Update for Existing Capital Access Group Clients

Dear Capital Access Group Clients,

We understand the challenges small businesses are facing due to COVID-19 pandemic. If you are an existing Capital Access Group client, we want you to know that supporting your business during this unprecedented time is our top priority.

We have designed a deferral program for existing clients whose businesses are being impacted by COVID-19. The program provides reduced or no loan payments for up to six months, the maximum deferral allowed by the SBA, to help get your business through these difficult times. The amount deferred will be repaid over a 5 to 10 year period. It could be that following the deferral period, you resume making payments at the regular amount for six (6) months and then go into a higher catch-up amount for 4.5 years. Please keep in mind that interest continues to accrue over the deferral period.

To apply:

Please send the following to servicing@capitalaccess.com, or contact us if you would like us to send a secure filesharing link:

  • A letter describing the impact COVID-19 sheltering or other safety practice mandates have had on your business prompting your request for a deferral of loan payments. Some helpful operational aspects to include, but not limited to, in the description are:

If your business is open and operating:

    1. Briefly describe the extent of operations being conducted (as compared with pre- Covid19 conditions).
    2. Have you augmented your sales, expenses and/or staffing practices? If so, please briefly describe what those changes are.
    3. Are current operations meeting business and personal expense obligations? If not, please briefly describe how the shortfall is being addressed.
    4. Are any further changes in business strategy planned? If so, please briefly describe.

If your business is not open or operating:

    1. Please briefly describe what business and/or operational change(s) including staffing were made, if any, in conjunction with the shutdown.
    2. When restrictions are eased or lifted, how soon do you estimate operations can commence again?
    3. Please provide an anticipated timeline to reach adequate sales/revenue volume to meet operational expenses.
    4. Are any other changes in business strategies planned with respect to current industry conditions or environment? If so, please briefly describe.
  • Operating projections for the next twelve months or, if the business is not open, for the one year following when direct restrictions will be lifted (template here).
  • 2019 federal tax return for business and any guarantor affiliate(s). If 2019 tax return is on extension, please provide the filing extension AND 2019 profit & loss statement and balance sheet if not previously provided.
  • Interim profit & loss statement and balance sheet as of July 31, 2020 or later month-end for business and any guarantor affiliate(s).
  • Business Debt Schedule as of same date of interim balance sheet above for business and any guarantor affiliate(s). Please include any PPP and/or EIDL loan information as applicable.
  • Accounts Receivable AND Accounts Payable aging reports as of same date of interim balance sheet above. Please comment on any account balance(s) 90 days or more past due (i.e. collectability, resupply ability, etc.).
  • Personal Financial Statement (SBA Form 413) on all 20% or more owner(s) and/or individual guarantors.
  • 2019 personal federal tax return for same individuals as above if not previously provided, or extension filing if applicable.
  • Most recent statement from the first mortgage lender reflecting the principal balance, payment, and loan status information.

What to expect:

  • We will do our best to get back to you with an answer or request for any additional information needed as quickly as possible. Please note that we are receiving a large volume of requests and are doing our best to turn them around quickly.
  • If approved, the total amount that was deferred during the period will be amortized into your payments of up to the next ten years in order to minimize the monthly payment increase.
  • Please be advised that during the deferral and catch up period, we will require a semi-annual business financial statement and year-end tax returns (federal only).
  • Real estate taxes and required insurances must be kept current.
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Update on Debt Forgiveness for Existing Capital Access Group Clients: Payments on your SBA 504 loan will be made by the SBA on your behalf for 6 months, beginning today.

The CARES Act provides debt forgiveness for 6 months on all existing SBA 504 loans and those that fund within the next 6 months – ACH payments on your SBA loan will be paid by the SBA for 6 months, starting with today’s payment.

While we knew that the CARES Act that had been signed into law on March 27th would provide forgiveness for existing 504 loans as well as those that fund within the next 6 months, we had yet to receive guidance in terms of what to expect for your April 1st and subsequent payments or what documentation would be required from our clients, and we have just been notified of the following:

The ACH payment for your SBA 504 loan will NOT be debited from your account today, April 1st. Under the CARES Act, SBA will automatically pay the principal, interest, and any associated fees that are owed on a 504 loan in a regular servicing status. The SBA will continue to make these loan payments on your behalf for the 6-month period beginning April 1st, 2020.

This means that your loan payment will NOT be withdrawn today and for the next 5 months. You do not need to request it or do any paperwork – Capital Access Group is handling all the necessary work. If you already started the process of a loan deferment, that will be stopped at this point (you do not need to contact us to do that, it’s already been handled). Please note, this debt forgiveness applies to the SBA second mortgage only, not the first mortgage.

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BREAKING NEWS UPDATE

The $2 trillion economic stimulus package (the CARES Act) just signed in to law 3/27/20 includes 6 months of debt forgiveness for borrowers with existing SBA 504 loans. This is not a deferment, but actual debt forgiveness. For existing SBA 504 loans, all principal, interest, and fees are covered for 6 months. New loans that fund within the next 6 months will also have their principal, interest, and fees paid by SBA for 6 months, starting with the next payment.

If you are an existing Capital Access Group client, we want you to know that we have all hands on deck working to give you immediate relief as you find the best way to get your business through these difficult times. While the funds have been approved, the SBA is currently working to determine how the CARES Act (which includes Debt Forgiveness and the Paycheck Protection Program) will be implemented, and we do not yet have any guidance as to how the new programs will work, when they will be in place, or what will be required from borrowers.

PLEASE NOTE: Organizations stating that they know what the new system is and how it will work, are strictly speculating. That speculation may be well informed, based on the legislation, but please note that we will continue to provide updated information on this page as it becomes available.

Due to the very dynamic nature of this situation, programs and requisite information may change, but we will continue to post updates here as soon as new information becomes available. Please continue to check back here for the latest information. If you have any immediate concerns, please contact us at servicing@capitalaccess.com.

In the meantime, to learn more about the programs and initiatives in the CARES Act, this Small Business Owner’s Guide to the CARES Act provides information about the major programs and initiatives that will soon be available from the Small Business Administration to assist business owners with whatever needs they have right now. When implemented, there will be many new resources available for small businesses, and this guide provides an overview of the programs.
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COVID-19 UPDATE: WE ARE HERE TO HELP.

We understand the challenges small businesses are facing due to COVID-19. If you are an existing Capital Access Group client, we want you to know that we have all hands on deck working to give you immediate relief as you find the best way to get your business through these difficult times. Supporting your business during this unprecedented time is our top priority.

Below you will find information on:

  • Our Quick Deferral Program – for Capital Access Group clients only
  • The SBA Disaster Loan Program – for all small business owners

 

OUR QUICK DEFERRAL PROGRAM

We have designed a temporary monthly loan payment deferral program for existing clients whose businesses are being impacted by COVID-19. The program provides reduced loan payments for up to six months to help cover operating costs.

To apply:

Please send the following to servicing@capitalaccess.com, or contact us if you would like us to send a filesharing link:

  • A detailed letter outlining the impact COVID-19 has had on your business
  • Specify if your business is currently open or if it has been closed due to a government mandate or other reason
  • Specify whether you are currently paying employees
  • Basic operating projections for one year following the end of COVID-19 impact
  • Please outline your plan to help your business recover if COVID-19 is contained in your area within 90 days
  • 12-31-19 and interim financial statements (P&L and Balance Sheet) for most recent month-end (2-29-20 or later) and 2019 Federal Tax Returns when available
  • Personal Financial Statement (SBA Form 413)
  • Business Debt Schedule

What to expect:

  • We will do our best to get back to you with an answer or request for any additional information needed as quickly as possible. Please note that we are receiving a large volume of requests and are doing our best to turn them around quickly.
  • If approved, the total amount that was deferred during the period will be amortized into your payments of up to the next ten years in order to minimize the monthly payment increase.

 

THE SBA DISASTER LOAN PROGRAM

PLEASE NOTE: These loans are not available through Capital Access Group. Businesses must apply through the SBA directly.

The SBA plans to make working capital loans available to small businesses that have been negatively impacted by COVID-19 through their Disaster Loan program. If you need working capital to cover operating expenses, we encourage you to explore this option.

To apply:

  • Apply online here.
  • Update: The link posted above has been updated as of 4pm PST on 3/25/20, and will direct you to a new online application system. We have been informed that the SBA’s Disaster Loan website has been experiencing technical issues with the previous online application system, which they are working to resolve currently. Please use the link above, and we will continue to update information here as it becomes available.

What to expect:

  • These loans offer great rates and terms, 3.75% fixed for 30 years, which is lower than a standard business loan rate and a long amortization period means payments will be low.
  • Please note: Capital Access Group provides SBA 504 loans only, and we are not able to provide SBA Disaster loans or assist you with your application.
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Maple Trade Corporation Secures $11.5M SBA 504 Loan to Expand Paper Goods Division in Hayward, CA

Capital Access was pleased to help Maple Trade Corporation, a wholesaler of “to-go,” eco-friendly, plastic and paper food storage containers, access $11.5M to purchase a 53,413-sf warehouse building to expand operations in the U.S.

Maple Trade was founded 14 years ago by Tsing Ng, who grew up in China with a family history rooted in the manufacturing trade. Tsing always loved machines, according to his wife, Kelly Chen, CFO of the company, and he recognized the opportunity to gain a foothold in the food container industry.

Today, with environmental concerns at the forefront, Maple Trade is moving into food packaging and storage products that are eco-friendly and reduce plastic use. The new space will be integral to the growth of the company’s biodegradable and compostable paper container products division, and it will enable the company to increase its workforce by 25 percent.

The SBA 504 loan’s 90% financing combined with the program’s historically low interest rates made the purchase possible.

“We went to the bank exploring a conventional real estate loan, and the bank referred us to Capital Access Group and the SBA 504 program,” said Kelly. “The monthly payment is low, so we can afford it; and the down payment is less than the conventional loan, so we have more capital to import more goods. The SBA 504 loan helps cash flow a lot.”

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Jacob May Designs Overcomes “Existential Threat,” Buys Property it Was Leasing

Woodworking began as a hobby for Dave Ball, whose full-time career was in environmental remediation, but after taking an apprenticeship as a woodworker, he decided to enter the field on a full-time basis. In 2013, he moved back to the Bay Area and rented a small space in a cabinet shop to start his business, Jacob May Design. Once the business started taking off, he moved to the current location, which had been a woodworking studio for more than 30 years.

But last year, the business faced an “existential threat” when the property Ball was leasing was put up for sale. That’s when he got motivated to buy it himself.

Capital Access Group helped Ball secure a $2.05M SBA 504 loan to purchase the 13,000-sf property located in Oakland’s Lower Bottoms neighborhood.

“Oakland is changing fast, and industrial space is disappearing, so I’m confident this was a good investment,” said Ball. “The main selling point was the ability to put less down, and then the rate turned out to be near an all-time low!”

“If anyone has the opportunity to acquire the property that they operate out of, I recommend making that leap, and the SBA 504 loan is a great way to go,” he said.

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