Ron Swanson
Footballguy
It may be taking the State system a while to get in line with the new Federal Guidelines? Have you seen your State Unemployment Office post anything yet about the new program and eligibility?
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Small Business Support Group (2 Viewers)
- Thread starter ericttspikes
- Start date
Grahamburn
Footballguy
You have to think the systems are overwhelmed and under prepared for this. The talking heads are saying there will be benefits for the self employed, but it probably takes a while for the people operating the systems to implement the structure for it.
Nick Vermeil
Footballguy
Dot
ericttspikes
Footballguy
Thanks for posting the application. It seems like most of the information lenders may be asking for should be included in our 2019 tax returns, right? Salary, rent payments, 401k, etc. What other documents do you anticipate we'll need, as I'd like to get a start on gathering those as well. Thanks.
Grahamburn
Footballguy
I just compiled all of my 2019 quarterly 941s and RT-6s, 2019 yearly W3 and 940, and all of my payroll reports back to the beginning of 2019 through March 2020 in a folder on my desktop. They're basing the loan amounts completely off of payroll, so I would think you'll need all of these documents at minimum. For the other expenses the lender should be able to average them out based off of your tax returns.
Chemical X
Footballguy
Go to the Plus symbols at the bottom for what documentation is required.
https://www.pnc.com/en/customer-service/paycheck-protection-program.html
Grahamburn
Footballguy
You could furlough her. She would be eligible for unemployment and then can come back to her position once she felt comfortable. Assuming you'd want to hold it for her.
I don't think it would disqualify you, but you may have to end up paying back part of the loan if your payroll is lower because of her absence during the 8 weeks versus your previous months.
pollardsvision
Footballguy
I'm worried about the same. It's hard to find a clear answer, but most seem to think the main issue is that you bring the employees back within a certain time when it makes sense to do so. Basically, they don't want you taking this money then closing shop or not providing jobs. It seems it would be unreasonable to punish business owners for having folks sign up when things are so wildly unknown. 2 weeks ago, when a lot of people started laying off, nobody had a clue what stimulus might be coming.
I don't know. I told my people to sign up and I just did myself too. Pursuing the SBA/PPP stuff and hoping it'll be forgiven when we bring everybody back to regular hours (but also planning in case I'm wrong on that too)
pollardsvision
Footballguy
Not sure if it's been posted, but here is a simple video walking through the SBA Disaster Relief Loan app. Very simple to get started.
https://www.youtube.com/watch?v=1AXQt1iI4C4
https://www.youtube.com/watch?v=1AXQt1iI4C4
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GoBirds
Footballguy
Don't do the bolded, have an agent list it for rent and also look at your loan to see if there is a prepayment penalty to refinance it. Banks are desperate fro good commercial loans right now, you can definitely get your payment down.
E-Z Glider
Footballguy
Is it Preferable to Lay Off or Furlough Staff and Send Them to Unemployment or Keep Them on the Payroll and Get a 7(a) Loan?pollardsvision said:
There are two viable approaches that you can take. The first is more conservative and less disruptive and the second more aggressive but probably better for most.
Approach #1
If you have not already let your staff go and think that doing so will be difficult in terms of employee morale, then consider taking the 7(a) loan at the beginning of the loan application process, as early as the end of this week (April 3). The benefit of this loan is a tax-free gift, via loan forgiveness, to pay 8 weeks worth of your payroll costs, rent, interest on your debt service and utility bills.
$349 billion has been allocated to this program, and it’s conceivable that this money will be depleted before the last day these loans are authorized to be made. If that happens, Congress will likely authorize another round of funding, but that is never guaranteed.
Approach #2
The best way to handle this for most practices will be a two-part approach that takes advantage of unemployment benefits and the 7(a) loans. This is more disruptive to the practice as it requires furloughing or laying off the employees. However, if you’ve already done this, then that is a non-issue:
• If your practice is shut down or largely shut down, then furlough staff and have them apply for unemployment. Thanks to the CARES ACT, they will get traditional unemployment benefits plus a $600 kicker. This will replace all or most of their normal pay, and in some cases give them a raise.
• When you are ready to reopen your practice, rehire your staff then, and obtain the 7(a) loan then. Just do this by the June 30 deadline -- better yet, a couple weeks before then in order to give yourself a cushion. You will use the loan proceeds to pay your overhead when the practice reopens. You should get the benefit of loan forgiveness for the 8 weeks following the date you take your loan (so into July and August). And, so long as the employees are rehired by June 30, the loan forgiveness will not be reduced. In this way, you are taking advantage of unemployment insurance to cover your employees’ wages during the shutdown period and also getting the tax benefits of the 7(a) loan once your practice reopens.
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Grahamburn
Footballguy
Approach #2 is what I'm doing. Tentatively set to reopen on May 1st. I furloughed employees on 3/20/20.
Ned
Footballguy
arrow1
Footballguy
Anarchy99
Footballguy
Hopefully potential good news for me on the unemployment front. The state updated and explained their process on how they are going to handle the self employed. Since they have no record of me paying into the state unemployment system, they will have to manually enter all financial information from the additional forms and tax information they requested. All claims will automatically be denied at first, no need to appeal, but the manual data entry and approval process will take time to sift through. New claims were up 3300% the first week, so I am guessing it will be awhile.
glvsav37
Footballguy
It was pretty straight forward. Actually unlike other govt forms it was well enough laid out and easy to understand, with clear prompts as to what was required and correct/not correct Feedback (as a designer I pay attention to stuff like that). But then again it was from the SBA and not from the IRS.
Not much heavy info was asked, just basic stuff so it’s pretty easy to do yourself (and that’s saying a lot with me)
my only problem is that I did not receive a confirmation email but did get a confirmation/account number. So make sure you note that number down and save it.
glvsav37
Footballguy
Mr Anonymous
Footballguy
Dumb questions.
Are their guidelines for how much to borrow?
What are the rules for when it becomes a grant vs when it's paid back?
Other general stuff?
Thanks.
glvsav37
Footballguy
This was just the initial enrollment, from what I heard it’s on a first come, first served basis. Go getting in early is important. This was just the info collection phase.....but there was a box to claim $10k in immediate grant money (if approved).
My plan it to apply for everything and decide what I need when offered. From what I understand a lot of this Immediate moment is grant-based so it does not need to be paid back (that’s not to say it won’t be factored into your taxes at some point)
other general stuff: basics like when the business stated, how long you were the owner, #of employees, overall gross revenue and total expenses Nothing that requires heavy calculations or complicated tables or spreadsheets
Nick Vermeil
Footballguy
The amount you can borrow is a calculation of payroll, taxes and benefits. Cap employees at $100,000, Total your last 12 months of expenses in these areas (exclude bonus and federal tax) divide by 12 multiply by 2.5. That's what you can borrow.
No payments for 6 months. HOWEVER, if you spend all the money in 8 weeks with at least 75% on payroll expenses the amount can be forgiven if you maintain headcount and salaries. You can reduce some salaries (I believe less than 25%) and still be forgiven if you meet all other criteria.
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I haven't dug into this but this seems helpful too.
https://thehustle.co/the-small-business-owners-guide-to-the-cares-act/
https://thehustle.co/the-small-business-owners-guide-to-the-cares-act/
Nick Vermeil
Footballguy
I don't want to panic or doubt you but I don't think you applied for the Payroll Protection loan. Those loans won't start until tomorrow. It's possible you've applied for an SBA normal disaster loan which does not contain the forgiveness provisions.
Ned
Footballguy
That's the Payroll Protection, not the EIDL. I think Joe was responding to the EIDL.
Ned
Footballguy
If you end up taking the EIDL, be careful how you navigate the PPP. You cannot double dip for payroll expenses between the 2.
Nick Vermeil
Footballguy
E-Z Glider
Footballguy
If you want to know more, read this... https://www.reddit.com/r/smallbusiness/comments/frtw17/psa_there_are_2_different_coronavirus_loans_and/
Ned
Footballguy
No worries - it's a mess. Quick explanation & info. It's further complicated if your state has any programs (we are using one through Delaware).
EIDL = Economic Injury Declaration Loan; its a 'normal' loan, with terms up to 30yrs @ 3.75% https://www.sba.gov/page/disaster-loan-applications#section-header-0 (this is what @glvsav37 applied for).
PPP = Payroll Protection Program (links below). Potentially forgivable, if you can prove you used the money to continue payroll. This opens up tomorrow where applications are through approved SBA lenders. Links originally posted by @Grahamburn
Overview: https://home.treasury.gov/system/files/136/PPP%20--%20Overview.pdf
FactSheet: https://home.treasury.gov/system/files/136/PPP%20Borrower%20Information%20Fact%20Sheet.pdf
Application: https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
ericttspikes
Footballguy
I was on the Chase PPP video conference tonight and they said they haven't received final clarity from Treasury, so there is a chance that no lenders will be accepting applications tomorrow as originally expected. Just have to see. In theory, all these programs would really help small businesses at this time, but the almost insurmountable challenge seems to be implementing any of this and actually getting the relief to the people who need it in a timely manner.
ericttspikes
Footballguy
Ned
Footballguy
Bank of America felt ready as of this morning. I’ll be checking in first thing tomorrow AM.
One
Not Allowed In Mexico
Punxsutawney Phil
Footballguy
Systems being overwhelmed & under prepared was an acceptable excuse in 2008. This is absolutely ridiculous that they haven't been able to scale up in the past 12 years.
Wait until we hear that half a trillion dollars was sent to inmates.
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brun
Footballguy
I would think that if you haven't paid for unemployment insurance, you wouldn't be able to collect unemployment benefits. Any insurance program that ran this way would surely go broke unless the benefit was paid out of some other source and just admin'd by the state Employment Security.
Anarchy99
Footballguy
I end up paying self employment tax, but it’s not the same as a traditional employee at a company where the company reports employee earnings and pays for unemployment insurance.
Unemployment here has since said that they will have to manually create, build, review, and calculate claims based on the financial information and forms they collected upon applying. They further explained the self employed will automatically be denied because we will not appear to be in the system and will show that we had any qualifying income.
Ultimately, we self employed folks should all qualify but since it is a manual process it will take a while. Just got to wait it out.
Nick Vermeil
Footballguy
Should be an interesting morning on the PPP application front. Our CFO and I are standing by with all supporting documents to apply. Will update as we work through it.
Sorry I'm not doing anything more than sharing links. But saw this too. https://apnews.com/9507bff13987b6d4f51a55a367baf7b6?utm_source=morning_brew
GoBirds
Footballguy
I’m preparing PPP to start, are the other option also forgivable I’ve heard conflicting info?
