PPP Loan: What’s Changed (& Changing)

June 2, 2020

The GrowthLab Weekly Jump is an information session hosted every Monday that tackles relevant issues in today’s trying times. Jumpstart your week with practical advice in times of uncertainty.

In case you missed this week’s Jump session, you can find the slide deck & recording below:

This week’s focus is on the updates to the PPP Loan Forgiveness Guidelines & Law, the Fed’s Main Street Lending Facility and the SBA’s Economic Impact Disaster Loan (EIDL) Program. Taking a fresh look at PPP and other federal programs. 


PPP: What’s Changed (& Changing)

Forgiveness Opportunity Expanding

  1. Clarity on Guidelines
    • Forgiveness App Published
  2. PPP Flexibility Act
    • Longer Forgiveness Period
    • Non-payroll % Increased
    • Longer amortization
    • Delayed payroll tax

What to Do?

  1. Already have PPP money?
    • Rethink how your spending
    • Look to optimize biz objectives amidst new information 
  2. Don’t have it yet?
    • Take another look at the program…it’s changed.

Main Street Lending Facility

Overview

  1. Three Facilities
    • MSNLF (New)
    • MSPLF (Priority)
    • MSELF (Existing)
  2. Basics
    • Minimum loan: $500k
    • Loan = 4-6x EBITDA
    • 4 year amortization
    • Interest @ LIBOR + 3%

How to Assess?

  1. Profitable Businesses
  2. Working Capital
  3. Strategic Investments

Check out our write up on the Main Street Lending Program.


Economic Impact Disaster Loan Program (EIDL)

Overview

  1. Many applied for grant + loan
  2. Grant of $1,000 per employee
  3. SBA is now disbursing funds
  4. No more appropriations

What to do if you are taking EIDL?

  1. Ensure you have a plan…
    • … you will have to pay it back
  2. Corporate Governance Issues
    • Personal guarantees
    • Selling or changing ownership
  3. Impact on strategy
    • Creates constraints around decision-making

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