W.T.B. Financial Corp. · OTC:WTBFA
W.T.B. Financial — Investor Presentation (April 2020)
33 slides from W.T.B. Financial's investor presentation, April 2020
Slide 1: General Terms and Timeline
GENERAL TERMS AND TIMELINE
Slide 2: General Terms and Timeline: Paycheck Protection Program Loans
GENERAL TERMS AND TIMELINE Paycheck Protection Program Loans
Slide 3: Paycheck Protection Program Loans
Paycheck Protection Program Loans • Eligible small businesses with fewer than 500 employees may apply for the loan; • The loan can be up to 2.5 times the business’s average monthly payroll costs up to a maximum of $10 million; reduced by any amounts your business pays to individual employees over $1
Slide 4: Loan proceeds must be spent within 8 weeks
• The proceeds of the loan must be spent by the business within 8 weeks of the loan date; • 75% of the proceeds must be spent on payroll expense;
Slide 5: 25% of proceeds for other defined expenses
• 25% of proceeds can be used on other defined expenses including, rent, mortgage interest payments, and utilities; • The loan term is 24 months with a 1% annual interest rate;
Slide 6: Payments deferred for 6 months
• Payments are automatically deferred for 6 months – however interest does accrue during the deferral period; • After the deferral period, any amount of the loan left outstanding and any interest accrued will be repaid with fully amortized interest and principal payments over 18 months.
Slide 7: Loan Forgiveness
LOAN FORGIVENESS The forgiveness is dependent on:
Slide 8: Forgiveness depends on proper loan calculation
1. The business having properly calculated its loan amount at application;
Slide 9: Forgiveness depends on deploying funds in 8 weeks
1. The business having properly calculated its loan amount at application; 2. Whether the business fully deployed the loan funds during the 8 week loan deployment period; and
Slide 10: Forgiveness depends on qualified expenses
1. The business having properly calculated its loan amount at application; 2. Whether the business fully deployed the loan funds during the 8 week loan deployment period; and 3. Whether the loan funds were spent on qualified expenses in the qualified amounts.
Slide 11: 8 Week Deployment Period
8 WEEK DEPLOYMENT PERIOD
Slide 12: 8 Week Deployment Period: For Qualified Expenses
8 WEEK DEPLOYMENT PERIOD For Qualified Expenses
Slide 13: 75% of funds on qualified payroll costs
• 75% of the funds must be spent on paying qualified payroll costs for your employees – remember you cannot use the funds for any person’s compensation in excess of $100,000.
Slide 14: 25% of funds on health care, rent, interest, utilities
• 25% of the loan funds can be spent on group health care benefits being paid for employees currently on sick, medical or family leave, and related insurance premiums, rent, mortgage interest, for interest payments on loans taken before February 15 of this year and on utilities.
Slide 15: Refinancing an EIDL disaster recovery loan
• You may also refinance a disaster recovery loan or EIDL issued by the SBA.
Slide 16: Agreeing to re-employ workforce
• By accepting the funds your business is agreeing to re-employ its workforce if you reduced it. Your business’s forgiveness amount will be reduced by the percentage difference between the average number of FTE on your payroll during the 8 week deployment period against the average number of employe
Slide 17: Example of reduced forgiveness after layoffs
• For example, if your business had 100 employees on average in January and February of this year, and you had to lay off all but three employees. Your business’s maximum loan forgiveness would be 3% of the loan amount.
Slide 18: Rehiring saving mechanism before June 30, 2020
• There is a saving mechanism in the PPP – if you rehire all of your employees before June 30, 2020 and return them to their same pay level, the loan forgiveness will not be reduced by the reduction in payroll and FTE during the 8 week deployment period.
Slide 19: The Problem with the New SBA Interim Rules
THE PROBLEM WITH THE NEW SBA INTERIM RULES
Slide 20: 75% of loan required for payroll
75% of the loan amount is required to be spent on payroll expenses.
Slide 21: Impossible to meet without rehiring
It is impossible to meet this requirement without rehiring at least 75% of your workforce almost immediately.
Slide 22: Hard to deploy payroll funds when workforce laid off
It seems practically impossible to deploy 75% of the funds on payroll costs when your workforce is laid off.
Slide 23: Rehiring may make little sense if closed
If your business cannot re-open during this 8 week deployment period, rehiring workers might make little sense.
Slide 24: Forgiveness Period
FORGIVENESS PERIOD
Slide 25: Applying to the Bank for forgiveness
After the 8 week deployment period, your business will be able to apply with the Bank for forgiveness of all or part of your PPP loan.
Slide 26: Documentation required to prove fund use
• Your business will be required to submit documentation that proves that you fully deployed the Program funds, that the funds were used for a proper purpose and that the funds were spent in the proper ratio between payroll costs and other qualified costs.
Slide 27: Unclear certification requirements
• It is unclear whether the business or the owners will need to submit further certifications or statements when applying for forgiveness.
Slide 28: Forgiveness process details not yet published
To date, none of the details of the process for forgiveness have been published.
Slide 29: Bank assesses package and submits to SBA
• Once your business submits a complete forgiveness package, the Bank will have to assess your business’s records against the standards that will be published and determine the proper amount of forgiveness. The Bank will submit this final calculation to the SBA for review and final approval.
Slide 30: Submit forgiveness application before deferral ends
• You will want to submit your forgiveness application well before the 6 month deferral period ends and your business must start making principal and interest payments.
Slide 31: SBA forgives only outstanding principal
The SBA will only forgive outstanding principal on the loan.
Slide 32: Repayment over remaining 18 months
• Your business will start making fully amortized, principal and interest payments after the end of the 6 month deferral over the remaining 18 months of the loan term.
Slide 33: No pre-payment penalty
• There is no pre-payment penalty so you can pay the outstanding balance at any time.
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