Hey Small Business Owners...What are you doing to ride the storm out?

[Trivers]

How are you handling HR issues?

Are you applying for SBA loans?
There are several types of loans. And new info is appearing daily.

Capital up to $10MM.
Up to 30 years to repay. Some actually are forgivable.
3.75 to 4%

https://disasterloan.sba.gov/ela/

https://www.inc.com/kevin-j-ryan/sma...incthismorning



My world: Everyone at the software companies are working remotely. The chocolate factory shut down yesterday due to not be considered an essential business. The chocolate elve had already left due to health concerns. I handle all the commercial rentals myself so no impact:

I don't intend to lay-off anybody...if this stretches into June or July...then we may look at cutting salaries by 25 to 50%. With the $1,200 everyone is getting already from the gov, and the 4 month unemployment (+$600/week additional), if we have to do layoffs, then the Team will not be totally without funds.

What are you doing to ride the storm out?

[Dallas Chief]

Originally Posted by Trivers

PPP Calculator

Awesome!

Still confused on the rent/lease/interest debt portion. Where do we input that into the loan calculation?

[mililo4cpa]

Originally Posted by Dallas Chief

Awesome!

Still confused on the rent/lease/interest debt portion. Where do we input that into the loan calculation?

Those do not get put into the loan calculation amount. However, those are valid uses of the PPP funds, and will be used to help calculate the loan forgiveness....

[Dallas Chief]

Originally Posted by mililo4cpa

Those do not get put into the loan calculation amount. However, those are valid uses of the PPP funds, and will be used to help calculate the loan forgiveness....

Thanks. I was afraid that was the case. Doesn't make a whole lot of sense. Asking for a loan based solely on payroll expenses. But it can be used and forgiven for things like rent. But we aren't supposed to lay off employees that the loan was based on keeping. So how does it cover something like rent if it is to be used for payroll? 'Merica

[Mr. Plow]

Originally Posted by Dallas Chief

Thanks. I was afraid that was the case. Doesn't make a whole lot of sense. Asking for a loan based solely on payroll expenses. But it can be used and forgiven for things like rent. But we aren't supposed to lay off employees that the loan was based on keeping. So how does it cover something like rent if it is to be used for payroll? 'Merica

That's why they are letting you ask for 2 1/2 times your monthly payroll. The 2 is for your payroll, the 1/2 is for your utilities/rent/etc.

[Buehler445]

FWIW I got my banker up pretty hard since I can apply tomorrow.

I asked him if I apply for the PPP through him if it kicks me out of an EIDL loan. My business a couple months payroll is pretty immaterial in terms of expenses. And depending on how this shakes out payroll might be the easiest check for me to cut. What he told me is you can still apply for the EIDL you just can’t use those expenses.

He also said their guidance is that they don’t need any “packagers” whatever that means and you should apply through the website.

Take that for what it’s worth. There is nothing saying my banker is any sort of right here but that’s what he told me.

I’ll probably take a look at the EIDL application first. If it looks more promising I may forego the PPP loan.

[mililo4cpa]

Originally Posted by Mr. Plow

That's why they are letting you ask for 2 1/2 times your monthly payroll. The 2 is for your payroll, the 1/2 is for your utilities/rent/etc.

This....keep in mind you're only covering 8 weeks of payroll, but funding 2.5 months of average payroll.

[mililo4cpa]

Originally Posted by Buehler445

FWIW I got my banker up pretty hard since I can apply tomorrow.

I asked him if I apply for the PPP through him if it kicks me out of an EIDL loan. My business a couple months payroll is pretty immaterial in terms of expenses. And depending on how this shakes out payroll might be the easiest check for me to cut. What he told me is you can still apply for the EIDL you just can’t use those expenses.

He also said their guidance is that they don’t need any “packagers” whatever that means and you should apply through the website.

Take that for what it’s worth. There is nothing saying my banker is any sort of right here but that’s what he told me.

I’ll probably take a look at the EIDL application first. If it looks more promising I may forego the PPP loan.

First and foremost: APPLY FOR ALL OF IT!

Second: As I understand it, as long as you don't use PPP and EIDL for same purpose, you still may qualify for both. for instance, if you use PPP for payrolls (as intended), you may be able to EIDL for other expenses. The banks I'm talking to are very vague on this, so don't take this verbatim

Third: You can roll EIDL into your PPP amount. So that alone doesn't eliminate you from PPP if you receive EIDL funds

Fourth: EIDL you apply directly through the SBA. There are diligence requirements, but not during the initial application. PPP, you apply through a participating bank, and the loan is backed by the SBA. The bank is responsible for the "underwriting", but basically other than validating payroll amounts and that the business was in existence, there really isn't any underwriting requirements.

Fifth: Even the banks don't have good answers on specific details. for instance: the SBA is backing the loan for one year, but terms are two years. So, banks are concerned that they are taking on risk without the benefit of underwriting....and they have no idea how to mitigate at this point. Of course, they are paid a processing fee from the SBA, so my best guess is the money they receive for processing is meant to mitigate any risk. I anticipate 75 - 80% of the loan value to be forgiven, which means there could be upwards of $70M in risk taken on!

So, don't forego the PPP, because you can re-fi the EIDL into it. But more to your point, you may get more benefit out of the EIDL than the PPP, although you won't get the loan forgiveness

[SAUTO]

I could be totally off but I think that 10k of an eidl loan will be forgiven also.

That could be more than the ppp for some

[mililo4cpa]

Originally Posted by SAUTO

I could be totally off but I think that 10k of an eidl loan will be forgiven also.

That could be more than the ppp for some

This is correct...the initial "Bridge" $10K....

Also, if you you convert the EIDL to PPP, and assuming you use the PPP as intended (for payroll), you also get loan forgiveness (up to additional 25%) for mortgage interest, utilities, and rent....I believe that would eat into the EIDL portion of the loan....

[Hog's Gone Fishin]

Sounds like there will be more SBA money available so I wouldn't sweat it running out.

Listening to Mununchin

[mililo4cpa]

Originally Posted by Hog's Gone Fishin

Sounds like there will be more SBA money available so I wouldn't sweat it running out.

Listening to Mununchin

Totally agreed....I look at it like this: There are 30 Million small businesses in the US. With $349B in funding, and assuming a loan of $350K per loan, that's 1 million loans that could be made.

I'm going to bet that the average loan will be more like $1M, so that's 349K loans that could be made....out of potential 30 million small businesses. Yeah, this is the start, not the finish....

[mililo4cpa]

So, just to vent a little bit. I mentioned before that my company set up a free hotline for CoronaVirus / COVID help. In reality, its me and my boss fielding all the calls all day long and into the evening. It's been call after call of people who have no clue as to what is happening or remedies available.

I appreciate all of you, because you seem like you are on top of things, even if you don't necessarily have or know all the answers. It's amazing how many people that are out there that don't even concern themselves with the basics....

[Buehler445]

Originally Posted by SAUTO

I could be totally off but I think that 10k of an eidl loan will be forgiven also.

That could be more than the ppp for some

Definitely is in my case. My whole payroll is less than corn herbicide by itself.

[BWillie]

Landlords...what are you telling your tenants?

Some I pay the utilities, others I do not. Nonetheless, one of my tenants is insinuating that he should not have to pay his rent. If he doesn't pay his rent, I still have to pay the house payment, the utilities, the cable, the heat, the taxes, insurance etc. Why would I continue to pay utilities if you don't even pay me rent?

He is also indicating some apartment complex waived their rent for 4-months. How would they even survive? I'm not some big conglomerate corporation.

Also, when is this Govt payment going to be direct deposited? Do we have a firm date?

[mililo4cpa]

Originally Posted by Buehler445

Definitely is in my case. My whole payroll is less than corn herbicide by itself.

But you still get loan forgiveness via the PPP, plus rent, utilities, and mortgage interest and can still roll the EIDL in.

So, hypothetically, if you cover payroll with your PPP, and still get the $10K forgiveness on the EIDL bridge, why wouldn't you do that?