If your business collects consumer payments through online bill pay services and processes them in the traditional manual way, you face an uphill battle to post those payments in a timely manner.
Relief is on the way for businesses, nonprofits, veterans' organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors that are being financially impacted by the COVID-19 pandemic. The $2 trillion stimulus package recently passed by Congress includes almost $350 billion in government-backed loans for businesses through the Paycheck Protection Program (PPP). This program is in high demand, so we’ve outlined a summary below to help you understand options available to current Hancock Whitney clients. Unfortunately, we are not able to process applications from any businesses that do not already have an active primary checking account with Hancock Whitney.
As of April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing Small Business Administration (SBA) lenders, including Hancock Whitney. Starting April 10, 2020, independent contractors and self-employed individuals can apply.
Please note that this information is being provided as a resource for our clients. All information is based on our current understanding of the terms and conditions applicable to the Paycheck Protection Program (PPP) as set out in the Congressional Act, and is subject to further interpretation and clarification as regulations and guidance are issued by various regulatory agencies, including the SBA.
The CARES Act – Paycheck Protection Program
The Coronavirus Aid, Relief and Economic Security (CARES) Act will allow banks to lend directly to businesses through the PPP, with the loans being backed by the federal government through the Small Business Administration (SBA). Highlights of key points currently include:
What you will need to apply
NOTE: ADDITIONAL DOCUMENTATION MAY BE REQUIRED when you apply for Loan Forgiveness.
Alternative to the Paycheck Protection Program that may fit your needs
If your business is not a heavy user of payroll, the SBA Economic Injury Disaster Loan Program may be a better fit than the PPP. This more traditional SBA loan offers up to $2 million in assistance and will be available once a disaster declaration is made within a state. The interest rate is 3.75% and 2.75% for nonprofits, and the loan features long-term repayments up to 30 years. These terms are determined on a case-by-case basis, based on each borrower’s ability to repay. Visit the SBA Coronavirus Disaster Assistance website to apply for this loan.
If you received an SBA Economic Injury Disaster Loan Program (EIDL) loan from January 31, 2020 through April 3, 2020, you can apply for a PPP loan as long as the EIDL loan was used for different purposes than the PPP loan. If your EIDL loan was not used for payroll costs, it does not affect your eligibility for a PPP loan. If your EIDL loan was used for payroll costs, your PPP loan must be used to refinance your EIDL loan.
Your Hancock Whitney banker can help
We understand that the pandemic has put many clients in a position of uncertainty, and we’re here to help. We’ve been your partner through good times and bad, and you can rest assured that we’ll work tirelessly to help you find financial solutions for your business amid this unprecedented event.
Please contact your Hancock Whitney banker to apply for the Paycheck Protection Program loan. Due to very high demand, at this time we are only able to process Paycheck Protection Program applications from current business clients with active deposit accounts.