Rita Hansen was losing sleep and grappling with anxiety. Like many small business owners and startup CEOs, she spent the past several weeks submitting applications and waiting nervously for federal funding that could keep her Bend, Ore., company afloat amid the coronavirus crisis. Many entrepreneurs reported delays, bureaucratic hurdles, eligibility confusion, and other issues that made it difficult to apply for loans.

But this past Thursday, her CFO called. Onboard Dynamics was one of 1.6 million companies to land much-needed cash from the $349 billion Paycheck Protection Program, part of the $2 trillion CARES Act.

“I’m not a crier,” said Hansen. “But all the emotion just let go.”

The loan will help Hansen continue paying her 12 employees, who build natural gas compression machines used by commercial fleet vehicle operators. The 6-year-old startup had already reduced hours and executive salaries to trim expenses as all of its projects were paused.

“This is a lifeline so that we can keep the team intact,” Hansen told GeekWire. “We’re going to use this time to get some good work done and be well-positioned to not only survive, but to succeed.”

Onboard Dynamics’ story illustrates the federal relief program’s potential to make a meaningful difference for startups that might otherwise need to make deep cuts, or go out of business entirely, as COVID-19 shuts down large swaths of the economy. Many others were not so fortunate. PPP relief money ran out on Thursday, less than two weeks after the application process opened, leaving many companies frustrated with what seemed like a random process.

Allie Magyar, CEO at Vancouver, Wash.-based event management software startup Hubb, said her bank could not manage the loan volume and approval processes. Even though Hubb submitted applications as soon as possible, it did not receive funding.

“The process was difficult and confusing and frustrating,” Magyar said. “No one could tell us what was required, what forms to fill out, what process would look like. In the end, our bank flubbed our applications by batch processing loans, versus hand submitting, so none of them were processed.”

For many startups, the outcome is still unclear. “We applied, and the process was a mess — we’re still not certain of the results,” said Dan Shapiro, CEO of Seattle 3D laser printing startup Glowforge, in an email to GeekWire on Sunday night.

Jargon CEO Milkana Brace said her Seattle startup went through a “very confusing and time-consuming process” to apply for a PPP loan. The 9-person company received a “loan guarantee number” but is still waiting for final confirmation. Jargon already cut salaries and ended its office lease to help adjust for dramatically slowing customer engagement.

“The PPP loan would give us a small but meaningful boost in continuing to build the business and weather the storm,” Brace said.

Tyrone Poole, CEO of Portland housing startup OneApp, said he applied for PPP funding with multiple banks, but hasn’t received any confirmation of approval. His company, an online rental marketplace that helps renters pre-qualify for housing, has seen revenue drop by 50%. The 7-person startup furloughed two workers and cut salary for the remaining staff. Poole, a father of five daughters, is not taking salary for the foreseeable future.

“I feel helpless,” Poole said. “I feel like I’ve done everything I can and it amounts to nothing, except a bunch of ambiguity. It’s a hard place to be.”

One Seattle startup CEO said the process to apply for PPP funding was a “total shitshow.” The company applied as early as possible with several banks. The CEO wished to remain anonymous so as not to worry his employees.

“Ultimately we don’t feel like we have a clear understanding from anyone on the priority around how the funds are being allocated, and the timing around the allocation,” the CEO said. “As you can imagine, ‘wait and see’ is not an option for most small business owners at this time.”

Dan Price, CEO of Seattle payments technology company Gravity Payments, called the PPP a “catastrophic failure.”

The $349 billion relief package meant to save struggling small business from oblivion has run out of money. Let’s count the ways it was a catastrophic failure:

1. It served only 1.4M small business owners. In other words, 95.4% of small biz got $0https://t.co/6uZUu0vACf

— Dan Price (@DanPriceSeattle) April 16, 2020

Nearly 50,000 small businesses in Washington and Oregon will receive a combined $10.7 billion in PPP loans, according to the latest update from the Small Business Administration. Congressional lawmakers are working to unlock additional funds for the program but Democrats and Republicans have struggled to reach a compromise.

[Update: Lawmakers agreed Tuesday to provide an additional $310 billion to the PPP program.]

The National Federation of Independent Business last week said the federal government should issue another $400 billion in PPP loans, at least half of which should go to companies with less than 20 employees.

The PPP loans are forgivable for qualifying small businesses that retain their workforce or use the money to rehire laid-off employees. Businesses can apply for up to 250% of their monthly payroll.

The average loan size was $206,000, according to the SBA. The “professional, scientific, and technical services” industry garnered the most approved loans, with 208,360, and was second to construction in approved dollars, at $43.3 billion. There were 4,975 lenders.

Many venture-backed tech startups weren’t sure if they were eligible for PPP funding due to complex SBA “affiliation” rules related to their investors. A company may be deemed an affiliate of a larger entity, such as an investment firm, which could disqualify a PPP application. The National Venture Capital Association issued guidance for VC-backed companies earlier this month.

One Seattle startup we spoke with had its PPP application approved, but was considering not accepting the loan because the company is in the middle of fundraising and may no longer be in compliance. The CEO did not want to discuss the situation on the record given the uncertainty of the situation.

Another Seattle-based startup, Usermind, did not apply due to concerns about the PPP application requirements, said CEO Michel Feaster.

The PPP has also also sparked an ethical debate over whether investor-backed startups should apply when so many companies with fewer resources are struggling, such as mom-and-pop restaurants.

“My bank, the @sbagov, the @whitehouse and so many other banking institutions failed the small businesses of America,” top Seattle restaurateur Eduardo Jordan wrote in an Instagram post Saturday. “There was no infrastructure and still isn’t any to help those that need the most help.”

Companies with more than 500 employees are not eligible. That means that many of Seattle’s largest venture-backed tech startups, such as those near the top of our GeekWire 200 ranking of Pacific Northwest tech companies, can’t get PPP loans even if they are in need of the funds.

The SBA has some employee limit exceptions. Shake Shack, for example, got a PPP loan because of restaurant industry-specific rules. But it decided to return the funds as the company was able to access additional capital through an equity transaction in the public markets.

“The ‘PPP’ came with no user manual and it was extremely confusing,” Shake Shake’s chairman and CEO wrote in a LinkedIn post.

CBS News reported that Quantum, a publicly-traded computer storage company that had more than $400 million in sales last year, received a $10 million PPP loan. Quantum is based in Silicon Valley and has an office in Bellevue, Wash.; it lists more than 1,000 employees globally on LinkedIn.

GeekWire spoke with several startup founders last month who attributed their PPP application experience, good or bad, to the bank facilitating the loan. Ken Kamada, COO at aboutGOLF, said his longtime relationship with a Seattle-area community bank helped give his startup priority in the PPP process and land funding.

Dan Giuliani, CEO of Seattle fitness training startup Volt, said his company was able to secure a PPP loan last week. But it wasn’t easy.

“Some banks are simply not SBA-approved lenders and their clients were left out in the cold,” he said. “Others took too long to process applications and their clients missed out on loans through no fault of their own. I’m not sure I have a better solution in mind, to be honest, but it feels like there could have been a more equitable way to disperse the funding.”

Terry Peterson, CEO of Pacific West Bank in West Linn, Ore., told the Portland Business Journal that 100% of its applications were approved. His firm turned its office into a “quasi war-room” while Peterson relied on trade groups and his network for advice.

Contentious opinions! Rough experience all around but in dozens of convos w/ small biz (mostly tech/media) here’s #PPPloan first round

Winners
-TD Bank
-Chase
-Lendio
-Community Banks

Push
-Bank of America

Losers
-Silicon Valley Bank
-PNC
-Wells Fargo
-Capital One

Challenges?

— Christopher Wink (@christopherwink) April 17, 2020

Some entrepreneurs applied for the SBA’s Economic Injury Disaster Loan (EIDL), but many reported delays and confusion with changing guidance that limits loans to $15,000. Sue Sanford, CEO of Seattle-based B2B consulting firm Upstart Group, said her company received $4,000 from an EIDL advance but later found out that it will be applied to the PPP loan as a reduction in the forgivable amount for businesses.

Part of the issue is capacity. The SBA facilitated 63,000 loans amounting to $28 billion in the entire fiscal year 2019. Now the organization is lending nine times that amount — and possibly more — in a matter of weeks.

Washington state rolled out a $5 million emergency grant program earlier this month to help small businesses with up to 10 employees. The City of Seattle gave $10,000 to 250 small companies last week as part of its Small Business Stabilization Fund; nearly 9,000 had applied.

The delays in government loans could force startups to shut down, either temporarily or permanently, since it’s unclear when shelter-at home orders will loosen. Nearly half of small business owners believe it will take six months to a year for the U.S. economy to return to normal, according to a U.S. Chamber of Commerce survey.

The median small business in the U.S. has more than $10,000 in monthly expenses and less than one month of cash on hand, according to the National Bureau of Economic Research.

As companies wait for help, many are laying off staff. Nearly 270 tech startups have cut 25,000-plus employees since March 11. The Wall Street Journal reported that the “second round of coronavirus layoffs has begun,” noting that higher-skilled workers are now facing the real possibility of unemployment.

Analysts say venture capital funding will likely slow as some investors will be more skittish about plowing millions of dollars into companies, at least for the time being. The IPO market has slowed, and the same could happen for M&A, a recent report from PitchBook and NVCA noted. Valuations, particularly for late-stage companies, will likely “be challenged” over the next few months.

“Startups will see some options for federal relief from the CARES Act, while others will look to alternative means for cutting costs and capital infusion,” Bobby Franklin, president and CEO of NVCA, said in a statement. “The reality is that it will be a tough road ahead in 2020, but as we’ve seen in past downturns, resilience is in the fabric of this industry. Some of the most successful venture-backed companies were born in difficult times.”

Silicon Valley venture capital firm Sequoia Capital last month published the letter it sent to portfolio founders and CEOs titled “Coronavirus: The Black Swan of 2020.” The investment group told its entrepreneurs to “question every assumption about your business” related to cash, fundraising, sales forecasts, marketing, headcount, and capital spending.

Editor’s note: This story was updated with more comments from CEOs and founders. 

The results answered a question that has absorbed investors in the wireless industry since the Federal Communications Commission launched the auction in December. Purchases of licenses to use certain airwaves are among the biggest checks a mobile operator can make.

Wireless companies have captured growing chunks of the electromagnetic spectrum to meet growing customer demand for music, video, and software to stream to their smartphones. A shortage of assets can degrade service, putting a carrier at a competitive disadvantage.

Verizon and Competitors Improve 5G Services This Year After Apple Launch Inc.

latest iPhone and other devices that can support high speed specification. But Verizon’s need for the mid-range spectrum was seen as particularly acute after T-Mobile amassed a significant cache of similar assets through its purchase of Sprint in 2020.

Verizon, the country’s largest operator in terms of subscribers, has focused a large portion of its wireless investments on high-frequency millimeter wave spectrum in recent years. These licenses can support even higher internet speeds, but often struggle to transport data remotely.

The commission’s auction rules prohibit bidders from commenting on the process for several days. AT&T, Verizon and T-Mobile are expected to hold public briefings in March to brief investors on their long-term strategies, including their network upgrade goals.

The most recent spectrum sale offered cell phone companies, cable TV providers and other qualified bidders the opportunity to expand their wireless operations to C-band, a waveband previously reserved for satellite communications. The commission auctioned off 280 megahertz of the band, leaving the rest to satellite users in place and guard bands to block interference.

Strong demand for 5G-capable frequencies drove initial offerings to a record $ 80.9 billion. A second phase designed to sort out the types of licenses awarded to each bidder brought the total last week to $ 81.2 billion.

US Cellular regional mobile operator Corp.

USM 0.84%

offered $ 1.3 billion for licenses in certain areas. A subsidiary of private equity firm Grain Management spent slightly less than this amount.

The other expected bidders remained largely on the sidelines. A subsidiary of Dish Network Corp. made an offer of $ 2.5 million, suggesting that the satellite TV operator will leverage its existing spectrum cache to build a new 5G network from scratch. C&C Wireless Holding Co., a joint venture of cable operators Comcast Corp.

and Charter communications Inc.,

did not obtain any license.

Down payments on spectrum licenses are due March 10. Successful bidders will also spend about $ 14 billion more to cover the costs of satellite operators moving their operations to a narrower band of the spectrum.

The money pledged could have lasting effects on the companies that bought the licenses. AT&T recently took out a $ 14.7 billion loan to purchase spectrum, among other priorities. Verizon entered into a $ 25 billion term loan on Wednesday.

Carriers will use revenue from customers’ cell phone bills to pay off those debts over time. Businesses are generally expected to tout the broader benefits that 5G service offers to business devices, rather than smartphones, as justification for the spending spree.

“They have to tie some income to this huge check they write,” said John Hodulik, industry analyst at UBS Group. AG

.

Mr Hodulik said Verizon in particular will discuss the benefits that C-band spectrum offers to its home Internet customers. Combining the airwaves acquired this year with existing possessions of high-frequency spectrum could support a service that “could in fact be a competitor to cable,” he said.

The most recent auction was not the last chance for mobile operators to get mid-range spectrum. Jessica Rosenworcel, the acting chairman of the FCC, this week proposed a plan that would launch another auction for 100 megahertz of similar midrange spectrum in early October.

Write to Drew FitzGerald at [email protected]

This argument is not only academic

President Joe Biden has said that $ 10,000 is the most he can do to write off student loan debt. On Wednesday, the Progressive Democrats and Senate Majority Leader Chuck Schumer maintained calls for a loan forgiveness of up to $ 50,000 per student and said, “We will continue to fight.”

The dispute is the largest to have arisen within the party since it took control of the White House and both houses of Congress. “Canceling $ 50,000 in federal student loan debt will help close the racial wealth gap, benefit the 40% of borrowers without a college degree and help stimulate the economy.” It’s time to act. We will continue to fight, ”said a joint statement from Schumer and Senator Elizabeth Warren of Massachusetts. They argue that Biden can make this happen by executive order, rather than asking Congress.

A CNN town hall audience member on Tuesday night told Biden that student debt is “crushing” his friends and that “we need at least $ 50,000 minimum” to cancel the loan. Biden replied, “I won’t make it.” The president suggested on Tuesday that there might be legal limits on how much he can forgive. He also questioned the logic of giving a break to graduates of prestigious private schools – “people who went to Harvard, Yale and Penn” – rather than “using that money to provide early education to young people. young children from disadvantaged backgrounds. “(See a transcript from the town hall.)

White House press secretary Jen Psaki said on Wednesday that a legal review that will not begin until Merrick Garland is confirmed as attorney general will determine whether Biden has the power to overturn even 10,000 $ through executive action. She said Biden would be “eager to sign” a congressional bill for that amount. For relief over $ 10,000, she added, there should be considerations such as income.

Representative Alexandria Ocasio-Cortez (D-Bronx / Queens) rejected Biden’s argument against greater debt relief for graduates of high-end private schools. “Who cares what school someone went to? Entire generations of working class children have been encouraged to take on more debt under the guise of elitism. That’s wrong,” Ocasio tweeted. Cortez Wednesday. “Nowhere does it say we have to trade early childhood education for student loan cancellation. We can have both.

Biden, as mayor of Milwaukee on Tuesday, reiterated his support for the free community college and the free four-year public college for students from families earning $ 125,000 or less – proposals he brought forward during the election campaign.

He also extended the break triggered by the coronavirus pandemic on federal student loan payments and accrued interest until September, a temporary reprieve from the repayments crisis.

Trump: Rush and me and me

Former President Donald Trump ended nearly a month of televised silence on Wednesday by phoning Fox News to pay tribute to right-wing radio host Rush Limbaugh, who died aged 70 after a battle with lung cancer. From there, Trump slipped seamlessly to speak for himself.

“Rush thought we won, and so did I,” Trump exclaimed, echoing his false claims that the election was stolen from him. “I think we won a lot. And Rush thought we won.… A lot of other people think that way, but Rush felt it strongly.”

And then more on the scream that it was stolen: “I don’t think it could have happened to a Democrat. You would have had riots all over the place if it had happened to a Democrat.”

Was the riot on the US Capitol not enough?

Back on his relationship with Limbaugh: “I have a very beautiful weakness. I tend to like people who love me.”

Janison: McConnell as a survivor

Senate Minority Leader Mitch McConnell has established himself as Biden’s most important Republican opponent, writes Newsday’s Dan Janison. Trump’s insults and threats against McConnell from behind the scenes at Mar-a-Lago only strengthen the Kentucky senator’s new place in the power game.

Given that role, McConnell’s now famous public reshuffle in Trump’s second impeachment trial is easy to understand, even for those on both sides who do not forgive him. In voting to acquit Trump of inciting an insurgency, McConnell sided with the majority of his caucus, many of whom clearly had reason to fear a backlash if they voted otherwise. But in also condemning Trump’s conduct, McConnell said out loud what some of those members might have wished to say. Politics can be the art of cutting things both ways, and McConnell maintains a tight grip on partisan power.

By losing and then lying about it, Trump had likely cost Republicans a majority in the Senate. McConnell had no reason to continue to pretend to respect Trump, who appears poised to be as cynically divided within the GOP as he was across the country during his tenure.

A more pertinent question to come is how Schumer will manage to move the Biden agenda forward with a very slim majority. McConnell has no reason to downplay the extent to which his influence, in tandem with that of its members, survives in Trump’s absence.

Biden and Bibi break the ice

Four weeks after his inauguration, Biden had his first call as president with Israeli Prime Minister Benjamin Netanyahu. Readings on both sides were positive, although there are potential cracks ahead, such as Biden’s interest in reviving the Iran nuclear deal.

The two leaders were described as having spoken for about an hour and having had a “very warm and friendly” call, referring to their personal ties and saying they would work together to “continue to strengthen the unshakeable alliance” between the two countries , according to an Israeli statement.

The White House reading said Biden highlighted support “for the recent normalization of relations between Israel and countries in the Arab and Muslim world” that has progressed under Trump.

Biden open to study of repairs

Biden’s White House is supporting the study of reparations for black Americans, spurring Democratic lawmakers who are renewing their efforts to create a commission on the issue amid stark racial disparities highlighted by the coronavirus pandemic, a reported the Associated Press.

A House panel on Wednesday heard testimony about legislation that would create a commission to examine the history of slavery in the United States, as well as discriminatory government policies that affected former slaves and their descendants.

The commission would recommend ways to inform the American public of its findings and suggest appropriate remedies, including financial payments from the government to compensate descendants of slaves for years of unpaid labor by their ancestors.

Psaki said Biden would not wait for a study to address other issues arising from racism. “He understands that we don’t need a study to take action now against systemic racism, so he wants to take action within his own government in the meantime,” she said.

More news on the coronavirus

Read a summary of the latest regional pandemic developments in Long Island and beyond from Newsday’s reporting staff, written by Bart Jones. For a full list of Newsday’s coronavirus stories, click here.

What else is happening:

• CNN fact-checkers found that Biden made at least four statistical false statements during the network’s town hall event on Tuesday night. They concerned vaccinations against COVID-19, minimum wage, undocumented immigrants and the Chinese economy.
• A group of at least 20 Democrats Senators sent Biden a letter on Wednesday urging him to use his executive powers to expand voting rights protection and strengthen enforcement of campaign finance violations, The Washington Post reported.
• About a third of Americans military personnel refuse to receive COVID-19 vaccines when offered, Pentagon officials said Wednesday. Commanders scramble to smash internet rumors and find the right ground that will persuade troops to be shot.
• Former Chicago Mayor Rahm Emanuel and former Under Secretary of State for Political Affairs Nicholas Burns are among the top contenders for U.S. ambassador to China, Bloomberg News reported.
• Biden hosted union leaders at an Oval Office meeting on Wednesday to discuss its $ 1.9 trillion coronavirus relief and recovery plan, which is on hold in Congress, and upcoming proposals to invest in the country’s infrastructure .
• The controlled implosion of a demolition crew turned to dust the old Trump Plaza casino in Atlantic City on Wednesday. It was the first of the city’s three Trump casino hotels, all of which went bankrupt. (See images and video of the Atlantic City implosion.)

BEIJING / SHANGHAI (Reuters) – China’s central bank and three financial regulators held talks with senior leaders of Ant Group Co Ltd and its founder Jack Ma on Monday as Beijing released new draft rules for online microcredit.

The meeting comes after Ma questioned whether international financial regulations are right for the Chinese economy at a summit in Shanghai in late October.

Ant, backed by Alibaba Group Holding Ltd BABA.N9988.HK, is the dominant mobile payment company in China, also offering loans, insurance and asset management, and is expected to raise around $ 34.4 billion in the world’s largest initial public offering.

The People’s Bank of China, the China Securities Regulatory Commission (CSRC), the China Banking and Insurance Regulatory Commission and the foreign exchange regulator have held talks with the majority shareholder of Ant, Ma, its chairman. executive Eric Jing and its chief executive Simon Hu, the CSRC said in a statement, without giving details.

A spokeswoman for Ant said the company would “implement the meeting’s advice in depth.”

The draft microcredit rules, published separately by the central bank and the banking regulator, set a share capital threshold of 5 billion yuan ($ 748 million) for micro-lenders who offer loans online in different regions.

While it makes no mention of Ant, the project comes as regulators focus more on banks that heavily use micro-lenders or third-party tech platforms like Ant for underwriting consumer loans, in the middle. fears of an increase in defaults and a deterioration in asset quality in the event of a pandemic. hit the economy.

The project is open for public comment until December 2.

Guo Wuping, head of the consumer protection division at the banking regulator, said in a 21st Century Business Herald comment on Monday that the rights of users of consumer loan companies owned by Ant Huabei and Jiebei deserve consideration. attentive.

Guo in the commentary said that these fintech lending companies effectively perform the functions of banks and should adopt similar risk controls.

New methods of financing and disorderly competition have created “chaos that violates the rights and interests of financial consumers,” Guo said in the commentary.

The China Committee for Financial Stability and Development, a ministerial body headed by Vice Premier Liu He, on Sunday flagged the risks associated with the rapid development of fintech, in what has been widely interpreted as a government response to the rise of actors like Ant.

Most small business clients who have borrowed Paycheck Protection Program (P3) loans have now spent their loan proceeds and are beginning the process of calculating loan cancellation eligibility. This process has unfortunately become much more complicated than initially imagined.

Fortunately, small business customers who are at their wit’s end might get some relief. In early October, the Small Business Administration (SBA) released a simplified loan forgiveness request for borrowers with smaller loans.

Customers who borrowed $ 50,000 or less are eligible and should be made aware of what this valuable option can (and cannot) do before proceeding any further in the request for forgiveness.

Calculate PPP loan forgiveness: the basics

Complex rules about how and when loan proceeds are spent apply in calculating P3 loan forgiveness eligibility. The original rules of the CARES Act required that the loan proceeds be used within eight weeks of the loan inception date. The Paycheck Protection Program Flexibility Act (PPPFA) extended the period from eight weeks to 24 weeks from the date the lender made the first loan payment to the small business owner.

To be eligible for loan cancellation, the bulk of the loan proceeds must be used to cover salary costs during the “covered period”. The product can also be used to cover certain non-salary expenses, including rent, mortgage interest, and utilities. The period covered for most small business clients will be a 24 week period beginning on the first day of the first pay period following receipt of loan proceeds. Borrowers who took out their loans before June 5, 2020 can choose to use an eight week period as the covered period.

Employers must maintain the same average number of employees during the period covered to be eligible for a loan forgiveness (the amount of a loan that can be forgiven will be prorated, not fully eliminated, for employers downsizing) . Reducing the compensation of employees earning less than $ 100,000 by more than 25% may also reduce the amount remitted.

The PPPFA gives employers until December 31, 2020 to get employees back to work and restore salary levels to continue to benefit from a loan discount.

Most loan forgiveness applicants are required to document the number of full-time employees employed between February 15, 2019 and June 30, 2019, compared to the same period in 2020, to determine the amount of their loan forgiveness. ready.

SBA Form 3508S: Relief for Small Loan Recipients

The SBA’s Simplified Loan Forgiveness Application is available to business owners who have borrowed $ 50,000 or less from P3 funds. The streamlined process is not available to business owners who, along with their affiliates, received $ 2 million or more under the program. Form 3508S is designed to make the process less confusing and time consuming for employers who have borrowed relatively small amounts.

Small loan borrowers will no longer be required to reduce the value of their loan forgiveness if they have reduced the salary or wages of an employee earning less than $ 100,000 during the period covered. Likewise, such borrowers will not be required to reduce the remitted amount if they have reduced their number of full-time equivalent employees during the period covered.

Round	Legislation	Funding	Expiry
1	CARES Law	$ 349 billion	April 16, 2020
2	PPP and Law on the Improvement of Health Care	310 billion dollars	August 8, 2020
3	Consolidated Appropriations Act of 2021	$ 284 billion	March 31, 2021
4	American Rescue Plan Act of 2021	$ 7 billion	May 31, 2021

^{Sources: HR 748, HR 266, RH 133 HR 1319}

The Round 3 PPP funding contained in the AAF, includes significant changes to the Paycheck Protection Program Flexibility Act, 2020, which also made significant changes to the original paycheck protection program that was part of the CARES Act.

the new legislation, for example, extends the permitted uses of PPP funds beyond payroll, covered utilities, and covered rent. It offers flexibility in choosing the period covered for your loan (8 to 24 weeks or until June 30, 2021, whichever comes first) and simplifies the waiver process for loans of $ 150,000 or less.

Contracts reserved for minority-owned businesses, underserved people, veterans and women

In order to secure more funds for small businesses excluded from previous PPP funding rounds, Congress set aside additional funds and a “front-line” application process for minority and other underserved businesses as part of the program. the structure of the CAA, 2021.

• $ 15 billion through community financial institutions;
• $ 15 billion through insured deposit institutions, credit unions, and agricultural credit system institutions with consolidated assets of less than $ 10 billion;
• $ 35 billion for new first-draw PPP borrowers; and
• $ 15 billion and $ 25 billion for first and second draw PPP loans, respectively, for borrowers with 10 or fewer employees or for loans under $ 250,000 to borrowers in low- and moderate-income neighborhoods.

CAA further predicts that at least 25% of each fallow will go to each of the targeted groups:

• SMEs with a maximum of 10 employees; and
• Loans of less than $ 250,000 to businesses in low- and moderate-income neighborhoods.

First and second draw PPP loans

The reopening of the Paycheck Protection Program (PPP) on January 11, 2021, included the creation of two levels of PPP First-Draw and Second-Draw loans.

Generally speaking, first draw loans are for those who have never received a PPP loan, although there are exceptions listed below under eligibility. Second Draw Loans are for those who received a PPP loan under previous funding and now need more funds to stay in business.

First-draw PPP loan details

The Paycheck Protection Program (P3) First Draw Loan is designed to help small businesses keep employees on their payroll. You can use First Draw’s PPP funds on payroll, employee benefits, mortgage interest, rent, utilities, COVID-19 worker protection, uninsured property damage, and certain operating costs and supplier.

Your loan will be forfeited if you meet employee retention criteria and use the money for qualifying expenses. First-draw PPP loans:

• Have an interest rate of 1%
• Have a five-year maturity
• Allow you to defer payments, provided you request a forgiveness, until the SBA remits your loan forgiveness amount to your lender
• Allow you to defer payments for 10 months after the end of the period covered for your loan if you do not request a forgiveness
• Do not require any guarantee and no personal guarantee
• Have no fees

The maximum loan amount for a First Draw P3 Loan is 2.5 times your average monthly salary costs in 2019 or 2020 up to $ 10 million.

First drawdown PPP loan eligibility

If your business has been affected by COVID-19, you may be eligible for a First Draw P3 Loan if you did not receive a P3 Loan under one of the first two funding programs and you are:

• A sole proprietor, an independent contractor or a self-employed person
• A small business that meets SBA size standards (either industry size standard or alternative size standard)
• A business, 501 (c) (3) nonprofit, 501 (c) (19) veterans organization, or Small Business (sec. 31 (b) (2) (C) Act) with 500 or less employees OR
• Which meets SBA industry size standard if over 500
• A business with a NAICS code that begins with 72 (accommodation and food services) that has more than one physical location and employs less than 500 people per location

If you received a PPP loan under previous funding but did not receive a loan forgiveness by December 27, 2020, you can:

• Re-apply for a first-draw PPP loan if you have already returned some or all of your first-draw PPP loan funds, or
• In certain circumstances, you can request a change in the amount of your First Draw-PPP Loan if you have not previously accepted the full amount to which you were entitled.

Ineligible entities

Businesses or organizations that are not eligible for a first draw PPP loan include:se

• Companies primarily engaged in lobbying
• Companies 20% or more owned by China
• Companies with a board of directors resident in China
• Entities benefiting from a closed site operator (SVO) grant under Article 24 of the new law
• Listed companies
• Businesses are not normally eligible under SBA guidelines unless expressly permitted by the new law

Second draw PPP loan details

The loan conditions for a second draw loan are the same as for a PPP first draw loan. Second Draw Loans are for borrowers who have already received a PPP loan under previous financing and who meet the eligibility conditions listed below.

Second-draw PPP loans can be used for payroll, employee benefits, mortgage interest, rent, utilities, COVID-19 worker protection, uninsured property damage costs, certain vendor costs and operating expenses.

The maximum loan amount for a second draw P3 loan is 2.5 times your average monthly salary costs in 2019 or 2020 up to $ 2 million. If you’re in the accommodation and food business, you can borrow 3.5 times your average monthly payroll, still capped at $ 2 million.

Eligibility for the second-draw PPP loan

A borrower is generally eligible for a second-draw PPP loan if they:

• Previously received a first draw PPP 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 2020sese

First and Second Drawdown PPP Loan Application Process

As noted above, first and second draw PPP loan applications will be accepted by all SBA approved lenders until May 31, 2021. Lenders have until June 30, 2021 to process the loans.

There are two things you need to do:

1. Download and complete the First print of 5 pages loan application or Second edition of 6 pages candidacy of the ASB website; and
2. Contact an SBA approved lender and apply.

Keep in mind that first-time PPP loans are generally reserved for companies that have never received a PPP loan in the past, with the exceptions noted in the eligibility section. Second Draw Loans are for those who received a PPP loan earlier.

If you need help finding an approved lender, the SBA provides a Lender Match Tool or you can check the List of PPP lenders, organized by state.

Collect payroll and records

Whether you are applying for a loan in the first or second drawdown, you will need payroll and other records to complete the application:

• Relevant tax declarations (2019 and 2020)
• Payroll records to help verify the amount you are claiming
• Documentation showing the legal structure of your business
• A demonstration of the impact of COVID-19 on your business

Apply as soon as possible

Although legislation requires that Series 3 PPP loan applications be accepted by May 31, 2021, past experience suggests that the actual availability of funds may be much less. Remember that the first round of financing only lasted two weeks.

A generation ago, when Bill Clinton wanted to prove to Central America that he was not a leftist cartoonist, he publicly criticized a previously obscure black hip-hop artist named Sista Souljah. Last week President Joe Biden – still keen to hang on to his centrist in good faith while pushing a predominantly progressive economic agenda – found his moment Sista Souljah in the hypothetical character of a presumably awake young Penn graduate demanding that taxpayers retroactively fund their elite education.

Indeed, the new 46th US president has abandoned the chief healer schtick and seemed to get up when a young woman at her meeting at city hall in Milwaukee CNN last week told her that US $ 1.7 trillion college debt is crushing the American dream and asked for at least $ 50,000 per student to canceling the government’s debt, asking it, “What will you do to make this happen?” ? “

“I won’t make it,” Biden responded briskly, then the president – who rejoiced during the 2020 campaign that he would be the first in the Oval Office. without Ivy League diploma since Ronald Reagan – pivoted to a tortured explanation of why. He tried to frame the $ 50,000 debt cancellation, argued by other leading Democrats, like “the idea of ​​me saying to a community, ‘I’m going to write off the debt, the billions of dollars in debt, for the people who went to Harvard, Yale, and Penn.’” Then he quickly turned away toward other laudable ideas like early childhood education and free community college, which – unlike federal debt action – would require action from our divided Congress.

Biden’s answer was full of calculations one refines over a 50-year career as an elected official, and the political logic is understandable. The University of Delaware graduate’s anti-elitist tone has always served him well, and fans of Biden, or realpolitik, would surely argue that the rejection of a key part of the progressive checklist provides political cover to the important leftist politics it’s most critical for his presidency: the $ 1.9 trillion coronavirus relief package.

But factually, morally, and on the basis of an issue that’s more important to the future of the American Dream than our new POTUS seems to realize, Biden got it wrong last Tuesday in Wisconsin – arguably, more badly than it hasn’t been about anything in the first month of a presidency seeking to undo the four-year stain of its distorted predecessor. If Biden – whose ability to learn, adapt and grow is a big part of why he became president at 78 – understands the nation’s “university problem” can determine whether his ultimate inheritance is mixed or transformative.

Let’s start by noting the enormous irony buried under Biden’s response, which reminded me Upton Sinclair’s famous line, “It’s hard to get a man to understand something, when his salary depends on not understanding it.” Joe Biden may not hold an Ivy League sheepskin, but during his brief stint between vice-president and president he was paid over $ 900,000 by Penn for ill-defined work that helped inflate the University of Philadelphia and its public image. Now, one has to wonder if Ivy’s seduction of a future president has not also fostered a view of the status quo of higher education in America that does not align with the aspirations and real-world struggles of a future president. increasingly desperate middle class.

Here’s what people – but especially the President of the United States – need to know and understand about a student loan crisis that has come out of nowhere to become one of our major crosses to bear in the 21st century. First of all, the crushing burden of debt – that exceeded $ 30,000 for the average student in the late 2010s – up sharply since the turn of the millennium – has become the fundamental problem for many young Americans. It cripples their ability to do things that came easily for someone like Joe Biden after graduating from super low tuition fees University of Delaware in the 1960s – like buying a new house or getting married. The negative fallout on the U.S. economy affects everyone – not just the 37% who were able to earn a four-year degree.

“LEARN MORE: How Student Debt Cancellation Became the First Political Minefield of the Joe Biden Era | Will be bunch

But on Tuesday, Biden also gave Americans a grossly misleading picture of the nature of the loan crisis. In fact, experts say only 0.3% of federal student borrowers have attended Ivy League schools such as Harvard, Yale or Penn, those cited by Biden as motivating his thoughts against sweeping debt relief. Yes, their sticker cost is the highest, but there are only eight Ivies in the middle of the vast sea of ​​6,000 US colleges and universities. Additionally, the much-criticized admissions policies at these elite schools privilege the privileged classes who do not need to take out loans, and – aided by their large endowments – Ivies also tend to offer scholarships instead of loans to the low-income children they accept.

So who are the carriers of most of this 1.7 trillion dollar wheel? Many are the Joe Bidens of today – middle and working class kids hoping to get a head start in public universities that have raised tuition fees since the 1960s to levels unthinkable today. Schools like Delaware or Penn State haven’t always made the best decisions – what about those salaries of top administrators? – but they’ve also been squeezed by spending cuts from conservative state governments that appear to have plenty of money for prisons while struggling to attract new students by trying to offer Ivy-caliber equipment. The reality is that 49% of current borrowers attend public universities, and they tend to owe more than a young adult graduate from Penn.

But even worse, Biden’s town hall response showed little to no understanding of how the weight of student loans is declining. disproportionately over young black and brown Americans. Today, the average African American student is much more likely to take out loans than their white counterparts (86% vs. 59%) and graduates with $ 7,400 more in debt than their white peers. And their default rates are considerably higher – compounded by the financial and other burdens that make it more difficult to graduate from their four-year degree, or by the large numbers attracted by the exaggerated hype of for-profit fraudulent schools.

The conservative “personal responsibility” argument about university debt tends to crumble as the roots of the crisis are digged deeper. The truth is, America has put the psychological equivalent of a gun on the heads of our middle class youth and given them the choice: bet a college degree will result in a job lucrative enough to pay off. these usurious loans … zero future, entry into the labor market without a diploma. Millions took the bet, and for many it didn’t really pay off. Eliminating their debt isn’t just a boost to the economy, it’s a nod to restoring morality.

Having said that, I think Biden partially understands something politically that many of my left-wing friends who support massive debt relief seem blind to. If the president has used his executive power to write off $ 50,000 or more in individual college debt – but hasn’t done much or nothing else on the broader higher education issues the country is facing confronted with – the predictable outcry of those on the right could retain the rest of his agenda. In an increasingly divided nation between college-educated Democrats and the unqualified whites now at the heart of the GOP, the perception – again, based on misconceptions about who owns college debt – that Biden is rewarding his affluent voters could be a problem.

But what Biden and leftists who differ from the president need to understand is that the answer is to go bigger, not smaller. True leadership requires a big deal to essentially blow up the shattered university framework in America, with a massive plan offering not only complete debt relief, but also helping both prospective students (with a free program). and improved public universities and community colleges) and the millions of young people who, for various reasons, do not set foot on campus with extended training and internships.

America’s biggest problem in 2021 is bitterness and resentment at the heart of this right now is about who has the opportunity and who doesn’t – and who gets an unfettered college education. Resentment towards the educated elites of those who stray from the current system (yes, along with racism and other factors) drove the neo-fascism of Donald Trump and the January 6 insurgents. Most Americans know this, but we seem too shocked to start thinking about how to resolve the issues that have caused our division. That’s why in a time of overlapping crises like climate and infrastructure collapse, we may not find the social cohesion to resolve them without addressing “the college (and non-college) problem.” Which means we can’t afford not to try. We owe it not only to the millennials who got ripped off and our children’s future American dreams, but to all of us who are looking for ways to prevent a second American Civil War.

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Risky lending practices plummeted the U.S. economy during the Great Recession, but banks returned to solid financial footing more than a decade later, seeking to save businesses on the brink of collapse due to the coronavirus pandemic.

In addition to Maine banks processing nearly 26,000 repayable federal loans worth $ 2.6 billion to local small businesses, they were waiver of fees and postponement of certain loan payments for those who want money.

For the first time since March 2020, the national mortgage delinquency rate fell below 6% to 5.9% in January, according to data from Black Knight Wednesday.

At the current rate of improvement, the data giant estimates that 2.1 million borrowers remain in arrears for 90 days or more, although they are yet to be entered. Although modest improvements in mortgage delinquency have occurred over the past several months, loans considered seriously past due are still five times higher than pre-pandemic levels.

Thanks to widespread moratoria, borrowers have been able to avoid evictions and foreclosures for some time now. Foreclosure starts and selling activity hit all-time lows in January, with starts down 86% year-over-year and sales down more than 95%.

the FHFA more recently extended COVID-19 lockdown abstention moratoriums until March 31, 2021 and Department of Housing and Urban Developmentalso kicked foreclosure can further down the road for FHA and USDA loans as of June 30, 2021.

While these expansions have reduced the risk of short-term lockdown, they also serve to extend the cooldown, Black Knight said. But even with these continued extensions, Black Knight estimates that 1.8 million mortgages will still be seriously in arrears at the end of June, when those moratoria are expected to be lifted.

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From abstention to post-abstention: how to make the process effective

To cope with the large volume of loans still in forbearance, mortgage agents must have functional, flexible and efficient forbearance processes in place. Here are some concrete steps to create this process.

Presented by: FICS

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As service officers prepare to handle more than one million borrowers who will feed the mortgage delinquency pipeline, recent research by the Urban Institute believes that a the impending foreclosure crisis is not really on the horizon.

A host of FHA and FHFA loss mitigation stunts allow borrowers who are not on forbearance programs to be eligible for loss mitigation options, including mortgage modifications. Yet not all borrowers will be eligible for a modification, and some will be forced to downsize or rent, the Urban Institute noted.

Borrowers also have the most available equity in history, and those with high equity in their home could leave their home, if they needed to, with their credit intact and potentially some cash in. hand.

However, about 626,000 of the 3.2 million delinquent borrowers have public loans in Ginnie mae securities. Due to their initially high loan-to-value ratios, these borrowers are likely to have less equity in their home.

“Our analysis shows that, even among defaulting borrowers, less than 1% have negative equity and 5.5% have near-negative equity. By comparison, in the aftermath of the Great Recession, about 30% of homes had negative or near-negative equity, but the number is now 3.6%, ”the Urban Institute report says.