Colorado Lending Source's Response to COVID-19
Colorado Lending Source recognizes the importance of being available to serve small business owners as they navigate the impact of the COVID-19 pandemic. We are working with our community partners, lenders, and small business owners to make sure they are receiving the most accurate and up-to-date information.
Coronavirus Aid, Relief, and Economic Securities (CARES) Act
On Monday, December 21, 2020, the House and Senate passed an additional COVID-19 relief package to bring much needed aid to struggling Americans during the Pandemic. The $900 billion package includes a new round of stimulus funding with $325 billion for small businesses. As of December 27, 2020, President Trump officially signed the bill and we hope to have more details from the Treasury Department soon.
It will take time for SBA to implement the new COVID relief act into updated regulations and guidance. Colorado Lending Source will be working closely with industry partners and will provide updated information as available.
View Small Business Majority Webinar: What's in the stimulus package for small business?
Paycheck Protection Program (PPP)
The Small Business Administration and U.S. Treasury announced the Paycheck Protection Program (PPP) will re-open the week of January 11, for new borrowers and some existing PPP borrowers that qualify.
Only community financial institutions (defined as Community Development Financial Institutions, Minority Depository Institutions, Certified Development Companies and Microlender Intermediaries) will be able to make "First Draw" PPP loans on Monday, January 11th and "Second Draw" PPP loans on Wednesday, January 13th.
As a Certified Development Company, Colorado Lending Source will be partnering with Lendio to help facilitate the PPP loan process for qualifying small businesses. The application portal is now live and can be accessed here.
First Draw applications open: January 11, 2021
Second Draw applications open: January 13, 2021.
Key updates of PPP include:
- Borrowers can set their loan covered period to be any length between 8 and 24 weeks to best meet their needs
- Loans will cover additional expenses including operations expenditures, property damage costs, supplier costs, and worker protection expenditures
- Eligibility is expanded to include 501(c)(6)s, housing cooperatives, direct marketing organizations, among other types of organizations
- Greater flexibility for seasonal employees
- Certain existing PPP borrowers can request to modify their "First Draw" PPP loan amount
- Certain existing PPP borrowers are now eligible to apply for a "Second Draw" PPP loan
Existing PPP borrowers that are eligible for a "Second Draw" PPP loan must:
- Employ not more than 300 employees
- Have used the full amount of its first PPP loan
- Demonstrate at least a 25% reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same quarter in 2019. Additionally, applications submitted on or after January 1, 2021 are eligible to utilize the gross receipts from the fourth quarter of 2020 as needed.
For current PPP borrowers, please note that we are also partnering with Lendio, who is using a personalized online portal for the forgiveness application process.
Here is a reminder of your covered period options and the payment deferral period that is in place:
- The 3508, 3508EZ and 3508S forms display an expiration date of 10/31/2020. However, this is not the deadline for application. Borrowers may submit loan forgiveness any time before the maturity date of the loan, which is either two or five years from the loan application. Please check your note or the date.
- Per current legislation on the PPP, the loan forgiveness covered period is the 24-week period beginning on when your PPP loan was disbursed. If your PPP loan was made before June 5, 2020, you may elect an 8-week covered period beginning on when your PPP loan was disbursed.
- You have up to 10 months after the end of your loan forgiveness covered period to submit the loan forgiveness application to us, along with any other required documentation.
- After the forgiveness application is received, Colorado Lending Source, as your lender, and the SBA have up to a combined 150 days or approximately 5 additional months to make a decision on the forgiveness application.
- You will not have to make any payments of principal or interest on the PPP loan before the date on which SBA either remits the forgiven amount to Colorado Lending Source as your lender, or notifies us that a reduced or no forgiveness is allowed.
- Example: A business’ PPP loan was disbursed on June 25, 2020, the 24-week covered period ends on December 10, 2020. The business would then need to submit a forgiveness application to the lender by October 10, 2021. The lender and SBA would then have up to March 9, 2022 to inform the borrower of the determined forgiveness, before any payment would be required. This assumes that the full loan amount was not approved. If the borrower did not submit the forgiveness application by October 10, 2021, then payments would begin following this date.
For full guidance on the Paycheck Protection Program, please visit the U.S. Department of Treasury website.
PPP General Program Details:
- $350 billion to support loans to small employers with more than one physical location that employees more than 500 employees in certain industries to be eligible and is below a gross annual receipts threshold plus those that meet the SBA size standards
- Loan size will equal 250% of an employer’s average monthly payroll with a maximum loan amount of $10 million
- Covered payroll costs include salary, wages, and payment of cash tips, employee group health care benefits (including insurance premiums, retirement contributions, and covered leave) in addition to mortgage, rent, and utility payments
- Loans will be available immediately through existing SBA-certified lenders
- The portion of the loan used for covered payroll costs, interest on mortgage obligations, rent, and utilities would be forgiven
- Interest rates are fixed at 1%
- At least 60% of loan proceeds need to go to payroll expenses in order to maximize potential loan forgiveness. For full guidance on the Paycheck Protection Program, please feel free to visit the U.S. Department of Treasury website.
Small Business Debt Relief
- Section 1112 of the CARES Act requires the Small Business Administration (SBA) to make payments on all existing and newly funded SBA 504, 7(a), Community Advantage, and Express loans for six months, providing immediate and much needed relief, beginning April 1, 2020
- If you have an existing SBA loan with us your payments will be made for the next six months (if you have a Colorado Main Street Loan, please contact email@example.com)
- These are full payments of principal and interest plus any applicable fees
SBA Economic Injury Disaster Loans (EIDL)
As part of the new COVID relief package passed at the end of 2020, the deadline for EIDL has been extended to December 31, 2021.
Colorado small businesses impacted by COVID-19 can now seek individual small business loans with low interest rates up to $2 million as part of SBA’s Economic Injury Disaster Loan program to help finance operational costs. For more details on SBA Economic Injury Disaster Loans, visit the Colorado Small Business Development Center’s resource page.
- Eligible entities may apply for loans up to $2 million
- Interest rates are fixed up to 30 years at 3.75% for small businesses and 2.75% for non-profits
- Financing can be used for working capital to help pay fix debts, payroll, accounts payable, and other bills that can’t be paid as a result of the disaster.
- The Consolidated Appropriations Act of 2021 repeals the requirement that borrowers must deduct the $10,000 EIDL Advance amount from the forgivable amount of the PPP loan. If a borrower’s PPP loan forgiveness amount was previously reduced by the EIDL grant, the SBA must take action to remedy the issue.
- $265 million in grants to SBA resource partners, including Small Business Development Centers and Women’s Business Centers for business counseling, training, and assistance related to COVID - 19
- Plus $10 million to the Minority Business Development Agency to provide services
Small Business Disaster Relief Resources
In addition to the resources listed below, the Colorado Small Business Development Center has an in-depth page dedicated specifically for small businesses in response to COVID-19. As one of our trusted partners, we highly encourage you to visit their website.
General Small Business Resources:
- SBA Small Business Guidance & Loan Resource
- CDC Interim Guidance for Businesses & Employers
- Office of Economic Development & International Trade - COVID-19 Business Resource page
- Impact Investing Institute
- Small Business Majority
- EDCC Resource Page
- SBDC Business Resiliency Toolkit
- Bell Policy Recovery Hub
- Work Share Program
- TechStars Resource Guide for Entrepreneurs
- COVID-19 Finance Assistance Network
Regional Small Business Resources:
- Downtown Denver Partnership COVID-19 Updates
- The City of Centennial
- Vail Valley Partnership Small Business Resources Page
- Westminster Small Business Resource Page
- Glenwood Springs Chamber Resource Page
- Adams County Resource Page
- Region 10 Business Loan Fund
- Telluride Regional Loan Fund
- Northern Colorado Resource Page
- Boulder Area Business Response Group
- Boulder Chamber Resource Page
- Arapahoe/Douglas Works! Resources
- Adams County Resources
- Aurora Chamber Resources
- NoCo Recovers
- Lakewood Small Business Relief Grant Program
- Advance Arapahoe Grant Program
Industry Related Small Business Resources:
Upcoming Virtual Events
Join us online!
We're keeping our social distance but that doesn't mean we can't stay connected! Join our online community to help your business or clients navigate COVID-19 challenges. We will be curating a list of the most relevant virtual events available for small businesses, lenders, and resource partners. These will include everything from educational webinars to community networking events.
We will be utilizing social media as a way to help support the small business community and highlight different ways they are pivoting during this time of transition. Follow us on Facebook, Instagram, Twitter, and LinkedIn for the latest updates and ways to support local business.
If you’re a small business owner who believes you can benefit from a shoutout, please email marketing or tag us on any social media.
We're here for you!
Although our physical office in Denver is closed for as long as is needed, we are well prepared to continue business without disruption.
We will remain available by phone, email, and are happy to schedule virtual meetings with you. Please feel free to call our main line and leave a voicemail so that we may direct your call to the appropriate person or team.
303.657.0010 | firstname.lastname@example.org