Spot's US Companies Apply for Stimulus Package Loan
S
POT COFFEE (CANADA) LTD. (TSX-V: SPP) (Spot or the Company) wishes to report that its management has started the process of formal applications by its US operating companies for two specific loans offered by the US government's USD 2.2 Trillion Stimulus Package, which has been passed by the US Senate, House of Representatives and the White House.
One loan falls under the Small Business Administration (SBA) program identified as the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and the second loan is described under the SBA Economic Injury Disaster Loan (EIDL) program. Please click on the link below for the most relevant site for a better understanding of the general terms of the above-mentioned loans.
https//www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
Spot's US Financial Executive Committee met and reviewed with the US counsel and director, Mr. R. J. Stapell, the terms and conditions of the above-mentioned loans in order to determine the eligibility of Spot's US operating companies to apply for these loans and unanimously felt confident to proceed with their formal loan applications.
The amounts and main conditions of the two loans are as follows
SBA - CARES
This program provides fully guaranteed federal loans to small businesses to help them keep their employees working during the COVID-19 pandemic and economic downturn. As per the SBA - CARES provisions, the Company will be applying through its bank for its SBA - CARES loan.
The loan amount is calculated on the basis of the average total monthly payments by the Company for payroll costs incurred during the 1-year period before the date on which the loan is made multiplied by 2.5.
Subject to the final terms and conditions of the loan, if approved, the Company's understanding is that it can use the proceeds of the loan for
Payroll costs.
Costs of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums as well as employee salaries, commission, or similar compensations.
Payment of Rents and utilities.
Interest on any other debt obligation.
Furthermore, the loan given to the Company is
Eligible for forgiveness in an amount equal to the sum of the above-mentioned costs and payments.
Free from any personal or other guarantees and no fees are payable to SBA.
Able to exclude any amount which would normally be includible in gross income of the Company by reason of the debt forgiveness from gross income.
SBA- EIDL
Loans under this program are in fact working capital loans that
Can be in an amount of up to US $2 million depending on the eligibility of the qualifying company bearing interest rate of 3.75% per annum.
Are available for companies with businesses, like Spot, which are directly affected by the COVID-19 disaster.
Are used to pay fixed debts, payroll, accounts payable, and other invoices that could have been paid had the disaster not occurred.
Are not intended to replace lost sales or profits or for expansion.
Will not be declined by the SBA for lack of collateral but will require borrowers to pledge what is available.
Funds under this program come directly from the U.S. Treasury, therefore the Company needs to apply for this loan directly to SBA's Disaster Assistance Program and not through its bank.
Eligibility for these working capital loans is based on
The size (must be small business) and type of business as well as the financial resources of the company.
A credit history of the company acceptable to SBA.
An ability of the company's business to repay the loan.
Spot will also be applying through its bank for the Canada Emergency Business Account which provides the Company with a $40,000 line of credit at 0% interest and requiring no minimum monthly principal payments until December 31, 2022. The Canada Emergency Business Account has been specifically designed by the Canadian government to help small and medium-sized businesses with their most pressing needs during the COVID-19 crisis.
The Company joins all the small and medium-sized businesses in extending their many thanks to the governments of the USA and Canada for their efforts and support of the business community and its employees until such time this crisis passes and the economies recover.
Spot will be reporting on the results of its loan applications as soon as they are made available.
✔️ Spot's US Companies Apply for Stimulus Package Loan
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