Surly Thread of Business Owners/Managers, Etc. & Current Business Climate

[landman 559]

Abbott just issued an order allowing development and construction activities to continue statewide, overruling Adler.

[Reagan1k 3,026]

8 minutes ago, landman said:

Abbott just issued an order allowing development and construction activities to continue statewide, overruling Adler.

Hope you're right.  I have some buddies there sweating bullets right now; probably like a lot on this board are doing. 

Where did you see that reported?

[lonestar3 274]

Hearing the same thing from multiple sources. 

[Spaulding Smails 1,568]

https://www.fox26houston.com/news/governor-abbott-issues-essentials-services-order-for-texas

[Brew 3,049]

PPP application is out now, checklist out tomorrow. Word I’m getting from bank clients is that they expect the program to be tapped out by the first of the week and Congress will have to dig deeper at that point. People are going for the loans that probably don’t truly need them because they have the bank relationships while those that do are going to get left out. Talked to a bank this afternoon that knows of two large SBA qualified banks that do a lot of SBA work that are prepared to dump 1,000 applications each into the system Friday. It’s all going to come down to this certification of loss process.

[closetojumping 63,192]

3 minutes ago, Brew said:

PPP application is out now, checklist out tomorrow. Word I’m getting from bank clients is that they expect the program to be tapped out by the first of the week and Congress will have to dig deeper at that point. People are going for the loans that probably don’t truly need them because they have the bank relationships while those that do are going to get left out. Talked to a bank this afternoon that knows of two large SBA qualified banks that do a lot of SBA work that are prepared to dump 1,000 applications each into the system Friday. It’s all going to come down to this certification of loss process.

I get what you're saying, but how many of those kinds of SBA groups are out there right now? 

Either way, we're going to be pushing everything through on Friday morning ourselves. Hoping our banks are up to the task.

[G650 14,302]

1 hour ago, Brew said:

It’s all going to come down to this certification of loss process.

How the hell is that supposed to play out

[Brew 3,049]

1 hour ago, closetojumping said:

I get what you're saying, but how many of those kinds of SBA groups are out there right now? 

Either way, we're going to be pushing everything through on Friday morning ourselves. Hoping our banks are up to the task.

It doesn’t really matter how many of those groups there are, it only matters what the banks have wait listed so far. The ones I’ve talked to already have significant lists of applicants -and they are starting with their best relationships which are the same people that would survive without it. A lot of the guys that need it are going to be left with their hands out because they don’t have the relationships already. 

[Brew 3,049]

20 minutes ago, G650 said:

How the hell is that supposed to play out

It should have played out based on calculated need in some way or with a calculation based off some version of your taxable income year over year combined with personal financials. Make the loans and repayment based on year over year numbers and overall ability to weather the drop.

My most well off family client group is going to apply for probably close to $10M across a few entities. They will end up being down, but that’s the difference between a stupid good year and a good year. They have the bank relationship to be first in line at the bank Friday while a lot of others are still trying to get their hands around everything.

[Incredulity 11,695]

19 minutes ago, G650 said:

How the hell is that supposed to play out

I had a banker tell me today, “there isn’t any underwriting”.

I literally burst out laughing.

I don’t have any special insight, but I believe to my soul there is no way this goes over purely on a wink and a nod.  Motherfucking underwriters are going to underwrite no matter what the propaganda is.

There will be many thousand absolutely desperate business owners in a couple weeks, it’s going to get a lot worse.

[Brew 3,049]

2 minutes ago, Incredulity said:

I had a banker tell me today, “there isn’t any underwriting”.

I literally burst out laughing.

I don’t have any special insight, but I believe to my soul there is no way this goes over purely on a wink and a nod.  Motherfucking underwriters are going to underwrite no matter what the propaganda is.

There will be many thousand absolutely desperate business owners in a couple weeks, it’s going to get a lot worse.

It’s SBA backed. If they say 100% guaranteed and limited underwriting, the banks will let it flow through to maximize fee generation. They are about to make their years. The problem for them is they are tying their liquidity up for some period and may want it available when the world opens back up. 

[Incredulity 11,695]

2 minutes ago, Brew said:

It’s SBA backed. If they say 100% guaranteed and limited underwriting, the banks will let it flow through to maximize fee generation. They are about to make their years. The problem for them is they are tying their liquidity up for some period and may want it available when the world opens back up. 

I hear you.  I hope I am wrong.

I’ll stand by my prediction even if it’s banks preserving liquidity as the culprit.  I fully agree with your above posts regarding best clients getting this money.  It absolutely will not get to many very needy and probably decent companies.

[KeysPhoneWallet 807]

Can a person pay himself as a small business owner and have the loan be forgiven?

[G650 14,302]

32 minutes ago, Brew said:

It should have played out based on calculated need in some way or with a calculation based off some version of your taxable income year over year combined with personal financials. Make the loans and repayment based on year over year numbers and overall ability to weather the drop.

My most well off family client group is going to apply for probably close to $10M across a few entities. They will end up being down, but that’s the difference between a stupid good year and a good year. They have the bank relationship to be first in line at the bank Friday while a lot of others are still trying to get their hands around everything.

Yeah, I just haven't seen any mechanism so far. Personally, I've had a bunch of payments already held up because courthouses aren't recording and such. Around a million at this point. Could end up way higher, and might never see it. I'm one of my banks top clients so we have been in dialogue already, but I wonder how in the earth anyone determines our "need". If I never collect on say 2 or 3 million, then I say that's pretty needy. But I could collect down the road after the fact. There's no way to tell at this point.

[VABuckeye 2,472]

40 minutes ago, KeysPhoneWallet said:

Can a person pay himself as a small business owner and have the loan be forgiven?

If you’re under the 100k a year threshold plus allowable expenses yes.  If you can get the loan. 

[Wally Pryor 5,311]

Can forget trying to get the loan app done online Friday.  Everything is going to freeze up.   

May be best to opt for a trusted carrier pigeon.

[VABuckeye 2,472]

Quote

https://bankingjournal.aba.com/2020/03/guidelines-application-sba-paycheck-protection-program/

Honestly it looks like a rubber stamp loan. Talk to your bankers and get them in early Friday. 

Edited April 1, 2020 by VABuckeye

[Brew 3,049]

19 minutes ago, Wally Pryor said:

Can forget trying to get the loan app done online Friday.  Everything is going to freeze up.   

May be best to opt for a trusted carrier pigeon.

Loan app for PPP has to go through a bank.

Edited April 1, 2020 by Brew

[Brew 3,049]

57 minutes ago, G650 said:

Yeah, I just haven't seen any mechanism so far. Personally, I've had a bunch of payments already held up because courthouses aren't recording and such. Around a million at this point. Could end up way higher, and might never see it. I'm one of my banks top clients so we have been in dialogue already, but I wonder how in the earth anyone determines our "need". If I never collect on say 2 or 3 million, then I say that's pretty needy. But I could collect down the road after the fact. There's no way to tell at this point.

Depending on financial strength and overall revenue, it could also just suck rather than be a true need. Need is too arbitrary in this scenario. I can say factually I’m looking at being down $1.5M over 4 weeks. We were also on record pace to easily eclipse $30M, so without that revenue it’s going to suck. I also have a stupid amount of receivables and WIP out that will have some loss built in. However, I don’t know that we “need” it to survive. My partner group is taking a pay cut worst case and we may have to lay off a few people. I have other clients that have a true need for funds to stay open that probably aren’t going to get it. That’s not even touching on the point that our grandkids are probably going to be paying it off as we’ve already spent our kids money.

[po elvis 2,091]

They have a sample PPP application out...

https://www.sba.gov/sites/default/files/2020-03/Borrower Paycheck Protection Program Application_0.pdf

[Rudiger 1,178]

I haven’t seen it mentioned on this thread yet, but a lot of businesses (both large and small) have possible coverage under the business interruption and civil authority provisions of their commercial insurance policies that will cover lost business income due to the coronavirus and shelter in place orders.

It’s a complicated, policy- and locality-dependent issue, but feel free to PM me with questions. 

Edited April 1, 2020 by Rudiger

[Hagbard Celine 10,996]

1 hour ago, Brew said:

That’s not even touching on the point that our grandkids are probably going to be paying it off as we’ve already spent our kids money.

I'm actually optimistic on this point.  The way this virus burned through the rich, beautiful, famous and powerful, has been a wakeup to the 1%.  Diverting 10% of the killingry budget to livingry could fulfill Bucky Fuller's dying admonition that we have enough livingry on the planet for the entire population to enjoy an aerospace standard of living.  We have the power as a civilization to produce unlimited amounts of wealth when it's not hoarded for the few and locked up in banks.

[troph 24,929]

congress will refund.  if they don't we are talking bread lines level depression.

we will have ours and our clients in by friday though.

Edited April 1, 2020 by troph

[T’Boo Ted Marshall 2,741]

I never got an email confirm after I completed the EIDL app and kids closed out my tabs with the confirmation number.
Is there a way to look it up? Don’t see anything on the site.

[G650 14,302]

8 hours ago, Brew said:

Need is too arbitrary in this scenario.

This is what I'm trying to figure out. The whole criteria seems arbitrary.

[G650 14,302]

8 hours ago, troph said:

congress will refund.  if they don't we are talking bread lines level depression.

This is my thinking. I can't see any business getting left out.

[Iceman 2,805]

8 hours ago, Hagbard Celine said:

I'm actually optimistic on this point.  The way this virus burned through the rich, beautiful, famous and powerful, has been a wakeup to the 1%.  Diverting 10% of the killingry budget to livingry could fulfill Bucky Fuller's dying admonition that we have enough livingry on the planet for the entire population to enjoy an aerospace standard of living.  We have the power as a civilization to produce unlimited amounts of wealth when it's not hoarded for the few and locked up in banks.

producers tend to produce when there's a profit on the line...and thus, wealth.  Don't let that get in the way of your utopian ideas, however.

[VABuckeye 2,472]

Application is Out

ETA: Just spoke with PNC.  It's still a sample application.  The final application will be up on Friday.

Edited April 1, 2020 by VABuckeye

[Brew 3,049]

As far as I can tell, nothing on here says it is a sample.

https://home.treasury.gov/cares

I have not read all of it to see what it says, but the app is not marked sample. Loan checklist should be out today.

 

Edited April 1, 2020 by Brew

[VABuckeye 2,472]

My bank was told it may not be the final application.

PNC has updated their page.  There's a link for documentation that may be required.

PNC PPP Site

[Steamboat1874 4,153]

15 hours ago, landman said:

Abbott just issued an order allowing development and construction activities to continue statewide, overruling Adler.

Great idea.....let's see how long we can keep this virus active. 

[lonestar3 274]

7 minutes ago, Steamboat1874 said:

Great idea.....let's see how long we can keep this virus active. 

Be grateful for your job security. There were a few people I talked to yesterday who were worried about their jobs ending immediately if this didn't change this week. 

It's not a chartered trip to Cabo. It's essential work for dependent people without a ton of other options to feed their families. And it can be done responsibly. 

Edited April 1, 2020 by lonestar3

[Cheeseweasel 26,438]

7 minutes ago, Steamboat1874 said:

Great idea.....let's see how long we can keep this virus active. 

They are trying to wear it out! 4D chess!

[landman 559]

25 minutes ago, Steamboat1874 said:

Great idea.....let's see how long we can keep this virus active. 

We can subject ourselves to being around other people doing take out at restaurants and going to stores like Academy, but a guy can't drive a tractor or swing a hammer all day by himself?  That makes a lot of sense. 

The social interaction on jobsites is less than just about anywhere else.

[Cheeseweasel 26,438]

Re: Covered Utilities.

I assume this is water, electricity, phone/internet...what about garbage removal? Is there a place that outlines "covered utilities"?

[Steamboat1874 4,153]

18 minutes ago, landman said:

We can subject ourselves to being around other people doing take out at restaurants and going to stores like Academy, but a guy can't drive a tractor or swing a hammer all day by himself?  That makes a lot of sense. 

The social interaction on jobsites is less than just about anywhere else.

What about all of the suppliers?

Nothing has changed here at my warehouse except we have a few bottles of Purell around.

I am exposed to 40 or 50 different people a day that come into my office. They are field managers, drivers, assembly line workers working side by side and receiving people. They interact with truck drivers all day. No one knows who these people have been in contact with.

Keeping the guy swinging a hammer by himself is great but it is endangering thousands of other people as well.

This goes all of the way up the supply chain.

[blacklab 11,997]

57 minutes ago, Cheeseweasel said:

Re: Covered Utilities.

I assume this is water, electricity, phone/internet...what about garbage removal? Is there a place that outlines "covered utilities"?

Yes, garbage is specifically called out as essential in a couple of things I've seen.

[Spaulding Smails 1,568]

13 hours ago, Brew said:

Depending on financial strength and overall revenue, it could also just suck rather than be a true need. Need is too arbitrary in this scenario. I can say factually I’m looking at being down $1.5M over 4 weeks. We were also on record pace to easily eclipse $30M, so without that revenue it’s going to suck. I also have a stupid amount of receivables and WIP out that will have some loss built in. However, I don’t know that we “need” it to survive. My partner group is taking a pay cut worst case and we may have to lay off a few people. I have other clients that have a true need for funds to stay open that probably aren’t going to get it. That’s not even touching on the point that our grandkids are probably going to be paying it off as we’ve already spent our kids money.

This is very similar to our forecast and the pending implications.  As I said previously, we're in a good industry (construction / facility maintenance) with a good balance sheet and a strong backlog.  We had our largest month ever in February, and we were well on our way to $10M in revenue this year (30% YOY increase).  Even with Abbott re-opening construction yesterday, we're going to see a drop in production and revenue over the next few months.  Not to mention, I'm now forecasting a much lower than originally planned Q3 and Q4.  So, even if we're not feeling the pain to the magnitude and immediateness of other industries, this is going to leave a mark.  We don't "need" the SBA loan to survive, but we're damn sure going to try to take advantage of it.  If nothing else, it extends our runway several months to adjust our business model and keep a big chunk of our employees on the payroll that we would have otherwise had to consider laying off.  

[riloh05 107]

I dont see how this plays out...We have 10b in loan value in our database alone. We do not have 1/30 of the market with that available data. My guess is this runs out rather quickly and a lot of SMB expecting loans do not receive them.

I encourage you to also look at the ERC (employee retention credit) option. This is a less risky, fully funded option. One of our clients (18 employees) received $90k. For other businesses folks the PPP may have a bit more juice, but again more risk.

My point...look into the ERC as well.

[riloh05 107]

7 minutes ago, Spaulding Smails said:

This is very similar to our forecast and the pending implications.  As I said previously, we're in a good industry (construction / facility maintenance) with a good balance sheet and a strong backlog.  We had our largest month ever in February, and we were well on our way to $10M in revenue this year (30% YOY increase).  Even with Abbott re-opening construction yesterday, we're going to see a drop in production and revenue over the next few months.  Not to mention, I'm now forecasting a much lower than originally planned Q3 and Q4.  So, even if we're not feeling the pain to the magnitude and immediateness of other industries, this is going to leave a mark.  We don't "need" the SBA loan to survive, but we're damn sure going to try to take advantage of it.  If nothing else, it extends our runway several months to adjust our business model and keep a big chunk of our employees on the payroll that we would have otherwise had to consider laying off.  

You may be better off with the ERC. We are doing a webinar on Monday PPP vs ERC. Let me know if that interest you.

[Cheeseweasel 26,438]

6 minutes ago, riloh05 said:

You may be better off with the ERC. We are doing a webinar on Monday PPP vs ERC. Let me know if that interest you.

Can you give us a quick overview?

[riloh05 107]

3 minutes ago, Cheeseweasel said:

Can you give us a quick overview?

tbh...not my lane/side of the house. What we are discovering/uncovering is that PPP/ERC works for business differently- one is better than the other and vice versus. Each business is their own thumbprint so its hard to drill down one specific overview. There is an abundance of if/then's. I hate to be so vague as the importance to digest pertinent information is priority 1. Best I can offer/help is the webinar and let the experts speak, then field a Q&A.

[G650 14,302]

One of my bankers has pulled in the retail/commercial side of their operation as it looks like they are handling the SBA stuff. Supposedly a meeting at noon today and then will have an update. Definitely still a fluid situation.

[victory88 5,676]

so did anyone else receive the EIDL 10k advance within 3 days?  I applied Monday morning.  Lets see if this hits the bank account on Friday.

[Wally Pryor 5,311]

Can't see how things will be ready to accept PPP apps on Friday. 

[riloh05 107]

Some additional clarification on PPP vs ERC. If you are paying employees, but they are not working...Look into ERC.

dentist offices, Doctors offices, bars, restaurants, manufacturing companies, etc...are the ones that we are seeing significant ERC benefits for.

[Brew 3,049]

20 minutes ago, riloh05 said:

Some additional clarification on PPP vs ERC. If you are paying employees, but they are not working...Look into ERC.

dentist offices, Doctors offices, bars, restaurants, manufacturing companies, etc...are the ones that we are seeing significant ERC benefits for.

The ERC would only be more beneficial than the PPP if there is an expectation that businesses will still be closed 2+ months from now. At that point you should have just processed layoffs.

[closetojumping 63,192]

2 hours ago, victory88 said:

so did anyone else receive the EIDL 10k advance within 3 days?  I applied Monday morning.  Lets see if this hits the bank account on Friday.

If there is a rubber stamp in all of this, it is this one. It's not hard to automate a mass payout if the funds are there. Those that didn't enter a valid EIN and valid banking info will probably be screwed, but I am guessing everyone else will simply get it and have some sort of checked box against their EIN within the SBA data. Maybe I'm being hopeful, but I read comments in an article from an agency spokesperson yesterday that were pretty much "yep, we're ready to give the grant advances out to anyone that signs up with valid information" or something akin to it.

[closetojumping 63,192]

15 hours ago, Rudiger said:

I haven’t seen it mentioned on this thread yet, but a lot of businesses (both large and small) have possible coverage under the business interruption and civil authority provisions of their commercial insurance policies that will cover lost business income due to the coronavirus and shelter in place orders.

It’s a complicated, policy- and locality-dependent issue, but feel free to PM me with questions. 

We looked into this route and the insurance company basically just said "yeah, people can file that, but good luck getting it". Is this not the overall insurance industries position on this?

[riloh05 107]

2 minutes ago, Brew said:

The ERC would only be more beneficial than the PPP if there is an expectation that businesses will still be closed 2+ months from now. At that point you should have just processed layoffs.

Also when PPP runs out of funds the ERC will still be an option. If the need for cash now PPP is the best bet, but not promised and that will be an issue.