The do's and don'ts of using your PPP loan funds

Do This, Not That

It's important to keep it all straight. Photo by Blake Callahan/Getty

Now that you've taken the first steps toward getting your Paycheck Protection Program loan funds, Texas Citizens Bank is here to help you stay on track by sharing important do's and don'ts about how to use them.

The staff of Texas Citizens Bank, you might recall, worked overtime in April to process $97 million in PPP loans, helping nearly 500 small Houston businesses avoid layoffs or closing their doors completely.

So you would be wise to heed their advice — even the Houston SBA District Office is using these PPP guidelines to help small businesses make the most of their loans.

DO: Use the funds for payroll and authorized expenses only
Your PPP loan is to be used for payroll costs, group healthcare expenses, and other authorized costs, such as your business mortgage expenses or rent, utilities, and interest payments on other debt.

DON'T: Use the funds for other things
Make sure you use your loan only to pay for authorized expenses. You should expect to be audited by the bank or government officials. By avoiding misuse of the funds, your loan may be fully forgivable.

DO: Be organized
Keep records of how you use your loan funds. Opening and using a separate deposit account for the PPP loan funds can make this easy and streamline any auditing process. Contact a TCB banker to find out more about business deposit accounts.

DON'T: Mix loan funds with personal assets
Again, to keep things easy to track, avoid depositing your PPP loan funds into a personal account and avoid the temptation of using the funds to pay for personal expenses.

DO: Keep the rules in mind
Remember that your PPP funds need to be used immediately for authorized costs incurred during the eight weeks immediately following the loan's origination. Also, at least 75 percent of the forgiven amounts must be used for payroll expenses during that time.

DON'T: Attempt to cheat
Unscrupulous borrowers may try to take advantage of the law's gray areas, but please don't. Again, the bank or representative from the government is likely to perform an audit. The last thing you want is to be caught in an act of fraudulent use of funds.

If you would like to download these PPP loan fund do's and don'ts as a PDF checklist, you can do so here.

Teamwork and dedication equal success. Photo by Katleho Seisa/Getty

Houston-focused bank comes through with record number of vital PPP loans

PPP MVP

At the beginning of April, small businesses were allowed to begin applying for Paycheck Protection Program loans, a historic solution designed to help cover payroll, benefits, mortgage payments, and utilities.

It was a mad dash as many raced to figure out the new program, which only had an initial $349 billion allocated to the SBA for PPP loans. Every minute working on these PPP loans mattered to the Houston small business owners who applied.

Working through evenings and weekends, the staff at Texas Citizens Bank processed a staggering amount of loans in the first round, and an impressive amount of additional funds in round two.

In the impossibly small, 13-day window before round one closed, TCB processed and funded $73 million, helping 297 Houston small businesses maintain payroll and avoid layoffs. For round two, it processed $24 million, or 182 PPP loans.

"They were real heroes for many businesses," says David Gow, CEO of Gow Media (the parent company of InnovationMap). "Their team was working 'round the clock with businesses like ours to give us the best possible shot at PPP funding. I think they were one of the top banks in taking care of their clients during a very stressful window of time."

"With the help of Texas Citizens Bank and the PPP loan, we were able to get our entire team back up to their full pay the same week as funding," says Christy Lovoi of South Shore Oral and Maxillofacial Surgery, who notes that the practice was having difficulty with its previous bank and switched to TCB. "While it will take some time to get back to pre-pandemic levels, the PPP loan will definitely make it much easier. The response and help from everyone at Texas Citizens Bank has been absolutely stellar."

"A large number of employees are reporting to work today and receiving a paycheck because of your outstanding efforts," added Brent Cox, vice president of member relations at the Texas Bankers Association, on LinkedIn.

TCB chairman and CEO Duncan Stewart says that the Houston community bank team arrived early, hired additional SBA experts to assist in the processing, and worked evenings and weekends to approve and process PPP loans, all in support of their local business owners and employees.

"I could not be more proud of our team and what they have accomplished in the last two weeks," says Duncan. "Their dedication and sacrifice were commendable — what they did truly mattered. This is a historic time. Many years from now, they can look back with great pride in the part they played over these weeks to save companies and the livelihoods of their employees."

"A huge thank you to Texas Citizens Bank for their amazing work on behalf of Trinity," wrote Bryan Kreitz, president of business development at Trinity (TLD), on LinkedIn. "I will no longer make jokes about 'banker's hours,' as they were responding to emails at all hours of the day and night."

---

Visit here for more information on PPP loans. Wondering about finances during the pandemic? This article outlines several options.

You and your money have options right now. Getty Images

Your money resources during COVID-19 and beyond: explained.

Now may be a time of uncertainty, but you shouldn't have to also worry about the availability and security of your money. Texas Citizens Bank is always available to answer questions — COVID-19-related and otherwise — and has laid out some options for those wondering what sort of financial resources are available.

SBA loan
Cash flow is a business' life blood. The Small Business Administration is working with local banks to offer helpful business resources during this challenging time.

The Paycheck Protection Program provides small businesses — including independent contractors and the self-employed — with the funds to pay up to eight weeks of payroll costs, including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.

Those interested in applying for a Paycheck Protection Program loan through the SBA are encouraged to apply through their current financial institution as that will likely be the quickest route to receiving funding.

Loan payments will also be deferred for six months. No collateral or personal guarantees are required, and neither the government nor lenders will charge small businesses any fees. For more information about PPP, head here.

The SBA also offers low-interest disaster recovery loans to help businesses and homeowners recover from declared disasters. They can be used for both physical damage repairs and economic injury, the latter up to $2 million in assistance for businesses and nonprofits to help overcome their temporary loss of revenue.

Accounts receivable purchase solution
Accounts receivable purchase solution provides cash upfront for your invoices. TCB will check your customer's creditworthiness and, once approved, the bank will purchase one or more accounts receivable from that customer. You get the majority (usually 80 percent) of your AR amount upfront and accrue daily fee (for example, if you get paid the next day, you're only charged for one day). Once your customer pays the AR, TCB pays you the remaining balance, minus a small fee.

TCB's AR purchase solution ranges from $10,000-$1 million and doesn't have a long-term contract, allowing you the flexibility to pick and choose which invoices you'd like to sell to the bank. Find out more about how Accounts Receivable Purchase Solution works here.

How to bank from home
Most banks offer online banking and mobile apps with the following features:

  • Mobile check deposit — deposit checks simply by taking a photo of them using your mobile banking app
  • Online bill pay — pay your internet, electricity, gas, and other recurring bills online or through the app
  • Account summary — check your account balance and view your recent transactions
  • Some apps, like the Texas Citizens Bank app, offer additional services like budgeting, spending alerts, and peer-to-peer payment services, so you can quickly and securely monitor your spending and pay a friend or family member

Lastly, be on the lookout for financial scams. Fraudsters and scam artists tend to take advantage of uncertain times like these. Email, text, and phone scams are rampant, so please be careful to check that all communication you receive is truly from your bank. If you are unsure of a communication's validity, don't respond or giveaway any personal information. Always contact your bank directly to check.

Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

Houston nonprofits can receive free tech help from big bank's batch of experts

Tech Support

Though it's been around since 2012, JPMorgan Chase's Force for Good program feels especially vital right now. The project connects Chase employee volunteers with hundreds of nonprofits around the world to build sustainable tech solutions that help advance their missions.

Even better, Houston and Dallas nonprofits have a leg up in the selection process. Organizations located in or near one of Chase's tech centers get priority, and that includes H-Town and Big D.

The government-registered nonprofits, foundations, and social enterprises (we're talking everything from food banks to theater companies) selected to participate will have access to a team of up to 10 highly skilled technologists, who will spend approximately four hours per week advising over an eight month period.

Each nonprofit is asked to propose the specific project that would benefit from technology guidance, and it needs to be something the organization can maintain when the project period is over.

"We have more than 50,000 technologists at JPMorgan Chase around the world and they're passionate about giving back," says Ed Boden, global lead of Technology for Social Good programs. "Force for Good gives our employees the opportunity to utilize their unique skills while also learning new ones, to build technology solutions for the organizations that need it most."

If you're the director, CEO, or other person in charge at a nonprofit and you still have questions about Force for Good, Chase has put together a free webinar to help explain further.

These webinars cover the overall program experience and application process, and it's highly recommended that nonprofits watch before applying. The live webinar dates (with Texas times) are June 2 from 1:30-2:30 pm and June 8 from 10:30-11:30 am.

A pre-recorded webinar will also be available for nonprofits to review after the live webinar dates.

Since 2012, Force for Good has worked with over 320 organizations in 22 cities, contributing over 190,500 hours of knowledge and skills.

"It is a great program that can provide strong impact for nonprofit organizations that need technology help," says Chris Rapp, a Dallas-based Chase executive. "As a father and husband of two Dallas artists, I am a huge believer in helping the arts grow and hopefully we can help do this through Force For Good."

The application process opened on May 28, with a deadline to submit by July 10.

2 corporations write checks to go toward Houston hospital's COVID-19 efforts

money moves

Two Houston companies have doled out cash to a Houston hospital's efforts in driving innovation during the pandemic as well as moving forward in a post-COVID-19 world.

Houston Methodist received $500,000 from Houston-based Aramco Americas and $130,000 from Houston-based Reliant. Aramco's gift will go toward funding ongoing research on convalescent plasma therapy as a treatment for COVID-19 and Reliant's donation will create the Reliant Innovation Fund.

"The challenges that we have and will continue to face with the COVID-19 pandemic amplifies the need for fresh ideas to combat this disease and treat those who have been affected," says Dr. Faisal Masud, medical director of the Center for Critical Care at Houston Methodist Hospital, in a news release from Reliant. "Innovating is at the core of what we do at Houston Methodist, and this generous gift from Reliant will make a difference for patients both now and for years to come."

According to the release, $100,000 will go toward supporting students in the Texas A&M University's Engineering Medicine program, which combines engineering and medical courses to allow for students to receive a master's in engineering and a medical degree in four years. Currently, A&M is renovating a building in the Texas Medical Center that will be the future home of the program.

"The EnMed program is educating a new type of physician — one with an engineering background and a forward-thinking, innovative medical mindset. Reliant's partnership and donation will allow our students to innovate for the dynamic needs on today's clinical front lines," says Dr. Timothy Boone, director of the Houston Methodist Education Institute and Associate Texas A&M Dean, in the release.

The other $30,000 of Reliant's gift will go towards expanding the hospital's patient-centric mobile app, CareSense, which Houston Methodist has used to connect with COVID-19 patients after they have left the hospital.

Aramco's donation will be used to support Houston Methodist's plasma research on COVID-19 treatment. The hospital was the first academic medical center in the United States to get FDA approval for this type of treatment on COVID-19 patients.

"Convalescent plasma therapy has been effective in other infectious diseases and our physician-scientists are working to develop it into a first-line treatment for COVID-19," says Dr. Dirk Sostman, president at the Houston Methodist Academic Institute, in a news release from Aramco.

The treatment collects blood from recovered COVID-19 patients and infuses the plasma into currently ill COVID-19 patients in hopes that the recovered patient's plasma can provide the antibodies for the ill patient to fight off the disease.

"Houston Methodist Hospital is a world-leader in healthcare as well as research and development," says Mohammad S. Alshammari, president and CEO of Aramco Americas in the release. "Our donation is an opportunity to support the innovative work occurring there in support of the Houston community and to contribute to long-term medical solutions for this global health crisis."