BassNBrew
Footballguy
In our state you can apply for an exemption. I think I read you can stay open until they rule, but I may have read that wrong.
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*** OFFICIAL *** COVID-19 CoronaVirus Thread. Fresh epidemic fears as child pneumonia cases surge in Europe after China outbreak. NOW in USA (16 Viewers)
- Thread starter Big League Chew
- Start date
pollardsvision
Footballguy
Still trying to get the details on this and figure out the best way to go.
Anybody know about companies with employees that got laid off and signed up for unemployment for a week or two? Would they still qualify for this (when brought back)?
And is it true that it all starts as a loan, but if you meet certain criteria it becomes forgiven? That concerns me. I understand why, but still don't like the risk that one screw up in process would mean debt.
In the backdrop of some generous unemployment, I'm not sure which way to go.
Last edited by a moderator:
rcam
Footballguy
Redwes25
Footballguy
I give it about 3 days until over a 1000 American are dying a day. We have failed as a country to contain this virus.
Last edited by a moderator:
IvanKaramazov
Footballguy
No, because those of us who were posting in this thread six weeks ago knew perfectly well that this was coming to the US.
matuski
Footballguy
BassNBrew
Footballguy
Your employees would be better off with the unemployment. You would do better taking the loan and doing take out if you could exceed food cost.
https://www.rubio.senate.gov/public/_cache/files/ef2d5d75-82b2-4de8-9e4e-89e1cdc2b758/EA7D2DA06BB292AB5903710F77D02485.final-section-by-section---keeping-american-workers-employed-and-paid-act.pdf
I think you can bring them back.
shader
Footballguy
I'm sure you thought of this, but is there any way your personal trainers can conduct virtual sessions? I know I'm struggling to stay in shape right now. Having a virtual training session over Zoom is an idea to keep some money coming in, though obviously the training won't be as good as it was in your studios.
Mr Anonymous
Footballguy
As someone who has been pushing for the use of masks (and gloves) for everyone as a way to get society moving without contributing to the spread, it's pretty infuriating to hear the CDC do a 180 on them. Better late than never I guess.
CDC considering recommending general public wear face coverings in public
This right here below is where they went wrong at the outset. We now know that you can be spreading this virus and not ever feel a thing...
And anyone who wants to jump on this early section of the article and stop there, KEEP READING...
Even if you have fears that they're not 100% effective, understand that social distancing plus masks is certainly better than social distancing without them. And as people continue to struggle with the discipline of staying 6 feet away from each, if not ignoring it all together, a movement to require masks in public would be a huge step forward in slowing the transmission of this virus.
IMO, this is just step one in eventually making them mandatory in public. First they soften their stance as they've now done. Next they'll encourage everyone where to them. Finally they'll make them mandatory and end the shutdown.
CDC considering recommending general public wear face coverings in public
This right here below is where they went wrong at the outset. We now know that you can be spreading this virus and not ever feel a thing...
And anyone who wants to jump on this early section of the article and stop there, KEEP READING...
Even if you have fears that they're not 100% effective, understand that social distancing plus masks is certainly better than social distancing without them. And as people continue to struggle with the discipline of staying 6 feet away from each, if not ignoring it all together, a movement to require masks in public would be a huge step forward in slowing the transmission of this virus.
IMO, this is just step one in eventually making them mandatory in public. First they soften their stance as they've now done. Next they'll encourage everyone where to them. Finally they'll make them mandatory and end the shutdown.
gianmarco
Footballguy
It's a collective "we" in this country as there were plenty of people who didn't believe the numbers (look no further than our government). Not "we" in this thread.
Mr Anonymous
Footballguy
Timely post my friend. If people are going to carry on like normal, at least make everyone wear masks and gloves.
Contract tracing is great if you start early and test extensively. We didn’t. When you don’t start early, the approach has to quickly switch to treating everyone like they may have CV with strict social distancing.
beer 30
Footballguy
gianmarco
Footballguy
Another post from the medical community to feel free to share. As time passes and we're tempted to go out to get that tool we need for a home improvement or a quick grocery run, just another reminder.
I am not a germaphobe. I have never wiped a grocery cart handle before now. I don’t wear a mask during flu season in my office. I love for my kids to play in dirt and I welcome the daily exposures they have in our house, school and life. I have the utmost respect for the immune system and the amazing job it does every single day, battling more antigens than you ever knew existed. Yet, this is completely different.
If this is not causing your life to be completely changed, in every area, you are doing it wrong. If you are hosting dinner parties, you are doing it wrong. If you are running to the grocery/hardware store/Target every time the mood strikes, you are doing it wrong. If your kids are NOT complaining every day that they want to be with their friends, you are doing it wrong. If you are traveling outside of what is required for your “essential worker” job, you are doing it wrong. If you are wearing N95 masks to the grocery store, when doctors and nurses are going without, you are doing it wrong. If you are wearing a surgical mask to the grocery, and you have a hole cut out for your nose. . .well, keep doing it; that’s just Darwinism.
If you are on a beach and it isn’t part of your private backyard, you are doing it wrong. If you are participating in any street parties, in any part of town, you are doing it wrong. If you don’t treat every interaction with another human (outside of your in-home family) as if you could pass this disease to them, and them to you, you are doing it wrong. If you haven’t tried to figure out which hand should be your “dirty” hand when interacting with grocers/cashiers/delivery people, you are doing it wrong. If you are playing golf, or tennis, or going for walks and stopping to talk in large groups, you are doing it wrong. If you are still saying this is ‘just the flu’ or this is being blown out of proportion, you are doing it wrong.
I see you. And I (and many others) are judging you. Your bad choices are impacting all of us. You don’t get to be outside of the rules. I am playing by all of the rules, and I am still certain that I am not doing it completely right. This is hard and it must continue to be hard and everyone must play by the same set of rules so that it can eventually end without an excessive amount of casualties, and we can go back to something that resembles regular life. Every time you don’t play by the rules, you are not only setting yourself up for exposure, you are exposing everyone else you come into contact with, even if you don’t have any symptoms. You are exposing me and my coworkers to more illness, more sick people, more risk, simply because you don’t want to play by the rules.
I have to go to work, and I have to reuse equipment that may not even protect me, and it may not even protect you when you come see me and you are STILL DOING IT WRONG. I leave after hours of repeated exposures to patients and families who may be silently spreading coronavirus and infecting me and my staff, and you are STILL DOING IT WRONG. I have bruises around my nose & mouth from the mask that I wear to try to protect me as best I can & I have colleagues around the world who are exhausted and sick and dying and making decisions that were never meant to be part of the Hippocratic Oath, and you are STILL DOING IT WRONG. I can’t hug my kids when I come home after a long, scary, gut-wrenching day because I am potentially teeming with infection, and I have many friends who have just moved away from their families so they aren’t at risk, and you are STILL DOING IT WRONG.
The rules apply to all of us, and yet so many are still doing it wrong. If you aren’t sure if you should be doing something, err on the side of caution, and don’t do it. STAY HOME. That actually means STAY HOME. STAY. HOME. This is hard for everyone, but every person who thinks these rules do not apply to you is making it harder.
mphtrilogy
Footballguy
I think Masks for everyone will be the only way we get this thing going again, I can see it being a requirement for School in September... it's a big cultural hurdle though, so....
Ministry of Pain
Footballguy
Snorkelson
Footballguy
I agree with the idea and the timing could be good as well because lots of people are out of work, but ignores the part about an ever increasing military budget. I’m hopeful, but balk at the idea of giving this administration another 2 trillion to dole out in contracts.
Ministry of Pain
Footballguy
There is no way you can get 100% of folks to follow any of this.
We have tons of laws on the books, they aren't enforced. We can continue to say LOCKDOWN, arrest people and give people perm records for stepping outside of their homes but it quickly turns into a Sci Fi nightmare and I hate to keep bringing it up but we don't want to upset too many gun owners, that's all I'm saying on that topic any more.
It's a matter of time until the powder keg is lit and a major push back from some areas of the country is seen.
Keerock
Footballguy
Dinsy Ejotuz
Footballguy
Today they are, yes. But as I understand it a legit three week total shutdown and closed borders would let you hit the reset button.
BobbyLayne
Footballguy
msommer
Footballguy
Ministry of Pain
Footballguy
Are you sitting down? Because that number will hit 8-10 Trillion before we get out of this...and who cares? Just add it to the debt and get things back rolling and we'll pay it off over time. There is no reason to traumatize Americans who really didn't do anything wrong. Sure some citizens are fools but I have no desire to watch perfectly normal folks perish and have their minds rocked inside out because they can't feed their families in a little over 2-3 weeks from where they were in February.
I'm sorry but it's just not right. And I'm OK with going as far in debt as need and then figuring out how we can get these companies who are getting all the bailout money to help in paying it back to the Feds but that's likely a pipe dream too.
Quint
Footballguy
i copied/pasted this analysis from an attorney on a wine board. i will put his condensed version below, with legalese below in a spoiler, and then some FAQs to which he has provided his own interpretation.
**please note: this is not to be considered legal advice and is simply an opinion on how the SBA program may be applied. before pursuing any course of action you should consult with your attorney, accountant, and/or financial advisor**
_________________________________________________________________________________________
A BRIEF QUICK AND DIRTY SUMMARY OF THE SBA LOAN STATUTORY AMENDMENTS.
The law covers all businesses with 500 or fewer employees, with no revenue cap. Some larger companies may be eligible. The revenue caps under existing rules are removed. Under the new law:
1. The interest rate is 4%.
2. The loan proceeds can only be used for certain specified items but rent and salaries are permissible expenses.
3. There is a complex forgiveness program for up to the full loan amount but the borrower loses a portion or all of the forgiveness if you terminate more than a certain number of employees or if you reduce salaries by more than 25%.
4. #3 is measured by employees with salaries under $100,000 or in some cases by the first $100,000 of salaries of employees with salaries over $100,000.
5. The forgiveness is NOT taxable reduction of indebtedness income but the expenses paid with the loan appear to be deductible like any other tax deduction.
6. I think, but I am not sure, that employees are deemed to include anyone for whom a firm pays payroll taxes. I cannot find a clear definition in the statute.
7. There are a bunch of changes to the laws applicable to banks to make banks want to make these loans. For example, the risk weight on the loans is zero.
This is Section 1106 of the statute regarding loan forgiveness. The calculations are complicated, so have fun if you are interested.
SEC. 1106. LOAN FORGIVENESS.
a) DEFINITIONS.-In this section-
1) the term ''covered loan'' means a loan guaranteed under paragraph (36) of section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as added by section 1102;
2) the term ''covered mortgage obligation'' means any indebtedness or debt instrument incurred in the ordinary course of business that-
A) is a liability of the borrower;
B) is a mortgage on real or personal property; and
C) was incurred before February 15, 23 2020;
3) the term ''covered period'' means the 8 week period beginning on the date of the origination of a covered loan;
(4) the term ''covered rent obligation'' means rent obligated under a leasing agreement in force before February 15, 2020;
5) the term ''covered utility payment'' means payment for a service for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020; 9 (6) the term ''eligible recipient'' means the recipient of a covered loan;
7) the term ''expected forgiveness amount'' means the amount of principal that a lender reason ably expects a borrower to expend during the covered period on the sum of any-
A) payroll costs;
B) payments of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation);
C) payments on any covered rent obligation; and
D) covered utility payments; and
the term ''payroll costs'' has the meaning given that term in paragraph (36) of section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as added by section 1102 of this Act.b) FORGIVENESS. An eligible recipient shall be eligible for forgiveness of indebtedness on a covered loan in an amount equal to the sum of the following costs incurred and payments made during the covered period:
1) Payroll costs.
2) Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation).
3) Any payment on any covered rent obligation.
4) Any covered utility payment.
c) TREATMENT OF AMOUNTS FORGIVEN.-
1) IN GENERAL.-Amounts which have been forgiven under this section shall be considered canceled indebtedness by a lender authorized under section 7(a) of the Small Business Act (15 U.S.C. 20 636(a)).
2) PURCHASE OF GUARANTEES.-For purposes of the purchase of the guarantee for a covered loan by the Administrator, amounts which are forgiven under this section shall be treated in accordance with the procedures that are otherwise applicable to a loan guaranteed under section 7(a) of the Small Business Act (15 U.S.C. 636(a)).
3) REMITTANCE.-Not later than 90 days after the date on which the amount of forgiveness under this section is determined, the Administrator shall remit to the lender an amount equal to the amount of forgiveness, plus any interest accrued through the date of payment.
4) ADVANCE PURCHASE OF COVERED LOAN.-
A) REPORT.-A lender authorized under section 7(a) of the Small Business Act (15 U.S.C. 636(a)), or, at the discretion of the Administrator, a third party participant in the secondary market, may, report to the Administrator an expected forgiveness amount on a covered loan or on a pool of covered loans of up to 100 percent of the principal on the covered loan or pool of covered loans, respectively.
B) PURCHASE.-The Administrator shall purchase the expected forgiveness amount described in subparagraph (A) as if the amount were the principal amount of a loan guaranteed under section 7(a) of the Small Business Act 24 636(a)).
(C) TIMING.-Not later than 15 days after the date on which the Administrator receives a report under subparagraph (A), the Administrator shall purchase the expected forgiveness amount under subparagraph (B) with respect to each covered loan to which the report relates.
d) LIMITS ON AMOUNT OF FORGIVENESS.-
1) AMOUNT MAY NOT EXCEED PRINCIPAL. The amount of loan forgiveness under this section shall not exceed the principal amount of the financing made available under the applicable covered loan.
2) REDUCTION BASED ON REDUCTION IN NUM BER OF EMPLOYEES.-
A) IN GENERAL.-The amount of loan forgiveness under this section shall be reduced, but not increased, by multiplying the amount described in subsection (b) by the quotient obtained by dividing-
i) the average number of full-time equivalent employees per month employed by the eligible recipient during the covered period; by
ii)(I) at the election of the borrower
(aa) the average number of full time equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019 and ending on June 30, 6 2019; or
bb) the average number of full time equivalent employees per month employed by the eligible recipient during the period beginning on January 1, 2020 and ending on February 29, 12 2020; or
II) in the case of an eligible recipient that is seasonal employer, as determined by the Administrator, the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019 and ending on June 30, 2019.
B) CALCULATION OF AVERAGE NUMBER OF EMPLOYEES.-For purposes of subparagraph (A), the average number of full-time equivalent employees shall be determined by calculating the average number of full-time equivalent employees for each pay period falling within a month.
3) REDUCTION RELATING TO SALARY AND WAGES.-
A) IN GENERAL.-The amount of loan forgiveness under this section shall be reduced by the amount of any reduction in total salary or wages of any employee described in subparagraph (B) during the covered period that is in excess of 25 percent of the total salary or wages of the employee during the most recent full quarter during which the employee was employed before the covered period.
B) EMPLOYEES DESCRIBED.-An employee described in this subparagraph is any employee who did not receive, during any single pay period during 2019, wages or salary at an annualized rate of pay in an amount more than $100,000.
4) TIPPED WORKERS.-An eligible recipient with tipped employees described in section 3(m)(2)(A) of the Fair Labor Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)) may receive forgive ness for additional wages paid to those employees.
5) EXEMPTION FOR RE-HIRES.
(A) IN GENERAL.-In a circumstance described in subparagraph (B), the amount of loan forgiveness under this section shall be determined without regard to a reduction in the number of full-time equivalent employees of an eligible recipient or a reduction in the salary of 1 or more employees of the eligible recipient, as applicable, during the period beginning on February 15, 2020 and ending on the date that is 30 days after the date of enactment of this Act.
B) CIRCUMSTANCES.-A circumstance described in this subparagraph is a circumstance-
i) in which-
I) during the period beginning on February 15, 2020 and ending on the date that is 30 days after the date of enactment of this Act, there is a re duction, as compared to February 15, 2020, in the number of full-time equivalent employees of an eligible recipient; and
II) not later than June 30, 2020, the eligible employer has eliminated the reduction in the number of full-time equivalent employees;
ii) in which-
I) during the period beginning on February 15, 2020 and ending on the date that is 30 days after the date of enactment of this Act, there is a re duction, as compared to February 15, 2020, in the salary or wages of 1 or more employees of the eligible recipient; and
II) not later than June 30, 2020, the eligible employer has eliminated the reduction in the salary or wages of such employees; or
iii) in which the events described in clause (i) and (ii) occur.
6) EXEMPTIONS.-The Administrator and the Secretary of the Treasury may prescribe regulations granting de minimis exemptions from the requirements under this subsection.
e) APPLICATION.-An eligible recipient seeking loan forgiveness under this section shall submit to the lender that is servicing the covered loan an application, which shall include
(1) documentation verifying the number of full time equivalent employees on payroll and pay rates for the periods described in subsection (d), including-
A) payroll tax filings reported to the Internal Revenue Service; and
B) State income, payroll, and unemployment insurance filings;
2) documentation, including cancelled checks, payment receipts, transcripts of accounts, or other documents verifying payments on covered mortgage obligations, payments on covered lease obligations, and covered utility payments;
3) a certification from a representative of the eligible recipient authorized to make such certifications that-
A) the documentation presented is true and correct; and
B) the amount for which forgiveness is re quested was used to retain employees, make interest payments on a covered mortgage obligation, make payments on a covered rent obligation, or make covered utility payments; and
4) any other documentation the Administrator determines necessary.
(f) PROHIBITION ON FORGIVENESS WITHOUT DOCUMENTATION.-No eligible recipient shall receive forgive ness under this section without submitting to the lender that is servicing the covered loan the documentation re quired under subsection (e).
g) DECISION.-Not later than 60 days after the date on which a lender receives an application for loan forgive ness under this section from an eligible recipient, the lender shall issue a decision on the an application.
h) HOLD HARMLESS.-If a lender has received the documentation required under this section from an eligible recipient attesting that the eligible recipient has accurately verified the payments for payroll costs, payments on covered mortgage obligations, payments on covered lease obligations, or covered utility payments during covered period-
1) an enforcement action may not be taken against the lender under section 47(e) of the Small Business Act (15 U.S.C. 657t(e)) relating to loan forgiveness for the payments for payroll costs, payments on covered mortgage obligations, payments on covered lease obligations, or covered utility payments, as the case may be; and
2) the lender shall not be subject to any penalties by the Administrator relating to loan forgive
ness for the payments for payroll costs, payments on covered mortgage obligations, payments on covered lease obligations, or covered utility payments, as the case may be.
i) TAXABILITY.-For purposes of the Internal Revenue Code of 1986, any amount which (but for this sub section) would be includible in gross income of the eligible recipient by reason of forgiveness described in subsection
b) shall be excluded from gross income.
j) RULE OF CONSTRUCTION.-The cancellation of indebtedness on a covered loan under this section shall not otherwise modify the terms and conditions of the covered loan.
k) REGULATIONS.-Not later than 30 days after the date of enactment of this Act, the Administrator shall issue guidance and regulations implementing this section
FAQs (This information is correct as of now, but may change when the regulations are released.)
The Payroll Protection Program, or PPP, is the SBA loan program that you have heard about regarding loans that you may not have to pay back.
Do I qualify? Businesses or nonprofits with 500 or fewer employees qualify if current economic conditions require that you obtain the loan to support ongoing operations.
Self-employed or independent contractor? You qualify.
How much can I borrow? Approximately 2.5 times average monthly payroll costs during the 12 month before the loan closes, or a shorter period if you have not been in business for a year, excluding any compensation over $100,000 paid to people whose salary is over $100,000 per year. Health insurance and some other benefits are part of payroll costs.
Interest rate? 4%. When partially forgiven, interest is payable only on the amount not forgiven. Interest itself is not forgiven.
What can I use the loan for? Salaries and other payroll costs, certain other health care benefits, mortgage interest, rent, utilities and interest on other debt incurred prior to February 15, 2020. However, dollars are fungible and you do not have to trace every dollar.
Who is the lender? Banks or other lenders approved to make SBA loans. Finding a lender will be easy.
Does the lender worry about risk? Not much, because the SBA is giving a 100% guarantee.
Personal guarantee? No, so long as you use the loan proceeds for permitted purposes.
Collateral? No.
Loan fees? None to the SBA, and the SBA pays origination fees to your bank, so bank fees should be minimal or nonexistent.
Do I have to pay the loan back? That part of the loan proceeds you spend on salary, rent, utilities and certain debts during the eight-week period after the loan is made may be forgiven. Don’t game the system and sign a new lease and get a new utility hook up – that doesn’t work. You may lose part of the forgiveness if you reduce salaries or fire employees. Also, your initial payments for the first 6-12 months are deferred.
How do I risk having my forgiveness reduced? Two ways, fewer employees or reductions in salary.
Fewer employees.
The average number of full-time equivalent employees per month from February 15 through June 30 may not be less than the average during one of two periods, either (your choice) February 15 to June 30, 2019 or January 1, 2020 to February 29, 2020. If less, there is a pro rata reduction in the forgiveness, but new hires prior to June 30, 2020 may save you.
Reductions in salary?
There may be an error in drafting, but we think they intended that any salary reduction of more than 25% for an employee earning less than $100,000 results in a dollar for dollar reduction in forgiveness.
Does the lender lose money on the forgiveness? No. The SBA reimburses the lender.
What about any part of the loan that is not forgiven? You must repay it with a term of up to 10 years.
Restaurants with tipped employees? Forgiveness applies to wages you pay to those employees not including their tips.
Other questions? Answers must await SBA regulations, expected in the next 15 to 30 days. Clients interested in PPP loans should work with us to prepare to apply and worry about the regulations later.
hagmania
Footballguy
Keerock
Footballguy
Mr Anonymous
Footballguy
Btw, in case anyone is wondering masks and gloves are still surprisingly easy to order on Amazon, and the options are plentiful at normal prices. Might not be a bad idea to have them on hand just in case they become required at some point to venture out in public.
Redwes25
Footballguy
I disagree with this. I wear a mask when I go to the grocery store. That is not doing it wrong.
BobbyLayne
Footballguy
Peyton Marino
Footballguy
Mr Anonymous
Footballguy
Not sure, but the n95s are supposed to be saved for the health professionals since they're in low supply.
msommer
Footballguy
gianmarco
Footballguy
Peyton Marino
Footballguy
did a quick amazon search and found a bunch of sketch looking listings for kn95 and n95. any particular seller you would recommend?
rick6668
Footballguy
BobbyLayne
Footballguy
Those are new cases?
Would it be correct to say Deaths lag Hospitalization numbers which lag Confirmed cases?
Believe we’re at 8K hospitalization in NYC and well above 2K ICU (around 2,300 yesterday.) Capacity for the latter is around 2,975 IIRC.
Don't Noonan
Footballguy
BobbyLayne
Footballguy
Wonder if Florida’s 21M residents are even older than Italy’s?Italy tried a lock down on just part of the country.
That worked well
hagmania
Footballguy
Mr Anonymous
Footballguy
These are the masks I have...
https://www.amazon.com/gp/product/B085VV2PNC/ref=ppx_yo_dt_b_asin_title_o00_s00?ie=UTF8&psc=1
These are the gloves...
https://www.amazon.com/gp/product/B07DRNZ49S/ref=ppx_yo_dt_b_asin_title_o01_s00?ie=UTF8&psc=1
We don't need n95s as far as I can tell because we're not providing care to the sick.
https://www.amazon.com/gp/product/B085VV2PNC/ref=ppx_yo_dt_b_asin_title_o00_s00?ie=UTF8&psc=1
These are the gloves...
https://www.amazon.com/gp/product/B07DRNZ49S/ref=ppx_yo_dt_b_asin_title_o01_s00?ie=UTF8&psc=1
We don't need n95s as far as I can tell because we're not providing care to the sick.
jamny
Footballguy
While the condo we bought in December in Boise sits vacant, we are thankful that we had the chance to buy and furnish it. We have no idea how selling our house here in NY will go but we know we are ready to go asap and hope to be there by the winter. We are extra motivated to get out of here now.
shader
Footballguy
Yes, new cases.
In theory you are correct, but in reality we don't know what stage people are at when they become confirmed cases.
When you contract the disease, you'll typically be hospitalized around 2-3 weeks later. But that first week is the incubation stage and you don't even know you have it.
So when is New York doing their testing and how long do the results take to come in? If they aren't testing until people show significant symptoms, and if the results take 2-5 days to come in, the lag may not be very long.
Redwes25
Footballguy
It says I am doing it wrong by wearing a mask to the grocery store in the 2nd paragraph.
BobbyLayne
Footballguy
rick6668
Footballguy
E-Z Glider
Footballguy
There are several different programs out there and its a bit confusing. What you are describing here are the SBA loans. There is also a $10K EIDL grant that is available immediately. Both of these (to my knowledge) have to be repaid. The Paycheck Protection Plan is what covers payroll+rent for 8 weeks and does not need to be repaid (assuming you spend the money on payroll+rent AND you dont lay anyone off).i copied/pasted this analysis from an attorney on a wine board. i will put his condensed version below, with legalese below in a spoiler, and then some FAQs to which he has provided his own interpretation.
**please note: this is not to be considered legal advice and is simply an opinion on how the SBA program may be applied. before pursuing any course of action you should consult with your attorney, accountant, and/or financial advisor**
_________________________________________________________________________________________
A BRIEF QUICK AND DIRTY SUMMARY OF THE SBA LOAN STATUTORY AMENDMENTS.
The law covers all businesses with 500 or fewer employees, with no revenue cap. Some larger companies may be eligible. The revenue caps under existing rules are removed. Under the new law:
1. The interest rate is 4%.
2. The loan proceeds can only be used for certain specified items but rent and salaries are permissible expenses.
3. There is a complex forgiveness program for up to the full loan amount but the borrower loses a portion or all of the forgiveness if you terminate more than a certain number of employees or if you reduce salaries by more than 25%.
4. #3 is measured by employees with salaries under $100,000 or in some cases by the first $100,000 of salaries of employees with salaries over $100,000.
5. The forgiveness is NOT taxable reduction of indebtedness income but the expenses paid with the loan appear to be deductible like any other tax deduction.
6. I think, but I am not sure, that employees are deemed to include anyone for whom a firm pays payroll taxes. I cannot find a clear definition in the statute.
7. There are a bunch of changes to the laws applicable to banks to make banks want to make these loans. For example, the risk weight on the loans is zero.
Reveal hidden contents
This is Section 1106 of the statute regarding loan forgiveness. The calculations are complicated, so have fun if you are interested.
SEC. 1106. LOAN FORGIVENESS.
a) DEFINITIONS.-In this section-
1) the term ''covered loan'' means a loan guaranteed under paragraph (36) of section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as added by section 1102;
2) the term ''covered mortgage obligation'' means any indebtedness or debt instrument incurred in the ordinary course of business that-
A) is a liability of the borrower;
B) is a mortgage on real or personal property; and
C) was incurred before February 15, 23 2020;
3) the term ''covered period'' means the 8 week period beginning on the date of the origination of a covered loan;
(4) the term ''covered rent obligation'' means rent obligated under a leasing agreement in force before February 15, 2020;
5) the term ''covered utility payment'' means payment for a service for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020; 9 (6) the term ''eligible recipient'' means the recipient of a covered loan;
7) the term ''expected forgiveness amount'' means the amount of principal that a lender reason ably expects a borrower to expend during the covered period on the sum of any-
A) payroll costs;
B) payments of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation);
C) payments on any covered rent obligation; and
D) covered utility payments; and
b) FORGIVENESS. An eligible recipient shall be eligible for forgiveness of indebtedness on a covered loan in an amount equal to the sum of the following costs incurred and payments made during the covered period:
1) Payroll costs.
2) Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation).
3) Any payment on any covered rent obligation.
4) Any covered utility payment.
c) TREATMENT OF AMOUNTS FORGIVEN.-
1) IN GENERAL.-Amounts which have been forgiven under this section shall be considered canceled indebtedness by a lender authorized under section 7(a) of the Small Business Act (15 U.S.C. 20 636(a)).
2) PURCHASE OF GUARANTEES.-For purposes of the purchase of the guarantee for a covered loan by the Administrator, amounts which are forgiven under this section shall be treated in accordance with the procedures that are otherwise applicable to a loan guaranteed under section 7(a) of the Small Business Act (15 U.S.C. 636(a)).
3) REMITTANCE.-Not later than 90 days after the date on which the amount of forgiveness under this section is determined, the Administrator shall remit to the lender an amount equal to the amount of forgiveness, plus any interest accrued through the date of payment.
4) ADVANCE PURCHASE OF COVERED LOAN.-
A) REPORT.-A lender authorized under section 7(a) of the Small Business Act (15 U.S.C. 636(a)), or, at the discretion of the Administrator, a third party participant in the secondary market, may, report to the Administrator an expected forgiveness amount on a covered loan or on a pool of covered loans of up to 100 percent of the principal on the covered loan or pool of covered loans, respectively.
B) PURCHASE.-The Administrator shall purchase the expected forgiveness amount described in subparagraph (A) as if the amount were the principal amount of a loan guaranteed under section 7(a) of the Small Business Act 24 636(a)).
(C) TIMING.-Not later than 15 days after the date on which the Administrator receives a report under subparagraph (A), the Administrator shall purchase the expected forgiveness amount under subparagraph (B) with respect to each covered loan to which the report relates.
d) LIMITS ON AMOUNT OF FORGIVENESS.-
1) AMOUNT MAY NOT EXCEED PRINCIPAL. The amount of loan forgiveness under this section shall not exceed the principal amount of the financing made available under the applicable covered loan.
2) REDUCTION BASED ON REDUCTION IN NUM BER OF EMPLOYEES.-
A) IN GENERAL.-The amount of loan forgiveness under this section shall be reduced, but not increased, by multiplying the amount described in subsection (b) by the quotient obtained by dividing-
i) the average number of full-time equivalent employees per month employed by the eligible recipient during the covered period; by
ii)(I) at the election of the borrower
(aa) the average number of full time equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019 and ending on June 30, 6 2019; or
bb) the average number of full time equivalent employees per month employed by the eligible recipient during the period beginning on January 1, 2020 and ending on February 29, 12 2020; or
II) in the case of an eligible recipient that is seasonal employer, as determined by the Administrator, the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019 and ending on June 30, 2019.
B) CALCULATION OF AVERAGE NUMBER OF EMPLOYEES.-For purposes of subparagraph (A), the average number of full-time equivalent employees shall be determined by calculating the average number of full-time equivalent employees for each pay period falling within a month.
3) REDUCTION RELATING TO SALARY AND WAGES.-
A) IN GENERAL.-The amount of loan forgiveness under this section shall be reduced by the amount of any reduction in total salary or wages of any employee described in subparagraph (B) during the covered period that is in excess of 25 percent of the total salary or wages of the employee during the most recent full quarter during which the employee was employed before the covered period.
B) EMPLOYEES DESCRIBED.-An employee described in this subparagraph is any employee who did not receive, during any single pay period during 2019, wages or salary at an annualized rate of pay in an amount more than $100,000.
4) TIPPED WORKERS.-An eligible recipient with tipped employees described in section 3(m)(2)(A) of the Fair Labor Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)) may receive forgive ness for additional wages paid to those employees.
5) EXEMPTION FOR RE-HIRES.
(A) IN GENERAL.-In a circumstance described in subparagraph (B), the amount of loan forgiveness under this section shall be determined without regard to a reduction in the number of full-time equivalent employees of an eligible recipient or a reduction in the salary of 1 or more employees of the eligible recipient, as applicable, during the period beginning on February 15, 2020 and ending on the date that is 30 days after the date of enactment of this Act.
B) CIRCUMSTANCES.-A circumstance described in this subparagraph is a circumstance-
i) in which-
I) during the period beginning on February 15, 2020 and ending on the date that is 30 days after the date of enactment of this Act, there is a re duction, as compared to February 15, 2020, in the number of full-time equivalent employees of an eligible recipient; and
II) not later than June 30, 2020, the eligible employer has eliminated the reduction in the number of full-time equivalent employees;
ii) in which-
I) during the period beginning on February 15, 2020 and ending on the date that is 30 days after the date of enactment of this Act, there is a re duction, as compared to February 15, 2020, in the salary or wages of 1 or more employees of the eligible recipient; and
II) not later than June 30, 2020, the eligible employer has eliminated the reduction in the salary or wages of such employees; or
iii) in which the events described in clause (i) and (ii) occur.
6) EXEMPTIONS.-The Administrator and the Secretary of the Treasury may prescribe regulations granting de minimis exemptions from the requirements under this subsection.
e) APPLICATION.-An eligible recipient seeking loan forgiveness under this section shall submit to the lender that is servicing the covered loan an application, which shall include
(1) documentation verifying the number of full time equivalent employees on payroll and pay rates for the periods described in subsection (d), including-
A) payroll tax filings reported to the Internal Revenue Service; and
B) State income, payroll, and unemployment insurance filings;
2) documentation, including cancelled checks, payment receipts, transcripts of accounts, or other documents verifying payments on covered mortgage obligations, payments on covered lease obligations, and covered utility payments;
3) a certification from a representative of the eligible recipient authorized to make such certifications that-
A) the documentation presented is true and correct; and
B) the amount for which forgiveness is re quested was used to retain employees, make interest payments on a covered mortgage obligation, make payments on a covered rent obligation, or make covered utility payments; and
4) any other documentation the Administrator determines necessary.
(f) PROHIBITION ON FORGIVENESS WITHOUT DOCUMENTATION.-No eligible recipient shall receive forgive ness under this section without submitting to the lender that is servicing the covered loan the documentation re quired under subsection (e).
g) DECISION.-Not later than 60 days after the date on which a lender receives an application for loan forgive ness under this section from an eligible recipient, the lender shall issue a decision on the an application.
h) HOLD HARMLESS.-If a lender has received the documentation required under this section from an eligible recipient attesting that the eligible recipient has accurately verified the payments for payroll costs, payments on covered mortgage obligations, payments on covered lease obligations, or covered utility payments during covered period-
1) an enforcement action may not be taken against the lender under section 47(e) of the Small Business Act (15 U.S.C. 657t(e)) relating to loan forgiveness for the payments for payroll costs, payments on covered mortgage obligations, payments on covered lease obligations, or covered utility payments, as the case may be; and
2) the lender shall not be subject to any penalties by the Administrator relating to loan forgive
ness for the payments for payroll costs, payments on covered mortgage obligations, payments on covered lease obligations, or covered utility payments, as the case may be.
i) TAXABILITY.-For purposes of the Internal Revenue Code of 1986, any amount which (but for this sub section) would be includible in gross income of the eligible recipient by reason of forgiveness described in subsection
b) shall be excluded from gross income.
j) RULE OF CONSTRUCTION.-The cancellation of indebtedness on a covered loan under this section shall not otherwise modify the terms and conditions of the covered loan.
k) REGULATIONS.-Not later than 30 days after the date of enactment of this Act, the Administrator shall issue guidance and regulations implementing this section
FAQs (This information is correct as of now, but may change when the regulations are released.)
The Payroll Protection Program, or PPP, is the SBA loan program that you have heard about regarding loans that you may not have to pay back.
Do I qualify? Businesses or nonprofits with 500 or fewer employees qualify if current economic conditions require that you obtain the loan to support ongoing operations.
Self-employed or independent contractor? You qualify.
How much can I borrow? Approximately 2.5 times average monthly payroll costs during the 12 month before the loan closes, or a shorter period if you have not been in business for a year, excluding any compensation over $100,000 paid to people whose salary is over $100,000 per year. Health insurance and some other benefits are part of payroll costs.
Interest rate? 4%. When partially forgiven, interest is payable only on the amount not forgiven. Interest itself is not forgiven.
What can I use the loan for? Salaries and other payroll costs, certain other health care benefits, mortgage interest, rent, utilities and interest on other debt incurred prior to February 15, 2020. However, dollars are fungible and you do not have to trace every dollar.
Who is the lender? Banks or other lenders approved to make SBA loans. Finding a lender will be easy.
Does the lender worry about risk? Not much, because the SBA is giving a 100% guarantee.
Personal guarantee? No, so long as you use the loan proceeds for permitted purposes.
Collateral? No.
Loan fees? None to the SBA, and the SBA pays origination fees to your bank, so bank fees should be minimal or nonexistent.
Do I have to pay the loan back? That part of the loan proceeds you spend on salary, rent, utilities and certain debts during the eight-week period after the loan is made may be forgiven. Don’t game the system and sign a new lease and get a new utility hook up – that doesn’t work. You may lose part of the forgiveness if you reduce salaries or fire employees. Also, your initial payments for the first 6-12 months are deferred.
How do I risk having my forgiveness reduced? Two ways, fewer employees or reductions in salary.
Fewer employees.
The average number of full-time equivalent employees per month from February 15 through June 30 may not be less than the average during one of two periods, either (your choice) February 15 to June 30, 2019 or January 1, 2020 to February 29, 2020. If less, there is a pro rata reduction in the forgiveness, but new hires prior to June 30, 2020 may save you.
Reductions in salary?
There may be an error in drafting, but we think they intended that any salary reduction of more than 25% for an employee earning less than $100,000 results in a dollar for dollar reduction in forgiveness.
Does the lender lose money on the forgiveness? No. The SBA reimburses the lender.
What about any part of the loan that is not forgiven? You must repay it with a term of up to 10 years.
Restaurants with tipped employees? Forgiveness applies to wages you pay to those employees not including their tips.
Other questions? Answers must await SBA regulations, expected in the next 15 to 30 days. Clients interested in PPP loans should work with us to prepare to apply and worry about the regulations later.
I'd recommend the reddit small biz forum for anyone looking for more specific info... https://www.reddit.com/r/smallbusiness/
gianmarco
Footballguy
Need to read it a bit more carefully.
If you do that "and cut a hole for your nose".....
