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?

[mililo4cpa]

Originally Posted by O.city

Got everything done

Can’t get this on my new office because of the timing. Sucks

But the girls all figured out apparently they can make more being furloughed and on unemployment

that does suck....but you seemed to be very realistic about that possibility, so there is that....

And yeah, I'm actually against the UI amounts right now....what's going to happen when businesses start getting PPP, but the employees don't want to come back!

[Buehler445]

Originally Posted by O.city

Got everything done

Can’t get this on my new office because of the timing. Sucks

But the girls all figured out apparently they can make more being furloughed and on unemployment

That sucks ass man. And frankly the dudes that stepped out and did something are the guys that need it.

But I figured that’s what it would be.

[O.city]

Originally Posted by mililo4cpa

that does suck....but you seemed to be very realistic about that possibility, so there is that....

And yeah, I'm actually against the UI amounts right now....what's going to happen when businesses start getting PPP, but the employees don't want to come back!

Originally Posted by Buehler445

That sucks ass man. And frankly the dudes that stepped out and did something are the guys that need it.

But I figured that’s what it would be.

Yeah, it sucks. But it is waht it is. I'm actually gonna check with my associate that i bought it from and see if he would be willing to apply for it and i'll take all the risk. Basically i just want to be able to take care of the girls and such.

But in the end, I'll be fine. Just keep moving forward.

[O.city]

I think I'm gonna actually let them get unemployment for a month or so. We can determine when to use the PPP funds and it looks like we may not be back doing dentistry until June. So i may end up paying them May and June with the PPP funds so i don't have to waste my built up capitol.

[mililo4cpa]

Originally Posted by O.city

I think I'm gonna actually let them get unemployment for a month or so. We can determine when to use the PPP funds and it looks like we may not be back doing dentistry until June. So i may end up paying them May and June with the PPP funds so i don't have to waste my built up capitol.

Still wonder if EIDL is an option for your payroll with the new business....so many unanswered questions, and even the banks and SBA reps can't give me a straight answer.

I'll keep digging to see if there is a way to work around that, but fundamentally, it doesn't make sense....

the thought in the back of my mind is if the prior owner needs to apply, and you need some legal means to ensure that the funds go to your employees?

[O.city]

Originally Posted by mililo4cpa

Still wonder if EIDL is an option for your payroll with the new business....so many unanswered questions, and even the banks and SBA reps can't give me a straight answer.

I'll keep digging to see if there is a way to work around that, but fundamentally, it doesn't make sense....

the thought in the back of my mind is if the prior owner needs to apply, and you need some legal means to ensure that the funds go to your employees?

Yeah i don't know if it will work since he actually doesn't own the business anymore.

It seems like just a bad luck **** up.

[IA_Chiefs_fan]

Yesterday and this morning I donated a bunch of face masks that I imported to local nursing homes, hospitals, EMS etc. This afternoon the PPP was approved. Karma??
My small town bank seems to have been WAY more on top of it than most banks. This forgiveable loan is going to really help us through what's ahead. This is a huge weight off my shoulders. My crew is going to be okay financially.

[SAUTO]

My bank won’t even start trying to process the applications until Monday afternoon at the earliest. Assholes

[Papachief]

Originally Posted by IA_Chiefs_fan

Yesterday and this morning I donated a bunch of face masks that I imported to local nursing homes, hospitals, EMS etc. This afternoon the PPP was approved. Karma??
My small town bank seems to have been WAY more on top of it than most banks. This forgiveable loan is going to really help us through what's ahead. This is a huge weight off my shoulders. My crew is going to be okay financially.

Congratulations!! That’s awesome what you did for the hospitals!!

[mililo4cpa]

Originally Posted by IA_Chiefs_fan

Yesterday and this morning I donated a bunch of face masks that I imported to local nursing homes, hospitals, EMS etc. This afternoon the PPP was approved. Karma??
My small town bank seems to have been WAY more on top of it than most banks. This forgiveable loan is going to really help us through what's ahead. This is a huge weight off my shoulders. My crew is going to be okay financially.

That's fantastic news!

My day started with a consultant of mine trying to help a client go through Bank of America for their PPP, only to be told the following via email from BoA rep (names have been removed for confidentiality purposes):

"I hope this finds you well & staying healthy! As we approach the application process which is said to be going live tomorrow (Fri 4/3) at 8am EST, I learned today that BofA, based on the guidelines of the SBA & the Treasury Dept, has 4 criteria in order for BofA to grant application access…1) have existing credit/lending relationship at BofA / 2) have existing deposit acct at BofA / 3) have all KYC/due diligence documentation on file at BofA and 4) have digital online access established at BofA. That said, I confirmed that [Your Business] does not have a credit/lending relationship. Do you have credit/lending elsewhere with another financial institution?"

This is a bold faced lie, and we spent the remainder of the day blasting and battling BoA, who eventually came back in the afternoon and said that they would change the policy on Monday (to which my response was "why are you waiting until Monday....this is a first come / first serve and limited resource package....you are screwing thousands upon thousands of small businesses and their employees!)

But I digress: At least BoA was taking applications (last I heard 85,000 worth approx. $22B).....I don't believe PNC bank (my company's bank) took a single application.

My sense with the big banks is that they are going to get 80 - 85% of the applicants and perhaps even larger share of the actual value of the loans. The SBA is backing this, but not forever, so their hang-up is "what happens with the unforgiven loans once the SBA backs out on unforgiven portions?" Given that there is virtually no due diligence requirements, it's not like the banks can vet the applicants, so there is risk associated there for them, and they have to work those details out.

So, BoA's requirement of only taking applicants that are existing credit customers gives them opportunity to vet the applications and ultimately role unforgiven debt into existing lines of credit. My beef is that (a) they lied and said it was SBA and treasury guidelines and (b) the program is first come / first serve w/ any eligible applicant needing only to go to an SBA lender. Otherwise, it makes perfect sense that they are hedging their (unknown) risk.

So the smaller banks, who are very likely not only going to get significantly less PPP activity, but also smaller loan values, are willing to take that risk. Why? Well, a loan that is under $350K carries a 5% application fee the SBA is paying to them. the fee % decreases with higher loan values, but they stand to make a lot of profit on the processing of the loans, with little risk on the back end of unforgiven loans. For that reason, I think the small banks are just fine with taking the risk in exchange for processing the loans

[mililo4cpa]

Originally Posted by SAUTO

My bank won’t even start trying to process the applications until Monday afternoon at the earliest. Assholes

Big bank?

[SAUTO]

Originally Posted by mililo4cpa

Still wonder if EIDL is an option for your payroll with the new business....so many unanswered questions, and even the banks and SBA reps can't give me a straight answer.

I'll keep digging to see if there is a way to work around that, but fundamentally, it doesn't make sense....

the thought in the back of my mind is if the prior owner needs to apply, and you need some legal means to ensure that the funds go to your employees?

Couldn’t he have taken out an Eidl then rolled it into the ppp and then hire more “new” help and raise his payroll and still have gotten his ppp forgiven for the full amount?

[Papachief]

Originally Posted by mililo4cpa

That's fantastic news!

My day started with a consultant of mine trying to help a client go through Bank of America for their PPP, only to be told the following via email from BoA rep (names have been removed for confidentiality purposes):

"I hope this finds you well & staying healthy! As we approach the application process which is said to be going live tomorrow (Fri 4/3) at 8am EST, I learned today that BofA, based on the guidelines of the SBA & the Treasury Dept, has 4 criteria in order for BofA to grant application access…1) have existing credit/lending relationship at BofA / 2) have existing deposit acct at BofA / 3) have all KYC/due diligence documentation on file at BofA and 4) have digital online access established at BofA. That said, I confirmed that [Your Business] does not have a credit/lending relationship. Do you have credit/lending elsewhere with another financial institution?"

This is a bold faced lie, and we spent the remainder of the day blasting and battling BoA, who eventually came back in the afternoon and said that they would change the policy on Monday (to which my response was "why are you waiting until Monday....this is a first come / first serve and limited resource package....you are screwing thousands upon thousands of small businesses and their employees!)

But I digress: At least BoA was taking applications (last I heard 85,000 worth approx. $22B).....I don't believe PNC bank (my company's bank) took a single application.

My sense with the big banks is that they are going to get 80 - 85% of the applicants and perhaps even larger share of the actual value of the loans. The SBA is backing this, but not forever, so their hang-up is "what happens with the unforgiven loans once the SBA backs out on unforgiven portions?" Given that there is virtually no due diligence requirements, it's not like the banks can vet the applicants, so there is risk associated there for them, and they have to work those details out.

So, BoA's requirement of only taking applicants that are existing credit customers gives them opportunity to vet the applications and ultimately role unforgiven debt into existing lines of credit. My beef is that (a) they lied and said it was SBA and treasury guidelines and (b) the program is first come / first serve w/ any eligible applicant needing only to go to an SBA lender. Otherwise, it makes perfect sense that they are hedging their (unknown) risk.

So the smaller banks, who are very likely not only going to get significantly less PPP activity, but also smaller loan values, are willing to take that risk. Why? Well, a loan that is under $350K carries a 5% application fee the SBA is paying to them. the fee % decreases with higher loan values, but they stand to make a lot of profit on the processing of the loans, with little risk on the back end of unforgiven loans. For that reason, I think the small banks are just fine with taking the risk in exchange for processing the loans

Mililo,
Do you think the big banks will not be interested if the loans are under 100k since they get 5%?
I run 3 golf courses in Southern California for 3 different cities. Two of my contracts are pass through expenses. The employees work for me however I get reimbursed by the city for the cost of their payroll. I only applied for the 3rd course which is a completely different contract that is based on revenue share and I pay everyone with no reimbursement.
Just curious if it’s better or worse to have a smaller amount requested?

[mililo4cpa]

Originally Posted by Papachief

Mililo,
Do you think the big banks will not be interested if the loans are under 100k since they get 5%?
I run 3 golf courses in Southern California for 3 different cities. Two of my contracts are pass through expenses. The employees work for me however I get reimbursed by the city for the cost of their payroll. I only applied for the 3rd course which is a completely different contract that is based on revenue share and I pay everyone with no reimbursement.
Just curious if it’s better or worse to have a smaller amount requested?

Banks won't care....and there will be plenty of PPP loans under $100K. for instance, as of today, BoA has processed 145K loans $30B...an average of $209K per loan.....certainly plenty of loans under $100K in that lot I'd imagine.

Per the treasury fact sheet - https://home.treasury.gov/system/fil...Fact-Sheet.pdf - all business can apply at any SBA lender (assumes eligibility is met). What the big banks are doing is limiting the applications to existing customers (which I have a problem with to a degree, because that's not consistent with what has been outlined and the program is first come / first served, but I understand their perspective)

At any rate, regardless of your payroll amounts, you should apply through your bank, because loan size is irrelevant....

[O.city]

Mililo, I talked to a buddy who's a banker about my issue with the other office. He is gonna talk to his SBA guy, he said he coudl go ahead and apply it and see what they say.