Last updated on 4/9/2020
On April 1, 2020, Louisiana Governor John Bel Edwards announced a partnership between Louisiana Economic Development (LED), the Louisiana Bankers Association (LBA) and Louisiana Public Facilities Authority (LPFA) to create the Louisiana Loan Portfolio Guaranty Program (LPGP). The LPGP hopes to provide small businesses with loans up to $100,000 to cover business expenses such as payroll expense, rent, or mortgages due to the COVID-19 pandemic. The following is a summary of relevant requirements and terms of the LPGP.
Eligibility, Terms, and Conditions
- Who: For-profit small businesses that are domiciled in Louisiana which employ less than 100 employees and have been impacted by COVID-19. The following businesses or non-profits have been deemed not eligible for the program: churches, religious and non-profit organizations, real estate developers, pawn shops, pay-day loans, lending and investment concerns, and speculative activities.
- Where: LED has outlined participating lending institutions by region and those lending institutions can be found on the LED website.
- When: Applications will be accepted by lending institutions until April 30, 2020.
- Interest: Fixed rate up to 3.5%, depending on the lending institution. Interest does not accrue for the first six months.
- Loan Amounts: Each loan is limited to $100,000, and such an amount will be tied to pre-COVID-19 employment and functionality of the business expenses. Therefore, each lending institution will evaluate specific applicants’ needs.
- Loan Terms: The term will be at least one year, but could be longer depending on business functionality during the crisis. The loan term cannot exceed five years.
- Program Fees: There are no fees associated with this program.
- Loan Processing Time: The processing time of the loan is contingent upon the loan amount, but is expected to be an expedited process.
- Payment Deferral: No payments are due for the first six months of the loan.
- Use of Funds: Loan proceeds can be used for payroll costs and other business expenses that could have been paid had the disaster not occurred (e.g., supplies, materials, utilities, rents, etc.).
The participating lending institutions will provide further detail of a streamlined application.
The program calls for required periodic reporting, including, but not limited to, compliance with the borrower’s obligations. Before making the loan, each small business should check with their lender to determine appropriate compliance procedures.
Help Is Available
While the COVID-19 crisis has brought unprecedented challenges, P&N’s dedicated professionals are committed to understanding and applying the available information to help our clients. Please contact us or connect with your P&N advisor to discuss your organization’s questions, concerns, and priorities.