new SBA 7(a), 504, or microloans approved by SBA beginning February 1, 2021 and ending on September 30, 2021, the SBA will make the monthly payments for a 3-month period. This was originally 6-month period, and this is subject to the availability of funds, according to GABB member Susan Kite, who is also Senior Vice President of SBA Business Development at Georgia Primary Bank.
Loans must be fully disbursed and in regular servicing before the payments can begin. New loans approved by SBA beginning February 1, 2021 and Ending on September 30, 2021 will also have the SBA Guaranty Fee Waived, according to Kite.
“This is a savings of $13,500 on a $500,000 loan, or $31,500 on a Million-Dollar loan, $65,000 on a $2 Million loan, and capped at $4,166,666 loan with 90% guaranty which saves $138,125,” Kite said.
These programs will remain as long as funding lasts, she says.
7(a), 504, and Microloans
As a part of the CARES Act, SBA was initially authorized to pay 6 months of principal, interest, and any associated fees that borrowers owe for all 7(a), 504, and Microloans reported in regular servicing status (excluding PPP loans). This debt relief to borrowers was originally dependent on the loan being fully disbursed prior to September 27, 2020 and does not apply to loans made under the Economic Injury Disaster Loan (EIDL) program.
These original provisions were amended on December 27, 2020 through the Economic Aid to Hard-Hit Small Businesses, Non-Profits and Venues Act (Economic Aid Act). The Economic Aid Act revised the eligibility criteria for assistance to include all 7(a), 504, and Microloans approved up to September 27, 2020 even if not fully disbursed. All other provisions for initial debt relief remained the same.
Borrowers need not apply for this assistance. SBA provides this assistance automatically as provided below:
- For loans not on deferment, SBA will make monthly payments based on the next payment due on eligible loans for a total amount equivalent to no more than 6 months of installment payments.
- For loans currently on deferment, SBA will begin making monthly payments with the first payment due after the deferment period ends for a total amount equivalent to no more than 6 months of installment payments.
SBA has notified 7(a), 504, and Microloan Lenders that it will pay these borrower loan payments. Lenders are to report to SBA periodically on the amounts due once a loan is fully disbursed. Payments collected after March 27, 2020 may be applied to the outstanding loan balance or returned to the borrower at the borrower’s discretion.
Additional Debt Relief Assistance
The Economic Aid Act also authorized additional debt relief payments to 7(a), 504, and Microloan borrowers beyond the 6-month period prescribed in the CARES Act. The level of assistance varies based on when the loan was approved and will begin on or after February 1, 2021. Please contact your Lender for questions on the availability of this assistance for your SBA loan.
THE INITIATIVES DESCRIBED ABOVE ARE LIMITED TO THE LEVEL OF AVAILABLE FUNDING PROVIDED BY CONGRESS.
For current SBA Serviced Disaster (Home and Business) Loans: If your disaster loan was in “regular servicing” status on March 1, 2020, the SBA is providing automatic deferments through March 31, 2021.
What does an “automatic deferral” mean to borrowers?
- Interest will continue to accrue on the loan.
- 1201 monthly payment notices will continue to be mailed out which will reflect the loan is deferred and no payment is due.
- The deferment will NOT cancel any established Preauthorized Debit (PAD) or recurring payments on your loan. Borrowers that have established a PAD through Pay.Gov or an OnLine Bill Pay Service are responsible for canceling these recurring payments. Borrowers that had SBA establish a PAD through Pay.gov will have to contact their SBA servicing office to cancel the PAD.
- Borrowers preferring to continue making regular payments during the deferment period may continue remitting payments during the deferment period. SBA will apply those payments normally as if there was no deferment.
- After this automatic deferment period, borrowers will be required to resume making regular principal and interest payments. Borrowers that cancelled recurring payments will need to reestablish the recurring payment.
If you have questions about your current loan and whether or not your loan is automatically deferred, please contact your Loan Servicing Office directly using the following information:
- Birmingham Disaster Loan Servicing Center:
- Phone: 800-736-6048
- Email: BirminghamDLSC@sba.gov
- El Paso Disaster Loan Servicing Center:
- Phone: 800-487-6019
- Email: ElPasoDLSC@sba.gov
ATLANTA–With vaccine rollout underway and picking up steam concurrent to emerging virus variants, Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s Robinson College of Business said recovery remains “an economic tango led by the virus. Reaching a sustained recovery by early 2022 is contingent on the speed and efficacy of vaccinations by mid-2021.”
“There is light at the end of the tunnel but it will take time, with ‘proper’ benefits to come as more people are vaccinated successfully,” Dhawan said. “We must relearn to walk before we can run again. This major biological shock rattled economic foundations.”
Assessing the past impact of stimulus payments, the forecaster pointed out that consumers spent them “rationally.”
“The most vulnerable who had to spend the checks last spring and this winter did so. Others who could afford to save, banked the funds or timed purchases to smoke out retailer incentives spurred by a Covid-19 sales slump in November and December.”
Consumer spending is beginning to return, with away-from-home food purchases up 4.4 percent, and sales of used cars and trucks up 10 percent year-over-year. Also rising: sales of watches and jewelry, which dropped 50 percent during the first two months of the pandemic. Today, watch and jewelry sales are up 20 percent over this time last year.
“Who’s buying all these watches and jewelry? We don’t know. But couples who have been confined together at home and perhaps postponed weddings, may be spending money they saved on peace offerings,” said Dhawan.
Proposed federal-level spending, immaterial of amount, will boost consumer spending for only a short while, followed by an inevitable reversion to the mean in subsequent quarters as stimulus funds run out.
“Real recovery will depend on people feeling comfortable interacting with each other – eating out, attending meetings, going to movies and concerts, and sightseeing,” said Dhawan.
Georgia and Atlanta did not take as hard a job-loss hit as the nation overall when the coronavirus shut down the economy in spring 2020. U.S. employment plunged 14 percent, compared to an 11 percent drop in Georgia. The area’s recovery also has been faster than the nation’s, which Dhawan attributed to Georgia’s relatively brief shutdown compared to the rest of the nation (notably California and Northeastern states).
“Today, the U.S. economy is down six percent by the employment metric, compared to only two percent in Georgia,” Dhawan said at a Feb 25 conference. “That sounds good until one takes a closer look at the performance of the state’s catalyst sectors of well-paying jobs, which is where job growth starts and the multiplier effect fuels downstream activity.”
The forecaster explained that the crucial catalyst sectors – corporate jobs, information technology, business services, manufacturing and transportation – experienced the same sharp eight percent drop in jobs in Georgia as experienced in the U.S. And when it came to recovery, Georgia has not outpaced the nation in this critical income generating category.
“Net-net, the overall job recovery deficit may be only 20 percent. But for high paying jobs it is close to 50 percent. Quality of jobs is a metric by which recovery still lags in the state,” said Dhawan.
One area where economic forces seem to be immaterial at the moment is homebuying, with more purchasers opting to buy single family homes further out instead of high-rise condominiums in the city’s core. How long this change in preference, or demand shock, will last is unknown.
“The rocket recovery of the stock market last spring that has continued into 2021, in conjunction with sharply falling mortgage rates, has helped consumers purchase homes.”
The Federal Reserve dropped its benchmark rate to near zero in March 2020, with subsequent quantitative measures to help shore up the mortgage market, making clear it will not raise rates until recovery fully takes hold.
“The Fed will stand pat until at least until 2023 or even later. But mortgage rates will start rising this year as the long-bond yield climbs in coming quarters. This is not just due to mild inflationary conditions expected from the consumer binge due to additional fiscal stimulus,” said Dhawan.
“The reason for a rise in bond yields is classic demand and supply of investable funds when looked at from a global perspective,” Dhawan said. “As we recover, and so does the rest of the world, rising demand for capital expenditures/investment spending by corporations that is a precursor to job growth will put upward pressure on mortgage interest rates.”
“Whether or not the housing boom continues and outlasts the coronavirus crisis hinges on stock market performance, which is a random factor in this recovery story,” said Dhawan.
Highlights from Rajeev Dhawan’s Economic Forecast
- Overall GDP growth will be 4.9 percent in 2021, 3.9 percent in 2022 and 2.9 percent in 2023.
- Investment growth will be only 7.2 percent in 2021, 5.4 percent in 2022 and 6.1 percent in 2023. Monthly job gains will be 298,000 in 2021, rise to 414,000 in 2022 and moderate to 202,900 in 2023.
- Housing starts will average 1.474 million in 2021, 1.339 million in 2022 and 1.272 million in 2023. Vehicle sales will average 16.7 million in 2021, 17.0 million in 2022 and 17.4 million in 2023.
- CPI inflation will be 2.3 percent in 2021, rise to 2.6 percent in 2022, and then moderate a bit to 2.4 percent in 2023. The 10-year bond rate will average 1.6 percent in 2021, 2.2 percent in 2022 and 2.6 percent in 2023.
Georgia and Atlanta
- Georgia will add 68,900 jobs (13,200 premium jobs) in 2021, gain a better 100,000 jobs (33,700 premium) in 2022 and increase by 77,100 (19,700 premium) in 2023.
- Nominal personal income will grow 4.0 percent in 2021, moderate to 0.6 percent in 2022 and rise 4.2 percent in 2023.
- Atlanta will add 54,000 jobs (11,900 premium positions) in 2021, grow by 86,600 jobs (29,400 premium) in 2022 and a further 64,900 jobs (17,000 premium) in 2023.
- Atlanta housing permitting activity will increase by 5.8 percent in 2021, decline mildly by 0.6 percent in 2022, then rise by 3.0 percent in 2023.
The Affordable Care Act Open Enrollment period has reopened (Feb 15 – May 15th)
By Bob Smith, GABB Affiliate and Licensed Health & Life Insurance Agent
It has been almost 12 months since we began experiencing challenges brought to bear by the COVID-19 virus. The challenges have been on multiple fronts leaving few people unscathed. Due to no fault of their own, many individuals have been impacted by business closures creating an unenviable reality of lost employer sponsored group health insurance. Being able to afford monthly premiums with the loss of income can make shopping for health insurance devastating. This at a time when being without health coverage can cause a family a medical and financial crisis.
The Federal Government recently addressed this potentially dire situation by reopening of the Affordable Care Act Open Enrollment period. Effective February 15 thru May 15 individuals have an opportunity to select health insurance on the Federal Marketplace at healthcare.gov. Subsidies based upon estimated 2021 income can lower monthly premiums making the health plans affordable during this difficult time.
No one can anticipate the unexpected and being without health insurance creates a vulnerable situation. In order to avoid the medical and financial consequences of an illness, accident or injury it’s important to be proactive before the window of opportunity closes.
Selecting coverage that addresses a family budget can present pitfalls while there are resources to help avoid making a mistake in the plan selection process. The process can be confusing when considering provider networks, copays, deductibles and out of pocket maximums, etc. With this in mind consider utilizing the services of a licensed Georgia Insurance Agent who also has been certified by the Federal Government to represent the insurance companies on the Marketplace. In most cases the services provided by agents is at no cost to individuals as they are compensated by the insurance companies.
The Affordable Care Act Open Enrollment will end on May 15 for plans issued June 1, and applications submitted in March will be issued in May. The time to be proactive to secure health insurance is now.
Bob Smith, Licensed Health & Life Insurance Agent
Despite the challenges posed by the pandemic in 2020, many Georgia business brokers continued to sell more than a million dollars worth of businesses. GABB board member Tanya Nebo and six members of the GABB Million Dollar Club offered a wide variety of advice on Tuesday, Feb. 23, during a panel discussion of how to buy and sell businesses during a pandemic.
To view their comments on how they prospered in 2020, watch this video posted on GABB’s new YouTube channel.
Among the 2020 members of the GABB’s Million Dollar Club who will be on hand on Feb. 23 are Jefffery Merry, senior business analyst at the BUSINESS HOUSE, inc.; J. Snypp, Vice President of Preferred Business Brokers, Inc.; Matt Wochele, founder of Preferred Business Brokers, Inc.; Rob Margeton, an M&A Intermediary with Ryco Advisors, LLC; Brian Judson, a business broker with Best Business Brokers; and Jon Roman, business intermediary, franchise consultant and developer at Transworld Business Advisors.
Ms. Nebo is both a business broker and an attorney. Her law practice, real estate agent and business brokerage services focus on commercial real estate, franchising and general business matters (including joint ventures and equity participation models). She is a graduate of Columbia University in New York and the University of Virginia School of Law.
The GABB is the state’s premier association of professionals who help in the purchase and sale of businesses. GABB is committed to promoting professionalism, education and high ethical standards in the profession of business brokering.
For more information, contact GABB President Judy Mims at 404-842-1997 or email@example.com, or Ms. Loupe at firstname.lastname@example.org or 770-744-3639.Read More