Paycheck Protection Program (PPP) - SBA 7(a) CARES ACT Loans

Top SBA Lender - CARES Act Relief Loan

Paycheck Protection Program (PPP) - SBA 7(a) CARES ACT Loans

April 24, 2020 UPDATE: Lawmakers have approved an additional $320 billion in funding for the lapsed Paycheck Protection Program.  New guidance from the US Small Business Administration has been issued which states that companies applying for coronavirus relief funds must certify that the loans are necessary and that they cannot tap other sources of funding. 

We are accepting applications from customers who have an established banking relationship with Santa Cruz County Bank as of February 15, 2020 as well as businesses located in Santa Cruz, Monterey, Santa Clara and San Benito counties. This includes Lighthouse Bank customers who are now Santa Cruz County Bank customers as a result of our merger.

Due to constraints within this Government funded program and due to a significantly high volume of requests, it is not certain as to whether your request can be funded. Acceptance of any applications is not a guarantee of funding. 


NOTICE 4/16/2020: The Small Business Administration has stopped accepting applications for Paycheck Protection Program loans as the processed loan volume has reached the $349 billion level authorized by the CARES Act. The available funds have been exhausted, therefore SBA will no longer accept applications from lenders to make PPP loans.

We are awaiting word on whether lawmakers will be extending funds for the CARES Act Loan programs.

We are continuing work to process our existing queue of applications so we can be ready. If you have applied through us, we’ll contact you with questions and email you once we determine whether additional funding is available.

Determining the difference between these loan programs may be confusing.  To help you understand, we have summarized the primary differences between the two SBA loan programs in the chart below.  

  Paycheck Protection Program (PPP) - SBA 7(a) CARES ACT Economic Injury Disaster Loan (EIDL)
Maximum Loan Amount $10,000,000 $2,000,000
Forgivable Amount Up to the principal balance for loan proceeds used for qualified purposes $0
Interest Rate 1% 3.75% for For-Profit Companies
2.75% for Non-Profit Companies
Fees $0 $0
Maximum Loan Term 2 Years 30 years
Prepayment Penalty $0 $0
When is first payment due? 6th to 12th month 5th month
Collateral None, Unsecured Available collateral will be considered
Guarantees No Guarantees required Owners 20% or more of the company will guarantee
What can proceeds be used for? Payroll support, mortgage payments, rent, utilities, insurance, and other debt payments incurred before 2/15/2020 Economic loss caused by the COVID pandemic
Who Processes and Funds Santa Cruz County Bank Federal Government
Approval Time 1-3 Days 30-45 Days

Time is of the essence to keep your business funded through the COVID Pandemic.  We believe our Paycheck Protection Program (PPP) - SBA 7(a) CARES ACT program offers significant benefits by saving time and streamlining the application, approval, and funding processes.

  • LOCAL decision-making and processing, everything is processed locally.
  • Santa Cruz County Bank has a streamlined application process described in the tab below.

Who Is Eligible?

  • Small businesses, 501(c)(3) nonprofit, a 501(c)(19) veteran’s organization, or Tribal business described in section 31(b)(2)(C) of the Small Business Act with not more than 500 employees, or the applicable size standard for the industry as provided by SBA, if higher.
  • Sole-proprietors, independent contractors, and other self-employed individuals as eligible for loans.
  • Businesses with more than one physical location qualify so long as total combined employees are below 500 employees (unless the businesses operated under NAICS code beginning with 72) or otherwise meet the SBA’s size standard based on NAICS code.
  • Waives affiliation rules for businesses in the hospitality and restaurant industries, franchises that are approved on the SBA’s Franchise Directory, and small businesses that receive financing through the Small Business Investment Company (SBIC) program.
  • Applies current SBA affiliation rules to eligible nonprofits.

What is needed to determine Eligibility?

Business must be operational as of February 15, 2020 and had employees for whom it paid salaries and payroll taxes, or a paid independent contractor.

How do you calculate the total loan amount?

Average eligible monthly payroll costs, excluding compensation above $100,000 in wages (based on prior 12 months) multiplied by 2.5 (represents months) or $10 million whichever is less.

What is the allowable use of proceeds?

Allowable uses of the loan include eligible payroll support (eligible employee salaries which excludes compensation above $100,000 in wages, paid sick or medical leave, insurance premiums), interest paid on a mortgage (excludes any prepayment of or payment of principal) or rent, and utility payments.

Is it true I won't have to pay back my loan?

  • The borrower is eligible for loan forgiveness equal to the amount spent by the borrower during an 8-week period after the origination date of the loan on eligible payroll costs, interest payments on any mortgage incurred prior to February 15, 2020 (excludes principal and prepayments), payment of rent on any lease in force prior to February 15, 2020, and payment on any utility for which service began before February 15, 2020. Amounts forgiven may not exceed the principal amount of the loan.
  • Forgiveness on a covered loan is equal to the sum of the following:
    • Eligible payroll costs (excludes compensation above $100,000 in wages) incurred during the covered 8 week period compared to the previous year or time period, proportionate to maintaining employees and wages: eligible payroll costs
    • Plus any payment of interest on any covered mortgage obligation (excludes any prepayment of or payment of principal on a covered mortgage obligation)
    • Plus any payment on any covered rent obligation + and any covered utility payment.
  • The amount forgiven will be reduced proportionally by any reduction in employees retained compared to the prior year and reduced by the reduction in pay of any employee beyond 25 percent of their prior year compensation. To encourage employers to rehire any employees who have already been laid off due to the COVID-19 crisis, borrowers that re-hire workers previously laid off will not be penalized for having a reduced payroll at the beginning of the period.
  • Canceled indebtedness resulting from this section will not be included in the borrower’s taxable income.
  • Any loan amounts not forgiven at the end of one year are carried forward as an ongoing loan with terms of a max of 10 years at 4% interest.

What is the term of the loan?

2 year amortizing loan with no prepayment penalties. Payments on this SBA 7(a) loan can be deferred for 6 months to a year.

What are the interest rate and SBA guarantee fees for this loan?

The rate is 1% and SBA is waiving the guarantee fee.

What collateral is required?

The loan will be unsecured.

Are personal guarantees required?

No

Is the Credit Elsewhere Rule enforced?

No

Other Conditions and Requirements

  • Cannot apply for any other programs through the SBA for the same purpose.
  • Eligible borrowers will be required to make a good faith certification that the loan is necessary due to the uncertainty of current economic conditions caused by COVID-19; they will use the funds to retain workers and maintain payroll, lease, and utility payments; and are not receiving duplicative funds for the same uses from another SBA program.

What will be the Required Application Document Checklist?

Below is a list of documents that will likely be needed to process the SBA 7 (a) CARES Act Loan

  • Completed Application
  • SBA Form 1919.
  • Articles of Incorporation/Organization of each borrowing entity
  • By Laws/Operating Agreement of each borrowing entity
  • All owners Driver’s Licenses
  • Payroll Expense verification documents to include: IRS Form 940 and 941
  • Payroll Summary Report with corresponding bank statement
  • If a Payroll Summary Report is not available, Employee Pay Stubs as of February 15, 2020 (or corresponding period) with corresponding bank statement, and, breakdown of payroll benefits (vacation, allowance for dismissal, group healthcare benefits, retirement benefits, etc.)
  • 1099s (if Independent Contractor)
  • Certification that all employees live within the United States. If any do not, provide a detailed list with corresponding salaries of all employees outside the United States
  • Trailing twelve-month profit and loss statement (as of the date of application) for all applicants
  • Most recent Mortgage Statement or Rent Statement (Lease)
  • Most recent Utility Bills (Electric, Gas, Telephone, Internet, Water)

April 24, 2020 UPDATE: Lawmakers have approved an additional $320 billion in funding for the lapsed Paycheck Protection Program, which is awaiting the President's signature.  New guidance from the US Small Business Administration has been issued which states that companies applying for coronavirus relief funds must certify that the loans are necessary and that they cannot tap other sources of funding. 

We are accepting applications from customers who have an established banking relationship with Santa Cruz County Bank as of February 15, 2020 as well as businesses located in Santa Cruz, Monterey, Santa Clara and San Benito counties. This includes Lighthouse Bank customers who are now Santa Cruz County Bank customers as a result of our merger.

Due to constraints within this Government funded program and due to a significantly high volume of requests, it is not certain as to whether your request can be funded. Acceptance of any applications is not a guarantee of funding. 

 

Are you a current customer* of Santa Cruz County Bank?

*Current customer with an established banking relationship with Santa Cruz County Bank as of February 15, 2020
We are also accepting applications from companies in these counties: Santa Cruz, Santa Clara, Monterey and San Benito.

Yes, I Am a Current Customer

Thank you for your banking relationship! We sincerely value your business and we are accepting applications from customers who have had an established banking relationship with Santa Cruz County Bank as of February 15, 2020. This includes Lighthouse Bank customers who are now Santa Cruz County Bank customers as a result of our merger. We appreciate your patience and understanding.

Due to constraints within this Government funded program we are not certain as to how much funding will be available, and due to a significantly high volume of requests, it is not certain whether your request can be funded.

Completing the application below does not constitute a commitment to lend.

Please follow this link to continue: Paycheck Protection Program Loan Application

 

No, I Am Not a Current Customer

Due to constraints within this Government funded program we are not certain as to how much funding will be available, and due to a significantly high volume of requests, we are no longer taking applications from non-customers outside of our service area.

We are accepting applications from non-customers who are located in these counties: Santa Cruz, Santa Clara, Monterey and San Benito. If your business is located in one of these counties, please follow this link to continue: Paycheck Protection Program Loan Application

If you are located elsewhere, we encourage you to contact your current banking institution and seek alternative lenders. A helpful resource is the U.S. SBA website: sba.gov

 

SBA Lender

Approved to offer SBA loan products under SBA's Preferred Lender program.

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April 24, 2020 UPDATE: Lawmakers have approved an additional $320 billion in funding for the lapsed Paycheck Protection Program. New guidance from the US Small Business Administration has been issued which states that companies applying for coronavirus relief funds must certify that the loans are necessary and that they cannot tap other sources of funding.

We are accepting applications from customers who have an established banking relationship with Santa Cruz County Bank as of February 15, 2020 as well as businesses located in Santa Cruz, Monterey, Santa Clara and San Benito counties. This includes Lighthouse Bank customers who are now Santa Cruz County Bank customers as a result of our merger.

Due to constraints within this Government funded program and due to a significantly high volume of requests, it is not certain as to whether your request can be funded. Acceptance of any applications is not a guarantee of funding.

You are about to leave our website. By clicking on the hyperlink provided below, you will land on our partner's site for the processing of your Paycheck Protection Program loan.

If you do not see our logo on the page, which is hosted by Monja, please contact us.

Continue to Paycheck Protection Program Loan Application

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April 24, 2020 UPDATE: Lawmakers have approved an additional $320 billion in funding for the lapsed Paycheck Protection Program. New guidance from the US Small Business Administration has been issued which states that companies applying for coronavirus relief funds must certify that the loans are necessary and that they cannot tap other sources of funding.

We are accepting applications from customers who have an established banking relationship with Santa Cruz County Bank as of February 15, 2020 as well as businesses located in Santa Cruz, Monterey, Santa Clara and San Benito counties. This includes Lighthouse Bank customers who are now Santa Cruz County Bank customers as a result of our merger.

Due to constraints within this Government funded program and due to a significantly high volume of requests, it is not certain as to whether your request can be funded. Acceptance of any applications is not a guarantee of funding.