SBA COVID19 PROGRAMS Paycheck Protection Program PPP Section

SBA COVID-19 PROGRAMS • Paycheck Protection Program (PPP) • Section 36 (First Draw) and Section 37 (Second Draw) • Economic Injury Disaster Loan (EIDL) • Shuttered Venue Operator Grants (SVOG) • Targeted EIDL Advances • Subsidy Payments for Existing Loans--Extended • Regular Loan Programs • 7(a) Loans • 504 Loans • Entrepreneurial Assistance • Small Business Development Centers (SBDCs) • Women’s Business Centers (WBCs) 2

Economic Aid Act Funding Increased Appropriations: $325 B • $284. 45 B Additional Funding for PPP Loans $15 billion for loans made by community financial institutions $15 billion for loans made by banks, credit unions, Farm Credit lenders with less than $10 billion in assets $35 billion for new first-time PPP borrowers $15 billion for first-time PPP borrowers: (1) with <= 10 employees, or (2) located in low-income, moderate-income neighborhood and loan <= $250 K $25 billion for second-time PPP borrowers: (1) with <= 10 employees, or (2) located in lowincome, moderate-income neighborhood and loan <= $250 K • • • $25 M for Minority Business Development Centers under the Minority Business Development Agency (MBDA) to assist minority business enterprises with technical assistance, such as applying for PPP $15 B for grants for shuttered live venues, theaters, museums, and zoos $20 B for the EIDL Advance program, of which $20 M is for the SBA IG $3. 5 B for continuing the Section 7(a) Debt Relief program (subsidy payments) $2 B to carry out SBA lending enhancements 3

Paycheck Protection Program Loans (PPP) 4

SBA COVID PPP Statistics As of January 24, 2021: • As of a Jan. 24, 2021 report, the SBA approved 400, 580 PPP loans totaling more than $35 B in the newest round of PPP funding. • Over 65% of these PPP loans have been for $50, 000 or less and the average PPP loan size is $87, 000. • As of mid-January, the SBA has forgiven more than 1. 1 million PPP loans for over $100 billion, providing an extraordinary amount of critical relief to America’s small businesses. • The SBA has so far received 1, 346, 125 forgiveness applications for approximately $170. 5 billion and made payment on nearly 85% of them. 5

PPP Overarching Points • • Funding through SBA Participant Lenders Guarantee Amount: 100% guarantee Deadline for Funding: March 31, 2021 Covered Period: Borrower may select from 8 to 24 weeks Second Draw PPP Loans Available Increases to First Draw PPP Loans in Limited Cases Simplified Application: loans up to $150 K Forgiveness Benefits: if loan proceeds used for eligible expenses 6

PPP – First and Second Draw Loans Eligible Entities: • Small businesses— 500 or fewer employees (First Draw Loan) or 300 or fewer employees (Second Draw Loan) • Partnerships, LLCs, corporations • Tribal businesses • Agricultural Businesses – Ranchers/Farmers • Nonprofits [501(c)(3)] and veteran organizations [501(c)(19)] • Religious Institutions • Certain nonprofit hospitals • Electrical & Telephone Coops • Sole proprietors, independent contractors, self-employed individuals • Applicant must be in operation on or before February 15, 2020 (for loans made on or after 12/27/20) 7

PPP – First and Second Draw Loans New Eligible Entities: • Housing cooperatives • Chambers 501(c)(6) • Local newspapers, television, radio • NAICS 511110 or 5151 • Makes good faith certification that loan proceeds will be used to support expenses at local level • Destination marketing organizations • 501(c) organization • State or political subdivision of a state • Engaged in marketing or promoting communities & facilities to businesses and leisure travelers • Assisting with location of meeting & convention sites • Providing travel information on attractions, lodging, restaurants • Providing maps • Organizing group tours • Engaged in and derives majority of operating budget to providing live events 8

PPP – First and Second Draw Loans Ineligible Entities: • Small business types such as: • • • Financial businesses primarily engaged in lending Passive businesses owned by developers/landlords Life insurance companies Pyramid sale distribution plans Private clubs • Small businesses engaged in illegal activity • Small businesses whose 20%+ owners have legal issues • Small businesses or owners that have currently defaulted federal loans or have caused prior loss to federal government • Entities who receive Shuttered Venue Grant if applying for loan after Dec 27, 2020 • Entities primarily engaged in political activities or lobbying • Entities created under laws of China or has board member from China • Publicly traded entities • Entities that have permanently closed • In bankruptcy at time of application or before loan disbursed 9

PPP – First and Second Draw Loans Use of Loan Proceeds: • Payroll costs • • • Salary, wages <= 100 K, commissions Vacation, sick leave, severance, health care benefits, retirement benefits Special rules for self-employed, LLCs, partnerships, agricultural Group insurance payments Mortgage interest payments Rent/Utilities Interest on pre-existing debt Refinance of EIDL loan Operations expenditures Property damage costs Supplier costs Worker protection expenditures and adaptive measures 10

PPP First Draw Loan Terms: • Amount – Up to $10 million • Based on formula, not projections • 2. 5 x the applicant’s average monthly payroll costs over the last 12 months + the outstanding amounts on any EIDL loan obtained after January 20, 2020; or • Maturity – 5 years • Interest rate – 1% • Complete payment deferment – until forgiveness amount is remitted by SBA to Lender 11

PPP Second Draw Loan Terms: • Amount – Up to $2 million • Based on formula, not projections • 2. 5 x the applicant’s average monthly payroll costs over 12 months + the outstanding amounts on any EIDL loan obtained after January 20, 2020 • If in business less than 12 months, calculate total payroll expenses up until borrower applies and divide by number of months • 3. 5 x for businesses in NAICS Code 72 (accommodations and food services) • The relevant 12 -month period is CY 2019, CY 2020, or the 12 -month period prior to when loan is made • For farmers and ranchers, use Schedule F gross income up to $100 K • For self-employed, use net profit from Schedule C up to $100 K • For partnership, use net earnings from 1065 K-1 up to $100 K • Maturity – 5 years • Interest rate – 1% • Seasonal employers may use any 12 -week period from Feb 15, 2019 to Feb 15, 2020 • Single corporate groups may not get more than $4 million total 12

PPP Second Draw Loan Terms Additional Requirements: • Was eligible for and previously received a PPP First Draw Loan • Use full loan amount only on eligible expenses before the PPP Second Draw Loan is disbursed • Has no more than 300 employees • Can demonstrate at least a 25% reduction in gross receipts between the same quarters in 2019 and 2020: • If not in business 1 Q or 2 Q of 2019, then compare any of the 4 quarters in 2020 to 3 Q or 4 Q in 2020 • If not in business 1 Q-3 Q of 2019, then compare any of the 4 quarters in 2020 to 4 Q 2019 • If not in business in 2019, then compare 2 Q, 3 Q, or 4 Q of 2020 to 1 Q 2020. • Gross receipts include revenue in whatever form from whatever source, including sales, services, interest, dividends, rents, royalties, fees • Receipts = total income + cost of goods sold – net capital gains/losses • Gross receipts do not include taxes collected for a taxing authority, proceeds from transactions with foreign affiliates • Add gross receipts of all affiliates (except NAICS 72) • For non-profit and DMOs, see section 6033 of IRC • Doesn’t include amount of any forgiven First-Draw PPP loan 13

Increases to First Draw Loans PPP Loan Increase Requests: • • Specific Borrower Types • Partnership – may request increase to include appropriate partner compensation if not included • Seasonal Employers – may request increase to account for new 12 -week window • Farmers & Ranchers – may request increase to account for new loan amount calculations afforded farmers and ranchers Fully Repaid Loans • If lender reported loan as “fully repaid” prior to 12/27/20 and lender has not received a forgiveness payment, the business may reapply for a new First-Draw Loan in an amount for which the borrower is eligible under current PPP rules. This usually applies where borrower returned full amount of original loan Partially Repaid Loans • If borrower returned or repaid some of its First-Draw loan proceeds and lender has not received a forgiveness payment, the business may request a loan increase and redisbursement of funds equal to the difference between the amount retained by the borrower and the amount previously approved Borrowers that did not accept full amount of FD loan • If lender reported loan as partially disbursed and did not process a decrease of the loan in ETran, lender may make a second disbursement to the borrower up to the full amount • If lender processed a decrease in ETran, lender may process an increase on the loan. 14

Increases to First Draw Loans PPP Loan Increase Requests: • Borrower may request increase even if loan fully disbursed or lender has submitted Form 1502 • Increases can be made only by the Lender of Record (current holder of loan) • Increase request must be submitted electronically before 3/31/21 • Lenders may approve increases starting on 1/25/21 15

SBA Requirement Waivers: • • Waives both the borrower guarantee fee and annual lender fee Waives credit elsewhere requirement Waives collateral and personal guarantee requirements Waives prepayment penalties 16

PPP Application Process Requirements: • Submit through lender using Form 2483 for First Draw and 2483 -SD for Second Draw Loan • Gather and submit payroll documentation to lender • If not self-employed, submit Form 941 and state quarterly wage unemployment insurance tax reporting forms • If self-employed with employees, submit Schedule C, Form 941 • If self-employed with no employees, submit Schedule C, 1099 -Misc • For loans > $150 K, documents to establish revenue reduction • Make required certifications • • • Made by authorized representative Applicant won’t receive another Second-Draw PPP Applicant realized a 25% revenue reduction Applicant received a First-Draw PPP and will have used full loan amount for eligible expenses Applicant not primarily engaged in political or lobbying activities • Gather revenue loss documentation for Second Draw Loan 17

PPP Forgiveness Specifics: o Covered Period: from 8 weeks to 24 weeks from date of loan origination – at borrower’s choosing o Forgiveness Amount: equal to the amount spent by the borrower during the covered period on eligible expenses: Payroll Costs (must be at least 60% of forgiveness amount) Non-payroll Costs: mortgage interest, rent, and utilities Covered Operation Expenditures: software, cloud computing, HR/accounting needs Covered Property Damage Costs: damage due to public disturbances that are not covered by insurance Covered Supplier Costs: payments to suppliers for goods that are essential to the business’s operations Covered Worker Protection Expenditures: PPE and adaptive investments to comply with health regs For Self-employed: Payroll costs up to $100 K compensation EIDL Advance is no longer deducted from the amount o Process: • Business submits application and supporting documentation to lender • Simplified application process for loans up to $150, 000. Form 3508 S. • Lender has 60 days to issue a decision on the forgiveness request 18

Forms and Guidance • Updated PPP First Draw Borrower and Lender Forms • Form 2483 – First Draw Borrower Application • Form 2484 – First Draw Lender Guaranty Application • New PPP Second Draw Borrower and Lender Forms • Form 2483 -SD – Second Draw Borrower Application • Form 2484 -SD – Second Draw Lender Guaranty Application • New PPP Guidance and Resources • • Interim Final Rules Top-line Overview of First Draw PPP Loans Top-line Overview of Second Draw PPP Loans Procedural Notices (modifications to forms: 3506, 3507, 750 CA (PPP only) 19

Shuttered Venue Operator Grants (Save Our Stages) 20

SHUTTERED VENUES--GRANTS Eligible Entities (Save our Stages—ODA): o Live venue operators or promotors, theatrical producers, live performing arts organization operators, museum operators, motion picture theatre operators or talent representatives o Fully operational on February 29, 2020 o Gross earned revenue loss of at least 25% from one quarter in 2020 as compared to 2019 o Intends to resume operations o Not owned or controlled by entity on national securities exchange or receiving >10% from federal funding o Hasn’t received a PPP loan o Employee working 30+ hours = 1 FTE; working 10 -30 hours =. 5 FTE o For first 60 days, $2 B set aside for businesses with no more than 50 employees 21

SHUTTERED VENUES--GRANTS Eligible Entities: Live venue operators or promotors, theatrical producer, live performing arts organization operators Defined performance and audience space Mixing equipment, a public address system, and a lighting rig Engages 1+ individuals to carry out not less than 2 delineated functions Paid ticket or cover charge to attend most performances and artists are paid fairly. Performances marketed through printed or electronic publications, on websites, or social media Museum operators Museum is principal business activity Indoor exhibition spaces are a component and have been subjected to pandemic occupancy restrictions At least 1 auditorium, theatre, or lecture hall with fixed audience seating and regular programming Motion picture theatre operators At least 1 auditorium that includes a motion picture screen and fixed audience seating A projection booth or space containing not less than 1 projector A paid ticket charge to attend Movies are marketed through showtime listings in printed or electronic publication, websites, social Talent representatives 70%+ of operations is representing or managing artists and entertainers 22

SHUTTERED VENUES--GRANTS Amount: • • • Up to $10 million Can get second grant up to 50% of amount of first grant In first 14 days, grants only to eligible entities that have had 90%+ revenue loss. Next 14 days, 70%+ loss If in operation on 1/1/19, grant amount is 45% of gross earned revenue during 2019 If in operation after 1/1/19, grant amount is average monthly gross earned revenue for each month in operation in 2019 multiplied by 6 Revenue based on period from 4/1 through 12/31, 2019 and 2020 Use of Grant Proceeds: • • • May be used for costs incurred from 3/1/20 through 12/31/21 Can use 2 nd grant for expenses through 6/20/22 Must return any amount not used within 1 year of grant disbursement (or 18 months for 2 nd grant) Payroll costs, rent, mortgage, utilities, PPE, and other ordinary and necessary business expenses Prohibited expenses – purchase real estate, payments on loans originated after 2/15/20, relending, politics 23

SHUTTERED VENUES--GRANTS Getting Ready: • • • Register for a DUNS number Register in the System for Award Management (SAM) system (https: //beta. sam. gov Beware of scams that want to charge you to register. The system is free. Gather documentation for number of employees and monthly revenues Determine gross earned revenue loss experienced between 2019 and 2020 24

Economic Injury Disaster Loans/Grants (EIDL) 25

Economic Injury Disaster Loans-EIDL: These are direct loans made by SBA (not through private ODA lenders) Eligibility: • Small businesses – must meet SBA size standards (revenue or 500 employees or less) • Private non-profit organizations and small agricultural coops • Physically located in declared disaster area • Have suffered, or likely to suffer, substantial economic injury • No credit elsewhere (businesses show there is no credit elsewhere) • Independently owned and operated Loan Terms: • Amount – Up to $2 million • Interest rate – 3. 75% for small businesses, 2. 75% for nonprofits • Maturity – up to 30 years (determined on a case-by-case basis, based upon each borrower’s ability to repay) • Complete payment deferment – for first year 26

Economic Injury Disaster Loans EIDL: These are direct loans made by SBA (not through private lenders) Use of Proceeds: • Pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact • May not be used to refinance long-term debt Loan Requirements: • • No credit elsewhere (businesses show there is no credit elsewhere) Acceptable credit history Repayment ability All loans over $25, 000 must be secured with available collateral 27

Targeted EIDL Advance--ODA Advance Amount: Up to $10 K ($1 K per employee) • ONLY for entities in low-income communities--full $10 K is given • ONLY for entities in low-income communities that received EIDL advance--they will receive additional funds up to $10 K • Have suffered a greater than 30% reduction in revenue during an 8 -week period beginning on March 2, 2020 or later • Have not more than 300 employees Covered Period: 1/31/20 – 12/31/21 Targeted EIDL Grant – Impact on Loans: • Emergency grant amount will be subtracted from your EIDL loan amount • Grant will not be reduced from forgiveness amount of PPP • No action is required for those seeking Targeted EIDL Advance. SBA will reach out to those who either received less than a $10 K CARES Act EIDL Advance or no CARES Act EIDL Advance funds 28

Existing SBA Program Enhancements Subsidy Payments 29

EMERGENCY ENHANCEMENTS TO SBA’S TRADITIONAL LENDING PROGRAMS 7(a) Loans: o Guarantee on 7(a) loans increased to 90% until October 1, 2021 (if Administrator determines) o No guarantee fee or annual fee (or reduced if Administrator determines) o Express Loans: o o Loan amount remains at $1, 000 until October 1, 2021, then goes down to $500, 000 (was $350 K before) Guarantee is 75% for loans $350 K and under, 50% for loans over $350 K 504 Loans: No SBA participation fee (50 bps) to the TPL CDC will not charge the 1. 5% processing fee (SBA will reimburse CDC for the fee) Low-interest refinancing not involving expansion Express loan processing authority for accredited lenders for loans $500 K or less (through 9/30/23) (if Administrator determines) o Can refinance senior loan on existing project if combined balance not more than 90% of project value o o Microloan Program: o Loan maturity increased from 6 to 8 years o Intermediaries can borrow up to $10 million o More technical assistance funding for rural areas 30

SUBSIDY PAYMENTS FOR EXISITING SBA LOANS Specifics: • Existing borrowers will have 3 more payments made for them by SBA • Borrowers considered to be underserved will have another 5 payments made for them (8 total) • SBA will pay principal, interest, and fees for loans approved 2/1/21 9/30/21 • Only receive payments on one loan approved after CARES Act enactment • No subsidy for PPP loans 31

Entrepreneurial Assistance • Small Business Development Centers (SBDCs) • • • Partnership between SBA & Higher Education 15 locations around the state Free counseling Bilingual Free and low-cost training www. utahsbdc. org • Women’s Business Centers (WBCs) • • • Partnership between SBA & SL Chamber Locations in Salt Lake and Cedar City Free counseling Free and low-cost training https: //wbcutah. org 32

Contacts Utah District Office: • 801 -524 -3209 • Utahgeneral@sba. gov Office of Disaster Assistance: • Sba. gov/disaster • disastercustomerservice@sba. gov • 1 -800 -659 -2955 Rapid Response Team: • coronavirus. utah. gov/Business Websites: https: //www. sba. gov/funding-programs/loans/coronavirus-relief-options/paycheckprotection-program https: //home. treasury. gov/policy-issues/cares/assistance-for-small-businesses 33