SBA LOANS

SBA LOANS

Important PPP Update: January 08, 2021

On January 6th, the Treasury Department and Small Business Administration released two interim final rules related to the administration of the Paycheck Protection Program:

The new program allows for PPP loans to both first time applicants (First Draw PPP Loans) as well as to businesses that have already received a PPP loan (Second Draw PPP Loans).  The Treasury and SBA are staggering access to the new program by financial institution size. We expect to have access soon after January 13.

 

PPP Forgiveness Update: December 22, 2020

 

All PPP borrowers should have already received an email from us with instructions on how to access our online forgiveness platform to complete the appropriate PPP forgiveness application. Please contact your banker if you have not received this email.

 

If you have a PPP loan that disbursed prior to June 5th and are electing the 8 week coverage period, your PPP forgiveness application must be submitted by February 1, 2021.

 

SBA PPP Resources

  • PPP Webinars: The SBA’s Houston District Office is hosting a series of PPP overview webinars. Additional information including webinar links can be found on the SBA Houston District Office website here.
  • PPP FAQ: Access the latest SBA PPP FAQ document for lenders and borrowers here.
  • Interim Final Rule: Access the Department of the Treasury’s Program Rules here.

 

Please note: Allegiance Bank has received reports of a non-government website attempting to impersonate the SBA website. Always exercise caution by verifying that you have navigated to the correct website URL (i.e. sba.gov). Additional information can be found on the Department of Homeland Security website here.

CARES ACT: Paycheck Protection Program (PPP)

Please note that the following information is subject to change per the U.S. Small Business Administration and the U.S. Department of the Treasury.    

About the Paycheck Protection Program

As the Houston region's largest community-based SBA Lender, we are preparing to support the small business community through the Consolidated Appropriations Act 2021 and the Paycheck Protection Program (PPP).

The Allegiance Bank SBA Department and all of our Bank offices in the greater Houston/Beaumont area will assist small businesses in obtaining financing through this program.

The PPP is meant to assist small businesses with support for payroll and other business-related expenses as they deal with the impacts of COVID-19.

CONSOLIDATED APPROPRIATIONS ACT 2021: Paycheck Protection Program (PPP)

Please note that the following information may be subject to change per the U.S. Small Business Administration and the U.S. Department of the Treasury.

The Paycheck Protection Program will be extended until March 31, 2021.

PPP First Draw - For businesses that did not receive a PPP loan in 2020

Eligibility:

  • Business has less than 500 full-time, part-time, or seasonal employees
  • Business was operational before February 15, 2020 and remains operational

Loan Amount Limitations:

  • 2.5 times the average monthly payroll costs and healthcare costs
  • $10 million

PPP Second Draw - For businesses that received a PPP loan in 2020

Eligibility:

  • Business has less than 300 full-time, part-time or seasonal employees
  • Demonstrate a revenue reduction of at least 25% in any quarter of 2020, when compared to the same quarter in 2019
  • Business has or will use the full amount of their first-draw PPP loan
  • Business was operational before February 15, 2020 and remains operational

Loan Amount Limitations:
The maximum second PPP loan amount is the lesser of:

  • 2.5 times the average monthly payroll costs and healthcare costs
  • For businesses classified under NAICS Code 72 - 3.5 times the average monthly payroll costs and healthcare costs
  • $3 million

Note Terms (subject to, but not limited to the following)

  • Full loan amount can be forgiven, subject to meeting certain guidelines
  • Interest rate of 1.00%
  • 5 year maturity
  • No collateral required
  • No personal guarantees required

Business types eligible for First and Second Draw PPP Loans Include

  • All businesses with less than 300 employees
  • Sole Proprietorships
  • Independent Contractors
  • Self-Employed Individuals
  • Certain non-profits
  • Seasonal employers; the new bill has clarified the definition of these to be businesses that operate no more than 7 months within a year or earn no more than a 1/3 of gross receipts within a 6-month period
  • Faith-based Organizations
  • Veterans Organizations
  • Tribal Business Concerns
  • Housing Cooperative

Ineligible Businesses

  • Financial Businesses engaged in the business of lending, such as banks, finance companies and factoring businesses
  • Life Insurance Companies
  • Businesses located in a foreign company
  • Pyramid sale distribution plans
  • Businesses deriving more than 1/3 of gross annual revenue legal gambling activities
  • Businesses engaged in any illegal activity
  • Private clubs and businesses with limit the number of memberships for reasons other than capacity
  • Government-owned entities
  • Businesses principally engaged in teaching, instructing, counseling or indoctrinating religion or religious beliefs
  • Businesses with an Associate who is incarcerated, on probation, on parole, or has been indicted for a felony or a crime of moral turpitude
  • Businesses engaged in live performance or derive revenue through the sale of products or services of a prurient sexual nature
  • Businesses or their Associates that have defaulted on a Federal loan or Federally assisted financing, which resulted in the Federal government to sustain a loss
  • Businesses engaged in political or lobbying activities
  • Speculative businesses

Expenses Covered

  • Payroll (60% of PPP funds must go towards this expense)
  • Group health insurance benefits, paid sick leave, medical and insurance premiums
  • Mortgage or rent payments
  • Utilities
  • Interest on any other debt obligations incurred before the loan period
  • Covered property damage, subject to limitations
  • Covered supplier costs, subject to limitations
  • Covered worker personal protection equipment, subject to limitations

Resources

Allegiance Bank SBA Lending

Retain more working capital and improve the cash flow of your small business.

Allegiance Bank provides SBA loans through a partnership with the U.S. Small Business Administration’s 7(a), 504 and Express loan programs. These loans typically provide the business owner with financing terms not available elsewhere under conventional loan guidelines. SBA loans offer the borrower a lower equity injection (as low as 10%) and longer payment terms (up to 25 years – depending on the use of proceeds). These benefits allow the small business owner to retain more working capital and improve the cash flow of the business.

SBA loans can be used for the following:

  • Purchase, expansion or construction of an owner-occupied building
  • Equipment purchases
  • Business acquisitions
  • Partner buyouts
  • Expansion of a successful franchise to additional locations

Allegiance Bank’s SBA Lending Team has over 75 years combined experience in SBA Lending. All loan decisions and loan closings are local, which improves the SBA loan process.

In addition, Allegiance Bank SBA supports lending to Veteran business owners. Contact our SBA Department about our "Veterans Pledge Program."

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