Navigating Through Challenging Times Together

By Susan Richwine; First Bank Richmond, Vice President – Marketing Director
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The emergence of the COVID-19 virus in early 2020, ravaged life as we know it. Our daily lives and our nation’s economy were severely impacted when many businesses were forced to close or reduce occupancy to slow the spread of the virus. As the pandemic raged on, businesses and families continued to struggle and desperately needed assistance and guidance to weather the storm 

​The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress in March 2020, and the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 provide fast and direct economic assistance for American workers, families, and small businesses, and preserve jobs for American industries. One of the key components of that plan, the Paycheck Protection Program (PPP) provided a lifeline to many local businesses who were struggling to survive.
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on payroll. First Draw PPP Loans can be used to help fund payroll costs, including benefits, and may also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.
PPP loans will be forgiven if all employee retention criteria are met, and the funds are used for eligible expenses.

• PPP loans have an interest rate of 1%.
• Loans issued prior to June 5, 2020 have a maturity of two years unless the lender and borrower were able to mutually agree to reflect the longer maturity dated. Loans issued after June 5, 2020 have a maturity of five years.
• Loan payments will be deferred for 10 months after the covered period.  If a borrower does not submit their loan forgiveness application within 10 months after the end of the loan forgiveness covered period, the borrower must begin paying principal and interest payments after that period. 
• No collateral or personal guarantees are required.
• Neither the government nor lenders will charge small businesses any fees.

The following entities affected by Coronavirus (COVID-19) may be eligible for a First Draw PPP Loan until March 31, 2021:

• Sole proprietors, independent contractors, self-employed persons, C-Corp, S-Corp, LLC, Independent Contractor, and Self-Employed Individual.
• Any small business concern that meets SBA’s size standards (either the industry size standard or the alternative size standard)
• Any business, 501(c)(3) non-profit organization, 501(c)(6) organization, 501(c)(19) veterans’ organization, Housing Cooperative, or tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
  • 500 employees, or
  • That meets the SBA industry size standard if more than 500
• Any business with a NAICS code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location

The Paycheck Protection Program has been extended and now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan term as their First Draw PPP Loan. For most borrowers, the maximum loan amount of a Second Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million. For borrowers in the Accommodation and Food Services sector, the maximum loan amount for a Second Draw PPP Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million.
A borrower is generally eligible for a Second Draw PPP Loan if the borrower: 

• Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses
• Has no more than 300 employees; and
• Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020

First Bank Richmond is committed to being an integral partner to the communities in which we serve.  Since 1887, we have we prided ourselves on being a community bank that provides resources to enable a community to prosper and thrive. Through the first round of PPP loans, we approved 483 loans resulting in $65.4 million dollars of emergency relief to local businesses. The demand for the second round has been steady to date, and we anticipate working with many local businesses again. The future is uncertain as to when the virus will be contained and when our economy has stabilized. One thing, that is certain will be our commitment to help navigate our community through these challenging times and remain a dedicated and loyal partner to rely on.
Contact your local final institution or visit www.sba.gov or www.treasury.gov for more information and details.