POSTED : DECEMBER 18, 2020
The holiday season is here, and U.S. Congress has until midnight, December 18th, 2020 to hammer out a deal to garner additional economic aid for struggling small businesses. As death tolls from COVID-19 near 300,000, citizens are anxious over their physical health and their road to economic recovery. But whether D.C. arrives at consensus on the 18th or via stop-gap measures in the weeks ahead, here’s how Loan Mantra can help you prepare for another potential wave of PPP funding and a brighter 2021.

Will your holidays include debt relief? Will your holidays include debt relief?…

Here are responses to the most common questions Loan Mantra is hearing about the next round of PPP funding:

Am I eligible to participate in the next round of PPP loans?
The specifics about the final stimulus bill and the application are to be determined. What we do know is LoanMantra is committed to providing PPP lending for its clients and will continue to guide you through next steps.

Once a stimulus bill is finalized and issued to SBA for guidance and oversight, Loan Mantra will communicate how to best submit a PPP application. Like the first round of PPP funding, our clients will likely be able to easily and seamlessly apply using our app and portal. (As a note: The SBA has indicated the second wave application will likely look similar to the first).

When and where can I submit my PPP application?

As there is still not an approved stimulus bill, no guidance has been given for where and when to submit an application. We will alert you as soon as the process begins and the best way to go about applying for PPP funding. Again, Loan Mantra is committed to making this as simple as possible like we did with the first wave of loans.

What should I expect from the PPP application this time around?

Loan Mantra is doing everything in its power to help borrowers during this uncertain time. We had a 100% success rate with our borrowers during the first round of PPP funding and believe offering you a calm, competent process is important to economic recovery. Prepare for the days ahead by ensuring your business profile is up-to-date on the Loan Mantra portal. Submit any outstanding, quarterly financials and, should you have any questions, you will receive a timely response from our team within 24-48 hours. Prepare today, so once the PPP application is made available, you will be ready to submit your materials and receive immediate relief.

What happens next: The next few days and weeks are critical. We recognize you may have questions regarding debt relief. Rest assured we will continue to guide you through the storm and offer you information as we have it. Loan Mantra is staying apprised of everything that is happening in D.C. and preparing to serve you in a potential second wave of PPP funding. Our goal is to keep you doing what you do best: serving your communities.

POSTED : JUNE 29, 2020

Most borrowers and lenders are familiar with The 5 ‘C’s of Credit. These are basic guidelines that lenders use to evaluate loan prospects or grade credit investments. Historically the fifth ‘C’ (or “conditions”) has been the most ambiguous category of all, serving as a catch-all designation for lenders who seek to quantify any superseding factors of how a business will perform at market. But now, in the COVID-19 era, the fifth ‘C’ has never been more more crucial or more concrete. In fact, it’s worth questioning whether “conditions” and “Covid-19” are one-and-the-same?

Most borrowers and lenders are familiar with The 5 ‘C’s of Credit. These are basic guidelines that lenders use to evaluate loan prospects or grade credit investments. Historically the fifth ‘C’ (or “conditions”) has been the most ambiguous category of all, serving as a catch-all designation for lenders who seek to quantify any superseding factors of how a business will perform at market. But now, in the COVID-19 era, the fifth ‘C’ has never been more more crucial or more concrete. In fact, it’s worth questioning whether “conditions” and “Covid-19” are one-and-the-same?

While The 5 ‘C’s of Credit are basic guidelines all lenders use to evaluate loan prospects, determine creditworthiness and grade credit investments; the weightiness given to each category may differ based on individual lender, institution or bank. Regardless, business owners who understand the 5 ‘C’s put themselves in a superior position to obtain approvals.

Traditionally, the 5 ‘C’s’ are:

• Character: Are you, the business owner, honest and upfront in your interactions with the lender? What financial narrative is reflected in your credit history?
• Capacity: Do you have the ability to repay the loan? What is your debt-to-income ratio?  Do you meet the required debt service coverage ratios of your lender or program?
• Collateral: What assets do you possess that can be used to back or securitize the loan?
• Capital: This is colloquially referred to as having “skin in the game,” meaning lenders want to know how financially and personally invested you are in your business. In other words, what of your personal equity is invested in your business?
• Conditions: What conditions affect your long-term success as a business? What economic, industry or environmental factors affect your  projections? What relationships with vendors or industry partners provide you competitive advantage? What gaps do you need to fill?

Again, the 5th category has generally been an ambiguous one. But not anymore. Now the 5^th ‘C’ is crucial to determining your future successes as a business owner. And, it’s all the more helpful in determining your strategic direction when you consider “conditions” and “Covid-19” as one-and-the-same.

As of early March 2020, one-third of all jobs in the United States became “vulnerable.” Small business employees, in particular, became most endangered, with approximately 30 million individuals and 54 percent of employees at risk for losing jobs as industries continue to shutter or evolve. While small businesses have long been the lifeblood of the U.S. economy and a proving ground for entrepreneurs, even the most innovative of owners have generally held only a 27-day cash shield (or “rainy day” buffer) before the pandemic began.

So how will the COVID-19 crisis change the way business owners operate in the future?

For the foreseeable future, lenders and investors will consider just how well a business navigated 2020. COVID-19 was not a test anyone asked for, but it’s one all business owners and their employees received. In this case, “conditions” or the 5th ‘C,’ shape all other credit criteria. Here are a few ideas for handling the 5^th ‘C’ well:

• Grow the tree: You may have heard the age-old adage that the best time to grow a tree is twenty years ago. For business owners grappling with new and steep financial implications as a result of the pandemic, this is apt counsel. Lenders and investors will no longer classify the 5^th ‘C’ by nebulous industry conditions, but by how well you’re navigating current conditions. Record your reality as much as possible and study the pandemic’s effects on your market. By accounting and analyzing how your business is operating in the day-to-day, you will solve for growth opportunities in your future.
• Protect your people: Are you caring for your employees? Are you considering their financial health and physical safety, using programs or grants at your disposal? Your loyalty to your people’s wellness now determines their loyalty to you in the future. It also indicates positively about your character and your personal investment to build a quality brand.
• Forecast, forecast, forecast: Taking meticulous financial accounts during your financial valleys will provide you invaluable data points. Use this information strategically to determine where your business can evolve or pivot in the future.  Determining core and brand values during lean times will keep your business aligned during growth.
• Pivot: What opportunities should you seize or abandon based on current conditions?
• Remote culture: Are your employees plugged in to your short-term plans? Your long-term vision? Are you helping your team collaborate well through remote means and innovative thinking?
• History repeats itself: While countless healthcare workers and epidemiologists are working around-the-clock to contain the pandemic and normalize everyday life for U.S. citizens and their economy, are you preparing your business for all possible contingencies? Future waves of the coronavirus?
• Tell your story: Every business has a story. What will yours be? How well you are navigating the 5^th ‘C’ of Covid says everything about you as both a brand and an investment. How well you navigate the impacts of COVID-19, and communicate the experience, determines whether your market audience wants to stay with you during and after the pandemic.

At Loan Mantra, we help businesses prepare today for their financial success tomorrow. Let us help you grow your tree, tell your story and prepare for additional loan requests and funding now!

POSTED : SEPTEMBER 29, 2020
September is drawing to a close, and emergency relief payments are drawing to a close. What does this mean for small business owners? (more…)

On the whole, the bill intends to prolong financial relief for small businesses through February 2021; and meet the financial burdens of the sectors hardest hit by the pandemic. What does the Small Business Debt Relief Extension Act intend to do:

• Extend debt relief payments for all small business with an SBA-backed loan—including 7(a), 504, and microloans—for five months, or until February 2021.
• Offer an additional seven months of debt relief for highly vulnerable businesses, and specifically those operating in sectors hardest hit by the pandemic. These sectors include: arts, entertainment, and recreation; accommodation and food services; educational services and charter buses.
• Continue debt relief availability on new SBA loans for a full year, including those approved through September 2021.
• Ensure debt relief benefit holds no tax liability for the participating business.
• The bill also seeks to improve “program integrity and transparency” for PPP and EIDL borrowers. It requires no new spending by Congress, as any new spending would draw upon funds already appropriated under the CARES Act. Read more here.

Why does this matter to you? If you are in need of extended payment relief, Loan Mantra™ urges you to familiarize yourself with the terms of the current program and the proposed terms of the Debt Relief Extension Act. Nothing has been voted on yet. But your voice—whether as borrower or lender—has never been more critical to shape legislation for the small business community. Here are some things you can do: Continue to exercise patience as the program shifts to meet the needs of borrowers. Senator Amy Klobuchar says, “Small businesses continue to face incredible stress and we must do everything we can to help them weather the economic turmoil caused by the coronavirus pandemic.” She, along with many others, are advocates for the industry in a time of urgency and need. And just as importantly, get in touch with your elected representatives regarding issues related to your small business. Make sure they know your story and are representing your best interests. In a year that has proven why flexibility is everything, make sure you’re primed for smart financing. Let Loan Mantra™ help you prepare for future financing by getting your profile up-to-date on BLUE.

What happens next:

In the months since the PPP was originally passed as part of the $2 Trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, U.S. industry leaders, financial institutions, advocacy groups, chambers of commerce, and business owners have recognized the need for greater program flexibility. So what does that mean for loan forgiveness?
Amendments approved by the U.S. House last week, passed unanimously by the Senate on Wednesday, and signed into law by President Trump on Friday, June 5th, illustrate growing awareness about how the pandemic is affecting regions, communities, markets and business owners in diverse ways. The Program, and its earlier terms for loan forgiveness, have been criticized for attempting to solve emergency assistance through a one-size-fits-all model. New amendments in the The Paycheck Protection Program Flexibility Act of 2020 (H.R. 7010) provide greater flexibility for borrowers. And “though the bill doesn’t provide for every contingency, it’s a significant step forward,” says Raj Tulshan, Managing Director of Hudson Capital Advisors, LLC and founder of Loan Mantra.

A joint statement issued by SBA Administrator Jovita Carranza and U.S. Treasury Secretary Steven T. Mnuchin shares their resolve for “more time and more flexibility [for businesses] to keep their employees on the payroll” and for “getting the American people back to work as quickly as possible.” The new bill also confirms June 30, 2020, as the last day a PPP loan application can be approved.

Though there will likely be ongoing resolutions (known as Interim Final Rules) and updates to the loan forgiveness application in upcoming weeks ahead, Loan Mantra is here to guide you through the most current information about PPP loan forgiveness. Our synopsis is intended to break the information down simply, but shouldn’t substitute for a thorough reading of the bill.

Loan forgiveness today:

The following changes were proposed to the Paycheck Protection Program Flexibility Act of 2020 (H.R. 7010) in regards to loan forgiveness:

• Extension of Loan Use: The extension of the borrower’s spending period increased from 8 weeks to 24 weeks. Borrowers may now use loan proceeds for up to 24 weeks after they receive loan disbursal.
• Payroll Flexibility: The bill provides for additional loan flexibility, specifically as it relates to the 75%-25% breakdown of payroll to non-payroll expenses. The new proposed breakdown is 60%-40% of payroll to non-payroll, with the minority margin being allotted for uses such as rent, mortgage, utilities, and other acceptations.
• Repayment Terms: The repayment period for unforgivable loan debt has been lengthened from 2 years to 5 years. (Any pre-existing loans may amend their notes to reflect new maturity terms).
• Safe Harbor: The bill expands safe harbor terms for borrowers rehiring employees by allowing loan forgiveness to not be affected by a reduction in employees if the borrower is able to document an inability to rehire individuals; to rehire similarly qualified employees; or to return to the same level of business activity they were operating at before February 15, 2020. This is particularly important news for business owners and employees who found themselves at odds with the intended purpose of the PPP loans through federal unemployment increases. With a rise of unemployment coverage to $600 per week, some employees are making more on federal assistance than while employed. Employers have found it challenging to rehire their employees through the Paycheck Protection Program when employees could take a financial loss.
• Deferral Period: An extension of the deferral period has been extended from 6 months to 10 months after the end of the borrower’s 24-week loan use (or “spend”) period. This means borrowers will not be required to begin making payments on PPP loans prior to determining their loan forgiveness. The goal is for borrowers not to pay on a loan that may be fully or partially forgiven by the U.S. Small Business Administration.

Forgiveness still to be determined:

• The bill does not currently include a de minimis threshold for forgiveness. This would allow for simplified or automatic forgiveness for loans under a certain size. So, ultimately a $10,000 loan will not be put through the same, potentially onerous forgiveness process as a $10 million loan. Lender advocates are currently lobbying for a threshold to be included in the loan forgiveness terms.

A Loan Mantra for the future:

As with any prior economic recovery in the U.S., the SBA will continue to play a major role in helping main street America access capital. As your business recovers from the COVID-19 pandemic and as you seek additional funding and recovery—including traditional SBA loans or bank financing—look to Loan Mantra. Our unparalleled financial know-how, nationwide network of experts, and best-in-class technology, BLUE™, will ensure you brighter days ahead.

Connect today to plan for your financial success tomorrow!

POSTED : AUGUST 18, 2020 What does it mean to be “powered by BLUE™?” For years, this question has driven the Loan Mantra ethos. Though an acronym for “Business Lender Underwriting Environment,” the BLUE™ platform is far more than pith. It’s an ecosystem. Designed with the small business borrower in mind, the platform takes historically confusing and opaque financial services and digitizes them. The result? BLUE™ seamlessly connects borrowers with best-in-class lenders and capital.

Being “powered by BLUE™” also means users have access to important tools and education for financial success and you don’t have to be a tech wizard to achieve success. A first-time user can simply log in to Loan Mantra and input their basic profile via six prompts: Loan Amount; Business Profile; Business History; Personal History and Personal Financial Statements. If you’re the applicant, you need to input your data only once. Your information will auto-populate throughout the application and, most importantly, your information remains secure for future usage. This digital efficiency and security is why Loan Mantra can process your loan request in three days, while other venues usually require weeks (or in some cases, why some institutions are still waiting for your fax…). The BLUE™ platform also updates and organizes your financial documents. This is valuable for returning Loan Mantra borrowers seeking additional capital, a loan restructuring, or business advisory services—because information continues to be stored and available for six years. As a user, BLUE™ will keep your financial documents private and your data securely organized from all prior lending transactions. This means your data is safe and ready when you need it next. The BLUE™ platform is also designed for flexible, daily use. Simply log in to Loan Mantra to request a complimentary credit report; or engage the loan calculator to determine terms and amortization schedules associated with any potential loans. One of BLUE’s most significant contributions to fin-tech is how it routes applicants through the application. Industry-related questions set the course of the loan application. And because each loan should be as individual as its applicant, BLUE™ technology allows for variances. Using a question-and-answer based system, BLUE™ routes applicants according to their various requests. Are you in need of SBA funding? Hoping to acquire capital to purchase a commercial property? A restaurant franchise? Maybe a gas station or a cell network? You respond to a simple drop-down menu regarding the nature of your loan; and, depending on your selections, BLUE™ will customize your application according to your intended use of capital. The same is true for every borrower. Decision-tree logic directions Loan Mantra clients to answer only the questions relevant to their loan or industry. While the platform is deceivingly simple to use, it delivers on its promise of being a digital “environment.” BLUE™ is next level lending, constructed for both borrower and advisor. After applying for a loan, you—the borrower—are assigned a specialized Loan Mantra advisor. Your advisor works directly in the platform—and directly alongside you—in real time. A collaborative platform generates optimal results. By giving you access to the process, BLUE™ technology is removing silos that plague other financial transactions. In other words, if you can see your loan process unfolding, you can advocate for yourself as it does. The result: an efficient process, and a quality application ready for third-party involvement—and particularly for funding. After you complete your application, your Loan Mantra advisor determines the appropriate institutional fit for your package. Even at this point, BLUE™ technology optimizes funding. The platform ensures your application meets every document request per bank or financial institution. And, because you decide whether to authorize third-party advisors to access your application digitally, the funding process can also be highly efficient. You spend less time dotting “i’s” and tracking down obsolete documents in dusty file cabinets; and spend more time building your business. An ecosystem is determined by the people who use it. BLUE™ is built by borrowers and advisors who know what it’s like to build a small business and have an overriding desire to buoy up the Main Street community. In fact, this platform is reinforced by its companion, CLUE (or “Commercial Loan Underwriting Environment”), which offers the same superior technology to alternative commercial lenders. Regardless of whether you’re a borrower, advisor or lender, being powered by BLUE™ is valuable. It means you’re part of a streamlined, dynamic environment with the right tools to build your business. Get powered by BLUE™ on Loan Mantra today!

POSTED : NOVEMBER 23, 2020
Like healthcare and essential workers, those in the SBA lending industry deserve our gratitude this Thanksgiving season. We, as small business lenders and advocates, have worked around the clock to administer PPP lending and forgiveness. This drive comes from our desire to see our communities, and the lifeblood of our economy, restored to some normalcy. Much remains to be accomplished but Loan Mantra is confident in the community partners with whom we will accomplish the tasks ahead. To our industry – colleagues, friends, partners and all those who have been in the trenches with us this year—we say thank you. How can you support the small business community this holiday season? Shop Local: There’s never been a more important time to shop local, whether holiday dinners or gifting. Small Business Saturday: Historically, the Saturday after Thanksgiving (11/28) is a way to show love to your favorite small businesses and help them recover from a challenging year.

—How we say thank you

• Shop Local: There’s never been a more important time to shop local, whether holiday dinners or gifting.
• Small Business Saturday: Historically, the Saturday after Thanksgiving (11/28) is a way to show love to your favorite small businesses and help them recover from a challenging year.