Which loan are you referring to...the one that converts to a grant if you comply with the payroll guidelines or the regular EIDL SBA loan? I'm guessing the former?
Another free webinar on the bill... RSVP Now: National Small Business Town Hall Please join Inc. and the U.S. Chamber of Commerce for a complimentary virtual event Friday, March 27, from 12 to 1 PM EST RESERVE YOUR SPOT NOW The Senate passed a historic stimulus package on Wednesday night. The House of Representatives is expected to pass it this week. But at 880 pages and with $2 trillion at stake, what does this bill mean for your small business? What do you need to know to help your business thrive, reassure your employees, and give you some of the certainty needed to lead? Inc., in partnership with the U.S. Chamber of Commerce, is going to help answer those questions in a virtual National Small Business Town Hall tomorrow, Friday, March 27, at noon Eastern time. We’ll have Kimberly Weisul, Inc. editor-at-large, hosting a fireside chat with Neil Bradley, the executive vice president and chief policy officer at the U.S. Chamber of Commerce. They'll discuss exactly what this bill could mean to you, including: Where it provides opportunities; Where it creates headaches; and How you can use it to most effectively support your business. Space is limited and advance registration is required. Please RSVP by tomorrow morning to ensure your participation. RESERVE YOUR SPOT NOW
More advice I just got... Triage. Our medical personnel are making the tough decisions – so should we. Please take out a piece of paper and make a list of the top 25 relationships (OK, start with 5) critical to getting you through the next few months. Who could most use your core capabilities? Who could help you think through a pivot? Which customers and segments of the economy are surviving/thriving? Get talk time around these questions with your advisors/team. Also, triage you’re A/R and A/P – triage your product/service lines – triage your operations. Now is the time to focus on what’s going to work. And make a list of the customers/suppliers you most want to keep. How you handle yourself now – mainly communicating honestly with them – will impact your reputation later with these key relationships. Make the lists and work them!
After spending literally all day parsing through the provisions relating to tax and small businesses, I'd say there are 3 broad categories of things in the CARES Act. The first is intended to incentivize employers retaining and continuing to pay employees by providing loans largely based on payroll and mitigating the 6.5% employer side of payroll taxes. Note the payroll loan and payroll tax breaks are somewhat mutually exclusive. The second category has to do with deductibility of business losses, interest, and depreciation. This category temporarily repeals certain provisions of the TCJA and does so retroactively, so taxpayers with deductions limited in the past 2 years can access capital by amending their returns and filing for a refund. These refunds could be quite substantial for big businesses. The third category is basically an "other" category that, among other things, bails out airlines by temporarily waiving excise taxes, incentivizes hand sanitizer production, and permits individuals to access capital by lessening restrictions on funds in retirement accounts. It's an interesting approach IMO. The loans will basically be free money and available in the short term, but the others will take longer to see the benefits since they pretty much all have to be processed by the IRS. There are provisions facilitating that processing and providing "quick refunds," but it's still not immediate. The IRS only got $250m more in its budget to implement this, and given the individual rebate they also have to process it's questionable they'll be able to do it in a timely fashion. Haven't had a chance to follow the news today, but there's basically no question in my mind further legislation will be needed as this won't be quick enough.
I’m sorry if this has already been discussed. Small law firm. We are going to be cutting our staff’s hours back to where only one non-attorney staff member is in office at a time—answering phone, getting mail, paying bills, etc. How is the new bill’s unemployment provisions working with partial unemployment?
I haven't read as much about the unemployment aspects, but it doesn't seem like your staff will be "unemployed" under the act since your firm will still be open--they're just being told to reduce hours to offset costs. Not positive on that tho. That said, the "payroll protection program" is clearly intended to to prevent exactly the situation you are describing: firing employees or reducing their hours so the business can stay afloat. The loan aspect is basically free money, and the debt is forgiven tax free under certain conditions: you maintain employment levels, and do not reduce employee pay by too much. If you avoid doing those 2 things, then you are given money by the gov't and 2 months later you can apply to have the debt forgiven. Free money.
The webinar from today is up https://is-tracking-link-api-prod.appspot.com/api/v1/click/6714263041998848/4616241378230272 I too spent most of the day weeding through this.
Thanks guys, will look into that. I wasn’t really thinking about something to maintain our salaries too, but that would keep us from eating up all of our liquid capital over the next couple of months.
Here is a decent article explaining the basic issues among different business interruption coverages. https://www.insurancejournal.com/blogs/big-i-insights/2020/03/24/562253.htm The Chickasaw Tribe filed in Oklahoma yesterday over their casino revenue, the second test case after the Oceania lawsuit in New Orleans.
chickasaw and choctaw together apparently. that’s probably a huge lawsuit chickasaw nation owns winstar on the oklahoma/texas border. largest casino in the world
We have never seen an economic disruption like this one that is unconnected to physical damage to the property insured. New Orleans post Katrina coverage claims all had physical loss for the most part. The issue was whether it was excluded flood damage. NYC post 9/11 claims had physical loss in lower Manhattan, dust and debris or structural inspections that needed to be performed before business could be reopened.
It’s a massive transfer of wealth from the feds to the employees. Take it and run and keep your ahead above water rather than struggling to survive.
I haven't been up to date itt, but if you are business that supplies or sells any products that sell on Amazon, Home Depot, Wayfair, Lowes, Overstock, etc. then you should be good for an exemption. All of those websites are essential, so even if you have a small percent that sells online (ramp it up) you can be deemed essential since you supply them. You are a critical supplier to their supply chain and to the end residential consumer which is the guidelines are emphasizing.
Also, if you have any connection to a medical device or supplies ( dallasdawg ) I would use that to your benefit to the government and look at bringing in more product to distribute.
Great info guys. You can’t include salary over 100k in payroll calculation so I assume you get to include the salary up to 100k and remove the rest. Could really help navigate the next several months.
We were able to get an exemption because we made the case on multiple levels of what was outlined. In addition we have relationships that may open up new opportunities.
My management team and their lawyers promised me they are working 24/7 dissecting these bills. Hope they have good news when we meet Monday.
That's the plan now. How will all this work if we get put under a shelter-in-place order? Can I continue to pay my employees (hourly rate folks) or will they then just have to do unemployment if they aren't actually working?
Heres my issue now. I got a bunch of new employees since I moved 3 hours. So now the one sees she got paid for taking her time off when she felt sick last week. Now she text me this morning her stomach hurts. Also shes awful at what she does and I can't fire her because of the situation right now.
We have four employees who are underperforming. What we decided is we are going to give them a performance improvement plan right now that spans the 8 weeks of the govt stimulus package. At that time we will decide their future. This way you maximize the benefit for them on the govts dime and if somehow they get the message and change and you choose to keep them it is a win/win. If not it is still a win/win because they get an extra two months of compensation and then go on full unemployment.
Sent the link to this thread to my dad and brother. They own/run a home automation/home security company in north Bama. It took them years to finally start operating in the black so I'm really praying that they are able to navigate through this. Appreciate all the information being shared, especially you NYGator
Have you been able to find any clarification on this? I hope you're correct, but I'd love to find a cite
NYGator do you know how this will work? I'm digging through the text of the bill now, and haven't seen anything that clearly answers it. Guess I could have them "work from home" even though there's not a ton that they can do.
One thing I'm a little confused on and trying to find some clarification, I know the payroll portion of the ppp(?) to be forgiven is only for 8 weeks, however, rent, utilities, interest, and 'transportation' - is that only for an 8 week period or for the entire 4.5 months (2/15-6/30 time frame). Also, what is included in 'transportation'
no, still looking. Just logically it would be weird to totally exclude the employee(s) rather than cap at 100k.
They don't know yet. I spoke to my banker yesterday, and he said that he expects it to be 3 or 4 weeks before the SBA defines the actual process to file for this, BUT it will be done through an authorized SBA bank. You won't get an answer yet, because there isn't one. In addition, it appears that the SBA/Govt. is relying a lot on the banks. I would not be surprised if it is a shit show. Too much to learn in too soon a time, so in order for it to work it will have to be super simple. I could see it being something like... 1. Bring a copy of last years financials 2. calculate 250% of the equivalent of one months income from proof of payroll from some range. 3. how much do you want of that 4. sign these loan papers 5. get access tot he money from the bank The thing that concerns me is the SBA is only guaranteeing 75% or 85% of the loan that doesn't get forgiven (the 10 year term portion) to the bank depending upon amount after 2020, which means the bank has to assume the risk. I am not sure how the govt and the banks square that circle of risk requirements based on the very simple approval terms that they laid out so far.
I assumed it was 8 weeks, but good point. I don't know. I haven't seen the transportation portion mentioned or did not notice it.
This is correct. Basically if I only had 3 employees and one made $150, 1 made 75K, and the other made $110K then the forgiven portion would be the equivalent of... 100K+75K+100K divided by 52 and multiplied times 8 + Utilities + Rent
So working off this chart I assume no one is getting the max but I could in theory get up to a whole year of expenses covered?
That 60 day approval is new and goes against what Mnuchin said (1day). Also how do you figure it can cover you for a year if the money has to go to payroll? If you cut the max, maybe you can squeeze it out to 4 months and that is probably a stretch.
Btw, when I said 4 month I was only referring to the max grant, not total loan. Total loan can cover more.
Man this funding fucks smaller cpg companies that aren't heavy labor intensive(often use 3pl for logistics) but require a lot of capital for inventory. How are they suppose to keep suppliers paid on time with the drop off in sales?
Mnuchin said immediately. How he takes that idea and puts into practice seems like a huge task and that document above says 60 day approval, but that seems ridiculous.
Not sure if this has been posted yet, but this seems like a pretty damn good bailout plan. https://eig.org/news/main-street-rescue-and-resiliency-program
Latest update from a source I keep citing... Forming, storming, norming – the natural sequence of teaming. Last week felt like “forming” a new way to work; this week was “storming” with lots of quick moves, good and bad; and next week feels like we’re ready to “norm” – a new norm, but a norm. Thus, the #1 next move – function and fun. Please take a few moments this weekend to give yourself permission to have fun. Then Monday, its back to work – the “function” which gives us meaning. This is from Doug Harrison who scaled his firm to a billion and is now working with a firm that has a device that completely kills the virus (being used in White House) – they want 10,000 units ASAP! Doug regularly checks in with the 7Fs – Faith, Family, Friends, Fitness, Finances, Function, and Fun – and when he’s not 100%, he sees which one needs attention – it’s your checklist for thriving. And if you have time to read only one thing this weekend, pick up Jim Collins’ book Great by Choice – it was his last book and the one I think is best for scaleups. Jim’s chapter on the “20-Mile March” detailing Shackleton getting his entire team off the ice when the competing team died is THE case study of leadership for these times.