So nationally, as well as in Arizona and Southern Arizona,
we obviously are very familiar
and are working through the Paycheck Protection Program.
In Arizona, we've got 72,000 businesses
that have received the PPP loan.
And that's to the tune of eight billion,
eight and a half billion dollars.
And that's since the inception
of the first round of PPP funding.
So that's Arizona numbers.
We don't have the breakdown of the local markets
by congressional district at this time,
but nationally, we still have about 100 billion dollars
in funding left, so we've now given out money
to over four million small businesses.
- [Tony] PPP loans come with strings attached.
The SBA will fully forgive loans if in eight weeks,
employers spend at least 75% of the funds on payroll,
with the rest going toward rent,
mortgage interest, or utilities.
According to reports,
some businesses that temporarily closed
and received PPP loans are worried
that deviating from those terms
in order to cover more urgent expenses
puts them at risk of being forced to pay back a portion.
- The Paycheck Protection Program was really designed
around keeping people whole
and keeping their payroll intact
and allowing people to have an income.
And it wasn't really taking these shutdown factors
into account, nor was it intended to do that, honestly.
So, at this point we are,
I think there's a lot of discussion around those things,
because the reality of it is different
and as the COVID environment is very dynamic,
things are changing all the time, so as the new legislation
and things that are still on the Hill are being looked at,
there'll be constant discussion about this very point.
- And when applying for loans or programs,
should businesses be very careful
with certain steps along the way?
In other words, should they read the fine print
before they go ahead and apply for these services?
- Very much so.
The fine print is important on the certifications
in both programs and then the PPP loan,
because you need to understand what's going to be forgiven
and what's not going to be forgiven.
It's important to understand what you're signing up for,
because the details are a little bit confusing at times
when you're looking at trying to figure out,
well if the forgiveness part doesn't happen,
it turns into a 1% loan
and you have two years to pay that back.
So ultimately, there's room for discussion
as far as what's in there, but you wanna understand,
if you put in 10 employees to get that PPP loan,
then you've hired back 10 employees
to keep the forgiveness model clean.
So yes, there's definitely those pieces.
- And how does your agency define a small business?
And then who is eligible for benefits?
- Yes, thank you.
The small business definition, it's pretty much,
the general answer is 500 employees or less
is the general definition.
On the PPP side, we have an alternative size definition,
or you could be defined by your industry code
and your revenues as a result of that industry code.
So we do allow some provisions on PPP
that are a little different than our normal ones,
which are looking at if you're a franchise industry business
and you've got the NAICS code of 7-2,
which is a food and concessions type of industry code,
that one, as long as each location
has 500 or less employees, they can be considered small,
even if you have multiple locations.
So there's a different sort of variances
on the small definition, but generally speaking,
500 employees or less.
On the Economic Injury Disaster Loan side,
same thing, we look at that.
And on both programs, sole proprietors
and independent contractors, they are eligible as well.
- Any idea on how many organizations,
how many small businesses have asked for assistance so far?
- At this point on our Economic Injury Disaster Loan,
we've got 4,600 or so approved as of a couple days ago
for the Economic Injury Disaster Loan.
And on that side the EIDL loan, it basically allows
for a 3.75% interest rate over a 30 year term.
And there's no repayment on that for the first 12 months,
so ultimately, that's a popular loan program,
and it's very helpful
because it's not centered around the payroll alone.
You can use it for other capital costs
and other working capital needs.
So that program is the one that is a popular one indeed,
and it is now, if you applied before April 15th,
we're getting through all those applications currently.
We closed it to additional businesses applying
after April 15th, unless you're an agricultural business.
- And moving forward, if you could relay one major message
to small businesses here in the state of Arizona,
what would that be?
- I would say that Arizona small businesses
embody the American small business spirit,
which is to be resilient and to persist and to carry on.
We understand that these times are difficult
and we appreciate that they are committed
to getting through this.
We have local counseling services
through the Arizona Small Business Development Center.
I definitely recommend that you take advantage
of those free counseling services
that are being offered virtually,
so that you can understand you're not alone
in this small business recovery.
We are here to help with that.
SBA.gov/az, it's where you can find
all of our local resources.
We have newsletters that we're sending out.
We have webinars that we're conducting.
Everybody's on deck to make sure
that we can get this recovery started.
So thank you so much.
= Shivani Dubey, thank you very much for joining us.
- My pleasure.
Thank you for having me.
Appreciate it.