Filing for Federal Business Funding

By Phil Pendergraft, President, The Molokai Dispatch

Last Friday, just after 10 a.m., The Molokai Dispatch filed its application for assistance under the Payroll Protection Program (PPP) of the CARES Act. The filing was accepted by the Bank of Hawaii and assigned a reference number. We learned some things through the application process we think might be helpful for fellow Molokai businesses.

The PPP is designed to provide assistance to small businesses, generally defined as having less than five hundred employees, in meeting payroll and other key costs through this diffi-cult time. If a business keeps its staff through the eight weeks following the loan, then the amount of the payroll costs during this period will be forgiven and the loan balance re-duced. Up to 25 percent of loan proceeds may be used for other specifically identified costs, such as mortgage or lease payments, and are also eligible to be forgiven. Loan amounts will be bear interest at one percent and must be repaid within two years. It is anticipated that almost all of funds loaned under the PPP will be forgiven and not repaid.

For the Dispatch, the filing followed two days of uncertainty about the requirements of the program, with the rules and applications changing seemingly every few hours. Late Thurs-day afternoon, Dispatch management and ownership were scrambling to complete individ-ual applications and certifications totaling nearly 20 pages in order to be ready when the program opened on Friday. By Friday morning, the application had changed completely and only required the signature and certification by one Dispatch executive.

While each bank may have slightly different requirements, the Bank of Hawaii made the process easy. A completed SBA application, which was only two pages; payroll verification documents which were satisfied by providing IRS Forms 940 and 941; a certification that all employees of the Dispatch live in the US; and copies of driver’s licenses for each owner were all that was required for the application, although the Dispatch also provided 2019 tax information for additional reference. If not already on file with the bank, business or-ganizational documents would also have been required for the application. It was all done online and required only a few minutes to complete. The response to the filing from the bank was the sequence number and a commitment to reach out promptly with next steps.

The national press is full of stories about larger banks on the mainland being unprepared for the opening of the PPP, and delays and difficult requirements frustrating desperate cus-tomers. At the Bank of Hawaii, the Dispatch experienced none of these things. Of course, the journey has just started, and the true measure of the program will come in the approv-al process. Will the Bank of Hawaii, acting under SBA guidelines, approve a loan for the Dispatch, a truly small business which likely would not qualify on its own, but which fits neatly in the definitions of the program and which is an important part of the community? This part of the story is still to be written.

To apply for a PPP loan with the Bank of Hawaii, simply go to their website at boh.com and follow the link for business assistance to the COVID-19 virus to the link “Apply for the PPP Loan”. Download and complete the application, upload it and some basic tax and ownership information, and the application will be complete. Businesses and nonprofits with less than five hundred employees are generally eligible for loans under the PPP. More specific eligibility rules are defined in the application. Other banks may have slightly dif-ferent requirements than the Bank of Hawaii. More information on the PPP and other SBA regular and emergency programs can be accessed at sba.gov.