Paycheck Protection Program (PPP)
Important Update: The deadline for the PPP is May 31st, but on May 4th the SBA announced that it ran out of money for most borrowers. However, $8 billion is still available for Community Financial Institutions, which are still accepting applications. More info below under PPP Lenders.
General Info about the PPP
The Paycheck Protection Program is a business loan program established to help businesses, self-employed workers, sole proprietors, nonprofit organizations, and tribal businesses continue paying their workers. Seafood businesses with or without employees, sole proprietors, and deckhands are all eligible to apply. If you use the funds for the intended purposes, the loan can be forgiven. The deadline for applying is May 31st, 2021.
First Draw PPP loans: If you have not received a PPP loan before, First Draw PPP loans are available to you.
Second Draw PPP loans: If you have previously received a PPP loan, certain businesses are eligible for a Second Draw PPP loan.
PPP Frequently Asked Questions (April 6, 2021)
Note: As of June 27th, 2020, fishing boat owners can count their 1099 crew as part of their payroll calculations (previously, fishing businesses were not allowed to account for crew wages when calculating payroll costs for a PPP loan). "A fishing boat owner may include compensation reported on Box 5 of IRS Form 1099-MISC and paid to a crewmember ... as a payroll cost in its PPP loan application."
PPP Lenders
Important Update: On May 4th, 2021, the SBA announced that it had run out of funding for most borrowers. However, there is still $8 billion set aside for community financial institutions, which includes “minority depository institutions” and “community development financial institutions” (CDFI). MDIs and CDFIs, known as mission-driven banks, are a small set of banks across the nation that serve minority, low- or moderate-income (LMI), and rural communities. A searchable list of CDFI’s can be found here. A list of MDI’s can be found here or here.
The following lenders are still accepting PPP applications:*
Lendistry - online lender and CDFI - they will be accepting applications until May 17th. Read the email instructions that they sent to us here.
Santa Cruz Community Credit Union - if you are already a member of the credit union, they are still accepting PPP applications (as of May 5)
RCAC is a CDFI that is still accepting applications as of May 13th, but only from individuals whose business or home address is in a community of fewer than 50,000 people. He said “we’re very busy and funding is subject to eligibility and funding availability” but might be worth reaching out.
*We have been reaching out to other CDFI’s and we’ll update this list as information comes in.
Other Resources:
Find Eligible Paycheck Protection Program Lenders - this link includes a lender search tool and application form.
Use www.sba.gov/lendermatch to put your desired PPP loan amount and receive interested lenders within 48 hours.
The Cal Coastal Small Business Development Center said that fishermen from Monterey and San Benito County can sign up on their website, and they will support you as you try to find PPP loans and/or other resources.
CAMEO - California Association for Micro Enterprise Opportunity is also a good resource for small business owners.
Loan Forgiveness
Simplified application for loans under $50,000 - Updated 10/8
PPP Loan Forgiveness Application and Instructions - Updated 6/17
EZ PPP Loan Forgiveness Application and Instructions - Updated 6/17 (This application requires fewer calculations and less documentation and can be used by borrowers that are self-employed or have no employees).
Taxes on the PPP
Ordinarily, a forgiven loan qualifies as income. However, Congress chose to exempt forgiven PPP loans from federal income taxation. Many states, however, remain on track to tax them by either treating forgiven loans as taxable income, denying the deduction for expenses paid for using forgiven loans, or both.
On Thursday, April 29th, Governor Newsom signed California Assembly Bill 80 which partially conformed with the Federal tax treatment of Paycheck Protection Program loans. In addition to the PPP loan proceeds being tax-free, the expenses paid with those funds are also fully deductible with one important requirement: a taxpayer must have experienced a 25% or greater reduction in gross receipts in any calendar quarter in 2020 as compared to the same calendar quarter in 2019.
We recommend that you reach out to your accountant for more information.
PPP Survey - Tips from Other Fishermen
Last updated April 28th - We’ll add more tips here as more responses come in. If you have tips to share, please fill out this survey - thanks!
We conducted a survey of fishermen regarding the PPP loan, with the goal of helping others who want to apply before the May 31st deadline. We’ve received 16 survey responses so far from fishermen in California, Oregon and Washington, along with several other direct messages. Seven of the survey respondents have applied for a loan. Of those who shared, the average loan was $20K. Of those who received loans, two have been fully forgiven and two haven’t yet tried. Among the tips shared:
Lenders:
One fisherman stated, “it seems like everyone I know who succeeded worked through a small lender, not a large bank.
“I used Peoples Bank, was successful! That was after Wells Fargo failed at 4 attempts!”
Among the survey respondents who succeeded, they got loans from
Scroll down or click here for a list of other PPP lenders including some in Central California.
Other feedback:
“We said we have zero employees, and then we were successful. Once you say you have employees, it changes things.”
“You don’t have employees. You are the one and only employee.”
“Don’t give up. Be honest and make sure all your numbers line up.”
“Don’t give up. Do a profit and loss for 2019 and 2020.”
“Get legal help.”
“Do it!”
“Went through Bank of the Pacific they need schedule C for either 18 19 or 20 if u have already filed. Had check within week and a half. It was super easy. For me anyways.”
Webinars to help fishermen apply
Note: These webinars are from spring/summer 2020, so do not include some of the updates to the program, such as the June 2020 updates regarding loan forgiveness, as well as updates regarding 1099s, but much of the information still applies.
On May 21st, 2020, the Monterey Bay Fisheries Trust partnered with California FarmLink and PCFFA to host this webinar on the Paycheck Protection Program and its relevance to fishermen and fish businesses. Brett Melone of CA FarmLink delivered a presentation, followed by Q&A and discussion.
On April 23rd, 2020, the Maine Coast Fishermen's Association hosted a fishermen-focused webinar to help those in the fishing industry navigate the Paycheck Protection Program, Economic Injury Disaster Loans, and/or the new state unemployment benefits.