On Wednesday, Governor John Bel Edwards announced a significant new loan program to aid small businesses. The Louisiana Loan Portfolio Guaranty Program (LPGP) will offer loans of up to $100,000 to Louisiana businesses impacted by COVID-19 with fewer than 100 employees.

To help Main Street and rural businesses sustain operations, the loans will require no payments for 180 days and carry below-market interest rates of no more than 3.5 percent. A total loan pool of $50 million will be quickly disbursed to eligible small businesses across Louisiana.

The program is a partnership of Louisiana Economic Development, which will provide a loan guarantee fund; the Louisiana Bankers Association, whose membership will provide the loans; and the Louisiana Public Facilities Authority, which will administer the program.

“The beauty of this program is we are not competing with the essential financial products offered by the U.S. Small Business Administration — we are complementing SBA,” LED Secretary Don Pierson said. “Our bankers know their customers well. They have confidence in the LPFA to administer this program in a professional, proactive manner; and they have the further confidence of an LED loan guaranty fund that will enhance the security of these loans.”

LPGP loans will provide up to $100,000 in immediate financing to help small firms impacted by COVID-19 meet their payroll, retain employees, pay their rent and mortgages, and keep their lights on and their doors open. Interested businesses may find loan details at OpportunityLouisiana.com/covid19, and a list of participating bankers will be posted at the site by Friday as banks complete their participation agreements.

Through the program, bankers will have the flexibility to extend loan terms for up to five years, while interest rates will be below conventional commercial lending rates and no higher than 3.5 percent. To date, participating banks have requested allocations for about two-thirds of the $50 million in loan capacity available through LPGP.

Louisiana Legislature briefly reconvenes  

On Tuesday, the State Legislature briefly convened to meet the deadline for late bill filings, and then adjourned until an undetermined future date.

A few tourism-related bills were introduced, including HCR 31, which temporarily suspends the Department of Culture, Recreation & Tourism’s cap on the purchase of in-state advertising. This bill filing by Rep. Edmonds follows LTA’s meeting with Legislative leadership detailing the needs of the industry. The suspension of the cap will allow LOT to spend more of its current budget on in-state advertising, aligning with the expectation that international and long-distance travel will take more time to return.

Public health concerns permitting, a special session of the legislature is anticipated later this year.

Paycheck Protection Program forms now available 

Businesses can begin applying for the SBA’s Paycheck Protection Program, a significant provision under the CARES Act, tomorrow. The Treasury department has made loan applications available starting on April 3 for small businesses and sole proprietorships to cover their payroll and other certain expenses through existing SBA lenders.

Starting April 10, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders. Other regulated lenders will be available to make these loans as soon as they are approved and enrolled in the program. Due to the likely high subscription to this program, it is anticipated that not more than 25 percent of the forgiven amount may be used for non-payroll costs.

The fact sheet encourages small businesses to apply for a PPP loan as quickly as possible, as there is a funding cap on the program, and lenders will need time to process loan paperwork. While there is a trade-off between relief benefits under the PPP and certain business tax provisions of the CARES Act (specifically the Employee Retention Credit and payroll tax deferral), you may want to submit an application as soon as possible, and subsequently optimize benefits under the PPP and business tax provisions of the CARES Act before executing loan documents.

Share your #OnlyLouisiana perspective 

The Lt. Governor’s office is asking Louisianans to share our unique perspective as we deal with the challenges of the current days.

“Since we can’t come together at all of the festivals, crawfish boils, fais do-dos, second lines, fishing trips and other celebrations that happen this time of year, let's come together and take that joyful spirit out into Louisiana and beyond,” the Lt. Governor challenged the state’s Bayou Krewe ambassadors. “Let’s share what we’re doing to make our own situations more enjoyable for ourselves, our families, our friends and communities. Let’s show people around the world all of the creative, fun, strange and delicious ways we're dealing with the changes in our lives.”

Whether you are honoring our healthcare heroes with a Louisiana-style song, cooking up delicious Louisiana cuisine or passing a good (socially distant) time with something entirely out of the ordinary, we encourage you to share it. Use #OnlyLouisiana and tag @LouisianaTravel to give LOT permission to share. 

Disaster Loans offer emergency advance of up to $10,000 

The CARES Act also established an emergency grant to allow small businesses and nonprofits that apply for an Economic Injury Disaster Loan (EIDL) to request an advance on that loan, of up to $10,000, which the SBA must distribute within three days. To access the advance, businesses must first apply for an EIDL and then request the advance. The advance may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments.

The EIDL loan application process is streamlined online and only requires 12 months of sales and cost of goods sales information ending January 31, 2020.