An overview of the Paycheck Protection Program. Summarizes Section 1102 of the CARES Act for the economic response to COVID-19 business losses.

1. COVID-19 ECONOMIC RESPONSE
Issue Summary Series
Summary #1:
LOANS FOR PAYROLL & OTHER EXPENSES
Section 1102 of CARES Act; Paycheck Protection Program

2. TEDA Information
• TEDA is working on summaries of all available business information due to the COVID-19
health response and ensuing economic damages.
• TEDA charges no fees for any services to business
• Set up a centralized system to respond to businesses:
• Email: bizresponse@tpeda.org
• Phone: 985-633-1887
• Facebook: www.Facebook.com/TerrebonneEDA
• Due to volumes, we ask that you leave any information you can and we will return your message as quickly as
possible
DISCLAIMER: These summaries are intended to provide general guidance based upon staff readings of the legislation and other
available information. Business owners should do due diligence before making any business decisions or taking any debt. TEDA offers
no accounting or legal advice.

3. About the Paycheck Protection Program
• Creates a loan fund of $350 billion for expedited loans
• Loans will be handled through the SBA 7(a) loan program
• You will apply for these loans through your local banker, not through the SBA
• Federal government guarantees 100% of the loan
• Option to convert to a forgivable loan based on proper usage of the loan proceeds
• Loans are based on certain qualified expenses
This program is intended to help the recovery of businesses affected by the public health
response to COVID-19 through created enough liquidit to replace certain operational
expenses.
This program is NOT intended to replace profits lost during this time or to refinance long-
term debts.

4. Terms
• Maximum Loan Amount: $10M; see individual loan amount qualification on next slide
• Maximum Interest Rate: 4%
• Maximum Term: 10 years
• No prepayment fees
• Possible deferment of 6-12 months
• No borrower or lender fees

5. Calculating Maximum Loan Amount
• No business can receive more than $10M
• Covered period is:
• 12 weeks beginning February 15, 2020 OR
• 12 weeks beginning March 1, 2020
• Calculation cannot exceed $100K annual prorated benefit for any employee
• The following items may be considered qualified expenses for calculation loan amounts:
• Salary, wage, commission, or other similar compensation
• Cash tips or equivalent
• Payments for vacation, parental leave, family leave, medical or sick leave
• Allowance for dismissal or separation of employment
• Payments for required provisions of group health care benefits – including associated insurance premiums
• Payments for retirement benefits
• Payments for associated state or local taxes on compensation of employees
• Certain qualification exist for each of these items. Please consult your tax advisor for detailed explanation.
• Maximum Loan Amount = 2.5 months qualified expenses

6. Calculating Maximum Loan Amount
Example Case for Company XYZ
5 full-time employees
Average salary of $50K annually
Group health insurance premiums for all employees is $9,000 per year
Total Annual Salary: 5 employees x $50,000 = $250,000
Total Annual Health Benefit = $9,000
Annual Qualified Expense: $250,000 + $9,000 = $259,000
Convert to Monthly: $259,000 / 12 = $21,583
Maximum Loan Amount: $21,583 x 2.5 months = $53,958
In this example, the company would qualify for up to $53,958 loan.

7. Loan Proceed Uses and Forgiveness
• Loan proceeds can be spent of the following items:
• Payroll & Benefits:
• Cost of continuation of group benefits including paid sick, medical, or family leave
• Employees salaries, commissions, or other similar compensation
• Operations:
• Payments of interest on any mortgage obligation
• Payments of principal on mortgage are NOT eligible
• Rent, including rents due from a lease obligation
• Utilities
• Interest on other debts
• Payments made under these categories for 8 weeks following the origination date of the
loan may be eligible for loan forgiveness if the obligations were in effect prior to
February 15, 2020.

8. Loan Proceed Uses and Forgiveness
Example Case for Company XYZ
5 full-time employees
Average salary of $50K annually
Group health insurance premiums for all employees is $9,000 per year
Rent of $2,000 per month
Utilities of $1,000 per month
Received loan of $53,958
Monthly Payroll Expense: (5 employees x $50,000) / 12 = $20,833
Monthly Group Insurance Premium: $9,000 / 12 = $750
Total Monthly Uses = $20,833 (payroll) + $750 (insurance) + $2,000 (rent) + $1,000 (utilities) = $24,583
Two Months of Eligible Expenses: $24,583 x 2 = $49,166
In this example, the company would qualify for $49,166 of loan forgiveness, leaving a
balance of $4,792 on the original loan of $53,958.

9. Questions?
bizresponse@tpeda.org
985.633.1887
Leave contact information and questions
Matt Rookard
mrookard@tpeda.org
Cell: 504.460.2096