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

[Player 4,578]

That’s claims adjusting 101.

Deny, deny, deny.

[Rudiger 1,178]

4 minutes ago, closetojumping said:

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?

That's going to be their position, and frankly they're putting out counterfactual propaganda on the issue, but as a general proposition it's incorrect. Most businesses will have strong claims for business interruption/civil authority coverage so long as they don't have specific virus exclusions.

[ballrific 215]

apologize if already asked but what if a business applies for the EIDL and requests/checks the box for the $10,000 advance/grant.  They receive the advance/grant and also end up getting approved for the loan, then realize the grant is enough to float them for 8 weeks and have no need for the EIDL. 

Are they obligated to take/sign the loan?    Is there actually anything to sign or are they locked in once approved?

I would assume businesses can't decline the loan after receiving the advance or otherwise many of them would just opt for the $10k grant? 

[closetojumping 63,670]

1 hour ago, Rudiger said:

That's going to be their position, and frankly they're putting out counterfactual propaganda on the issue, but as a general proposition it's incorrect. Most businesses will have strong claims for business interruption/civil authority coverage so long as they don't have specific virus exclusions.

Thanks for this. We'll review the docs and test it out. This would not preclude getting the loans in place from the government, would it?

2 minutes ago, ballrific said:

apologize if already asked but what if a business applies for the EIDL and requests/checks the box for the $10,000 advance/grant.  They receive the advance/grant and also end up getting approved for the loan, then realize the grant is enough to float them for 8 weeks and have no need for the EIDL. 

Are they obligated to take/sign the loan?    Is there actually anything to sign or are they locked in once approved?

I would assume businesses can't decline the loan after receiving the advance or otherwise many of them would just opt for the $10k grant? 

You could always just not pursue the remaining loan further, or ask for the offered and agreed upon amount to be the $10k total. 

One of the things that seems to be happening is that the SBA is focusing efforts on getting the PPP done and will get back to EIDL processes later. I say that because the companies I've worked with on the filings haven't heard anything yet, and some filed on Sunday. I'm guessing the EIDL piece will be a slow burn, outside of the $10k advance component. Hope I'm wrong, but it makes sense and seems like it so far with the inactivity.

[closetojumping 63,670]

The guidance we're being given today, now that the actual specifics are being published, is that the salary numbers can include up to $100k annualized in salary, and then the burden and benefits roll on top of that, and then the calculation of all of that is multiplied by 2.5 to get to the number. Previously, everyone was assuming that payroll + burden and benefits for the employee couldn't exceed the annualized $100k. It's a good break. The 2 year payoff period sucks, but by our math, we're better off pushing for the full amount and handling the payoff anyway, given the uncertainties of when things come back.

One thing also being thrown around in the circles I'm reading emails and texts and summaries is that those who take PPP and then fail to pay once the loan kicks in will be who the government starts to immediately target for fraud. Entities making regular payments back to the government are going to be far less likely to ever have any real surveillance into their books in the aftermath. This would help explain some of the rubberstamping nature we're all hearing about or seeing. Get the liquidity back into the businesses' hands asap, then the potential thieves that were normally filtered through compliance, PGs, and collateral requirements will reveal themselves in the aftermath due to non-payment.

Also, most business people do not want to have to explain to new lenders, investors, or various other entities like insurance entities, regulatory authorities, etc., why they have a record of defaulting on a federal government loan. 

[Rudiger 1,178]

25 minutes ago, closetojumping said:

Thanks for this. We'll review the docs and test it out. This would not preclude getting the loans in place from the government, would it?

I've been considering that question. Having not digested the Paycheck Protection Program, I can't say for sure. But unless there's an express provision that prohibits it (which would shock me), I can't see why it would affect your ability to use insurance and the program.

[Brew 3,049]

I have not had a single client that got anywhere positive with their insurance company. All policies had exclusions built in.

[Rudiger 1,178]

10 minutes ago, Brew said:

I have not had a single client that got anywhere positive with their insurance company. All policies had exclusions built in.

What were the exclusions? 

Insurers are going to deny coverage across the board because paying the claims will cripple them--there are simply too many to do anything else. That doesn't mean the claims aren't valid.

[Dbeasy 15,264]

I spoke with my insurance industry buddy and basically all insurance companies will just take it all into the the court systems if necessary because otherwise it would destroy the insurance companies themselves.

[MissingInAction 25,330]

Square bidness still reppin in da hood.

[troph 24,929]

I have not had a single client that got anywhere positive with their insurance company. All policies had exclusions built in.

Same. Not one single one. We have one very aggressive litigation firm looking at a few policies on a short short leash and I told the clients to expect a bad answer. That said there may be a bust through on these I dunno and if so it will be the plaintiffs bar on massive contingencies for a class action or something.

[troph 24,929]

Crazy day. We ended up with about 20-25 applications in today. I made a few introductions but bank switching is hard. I had to call in favors to an extent. Crazy how the banks are different but they are coming around to a customer centric get it done approach. I’ve still got laggards for banks (clients begging for intros to easy deals (not easy banks)) and some banks acting like it’s a standard loan. I’m not going to name names but a prominent bank just blew it on a call today. If that guy was really on script one of the highly reputable banks out there is just bombing this completely. Some others still wanting to do full underwriting. Come on. The feds are saying get this money out there now. Their own application is a complete joke. Read the messages. Someone earlier told me it would be easy, the statute said so. They were right it’s supposed to be. In the end though it’s like a baseball game. We know there are balls and strikes but you don’t know if a pitch is a ball or strike until the ump calls it. Your bank is the ump here. Hope you picked a good bank when the times were good.

[troph 24,929]

You could always just not pursue the remaining loan further, or ask for the offered and agreed upon amount to be the $10k total. 
One of the things that seems to be happening is that the SBA is focusing efforts on getting the PPP done and will get back to EIDL processes later. I say that because the companies I've worked with on the filings haven't heard anything yet, and some filed on Sunday. I'm guessing the EIDL piece will be a slow burn, outside of the $10k advance component. Hope I'm wrong, but it makes sense and seems like it so far with the inactivity.

I know folks who applied weeks ago still nothing. It’s not well funded for this.

[Brew 3,049]

37 minutes ago, troph said:

Crazy day. We ended up with about 20-25 applications in today. I made a few introductions but bank switching is hard. I had to call in favors to an extent. Crazy how the banks are different but they are coming around to a customer centric get it done approach. I’ve still got laggards for banks (clients begging for intros to easy deals (not easy banks)) and some banks acting like it’s a standard loan. I’m not going to name names but a prominent bank just blew it on a call today. If that guy was really on script one of the highly reputable banks out there is just bombing this completely. Some others still wanting to do full underwriting. Come on. The feds are saying get this money out there now. Their own application is a complete joke. Read the messages. Someone earlier told me it would be easy, the statute said so. They were right it’s supposed to be. In the end though it’s like a baseball game. We know there are balls and strikes but you don’t know if a pitch is a ball or strike until the ump calls it. Your bank is the ump here. Hope you picked a good bank when the times were good.

A lot of banks got funny about it today after the SBA rolled out the .5% interest rate for 2 years. Banks thought they would get a decent rate structure and that just disappeared. Now they risk tying up liquidity on the non forgiven portion for nothing. They can pull a fee on the front, but past that it a crapshoot. We had several banks pull out this morning unless it was a strong relationship.

[milkman 428]

I have been back and forth with my banker today about the PPP loan. Got everything submitted and they are trying to figure out how we are supposed to document company paid health insurance. What is everyone else doing in this regard?


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[ousuxndallas 65]

I have been back and forth with my banker today about the PPP loan. Got everything submitted and they are trying to figure out how we are supposed to document company paid health insurance. What is everyone else doing in this regard?


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Payroll reports should show that. Then you can check it against the statement from the health insurance provider.

[milkman 428]

Payroll reports should show that. Then you can check it against the statement from the health insurance provider.

This is probably something I screwed up on. We pay 100% of the employees health insurance. Guess I didn’t figure we needed to document on a payroll stub since it’s 100% company funded.


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[troph 24,929]

A lot of banks got funny about it today after the SBA rolled out the .5% interest rate for 2 years. Banks thought they would get a decent rate structure and that just disappeared. Now they risk tying up liquidity on the non forgiven portion for nothing. They can pull a fee on the front, but past that it a crapshoot. We had several banks pull out this morning unless it was a strong relationship.

That’s good analysis. I’ve got one more client to place. We are closing our window for heavy involvement this week unless an existing client, but I don’t expect any, we pushed hard starting when the senate dems and republicans started talking, same deal no new clients. By end of next week I think the good pickings are gone. Maybe I’m wrong.

[Brew 3,049]

58 minutes ago, milkman said:

This is probably something I screwed up on. We pay 100% of the employees health insurance. Guess I didn’t figure we needed to document on a payroll stub since it’s 100% company funded.


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W-2’s should show the value of company provided health insurance in box 12 post Obamacare. There may be a size exception that I’m not thinking of just for the record. I would get your agent to send you your payment records.

[Incredulity 11,733]

2 hours ago, troph said:

Crazy day. We ended up with about 20-25 applications in today. I made a few introductions but bank switching is hard. I had to call in favors to an extent. Crazy how the banks are different but they are coming around to a customer centric get it done approach. I’ve still got laggards for banks (clients begging for intros to easy deals (not easy banks)) and some banks acting like it’s a standard loan. I’m not going to name names but a prominent bank just blew it on a call today. If that guy was really on script one of the highly reputable banks out there is just bombing this completely. Some others still wanting to do full underwriting. Come on. The feds are saying get this money out there now. Their own application is a complete joke. Read the messages. Someone earlier told me it would be easy, the statute said so. They were right it’s supposed to be. In the end though it’s like a baseball game. We know there are balls and strikes but you don’t know if a pitch is a ball or strike until the ump calls it. Your bank is the ump here. Hope you picked a good bank when the times were good.

This shit right here is exactly what I was talking about.  

[Brew 3,049]

46 minutes ago, troph said:

That’s good analysis. I’ve got one more client to place. We are closing our window for heavy involvement this week unless an existing client, but I don’t expect any, we pushed hard starting when the senate dems and republicans started talking, same deal no new clients. By end of next week I think the good pickings are gone. Maybe I’m wrong.

We’ll finish up tomorrow and then handle some random filings next week as well as those that are self employed. I bet one office of mine has worked with clients on $30M or more in filings. That doesn’t cover my other offices which just adds to that. The numbers are going to be staggering. We are only working with good clients and most of them already have solid bank relationships. Several had to scramble today after their banks pulled out, but we had other banks that stepped in once we showed that the clients would be 85%+ forgivable assuming life restarts in the next 60 days. 

In 20 years I’ve never seen another week comparable to this one. We’re doing the work pro bono for most of our clients as a good faith gesture during this time. When I got home tonight I checked my different contact methods for the day. I had over 300 legitimate emails, 50+ calls on my cell, another 15 or so on my office phone, and 20+ separate text strings at 7:30. Nothing after that is included.The numbers on all of those were probably higher yesterday.
 

[UT_OB1 2,229]

Brew / troph - can I ask what it is y’all do?  Are you accountants?  

[Hagbard Celine 11,021]

5 hours ago, Dbeasy said:

I spoke with my insurance industry buddy and basically all insurance companies will just take it all into the the court systems if necessary because otherwise it would destroy the insurance companies themselves.

So going forward, why would any business buy business insurance if it's worthless?  What *does* it cover?

[Brew 3,049]

5 minutes ago, UT_OB1 said:

Brew / troph - can I ask what it is y’all do?  Are you accountants?  

Me - managing partner of a multi office regional accounting firm. I’m pretty sure Troph is an attorney.

[Hagbard Celine 11,021]

11 minutes ago, UT_OB1 said:

Brew / troph - can I ask what it is y’all do?  Are you accountants?  

Whatever he does he's a hero.

[troph 24,929]

We’ll finish up tomorrow and then handle some random filings next week as well as those that are self employed. I bet one office of mine has worked with clients on $30M or more in filings. That doesn’t cover my other offices which just adds to that. The numbers are going to be staggering. We are only working with good clients and most of them already have solid bank relationships. Several had to scramble today after their banks pulled out, but we had other banks that stepped in once we showed that the clients would be 85%+ forgivable assuming life restarts in the next 60 days. 
In 20 years I’ve never seen another week comparable to this one. We’re doing the work pro bono for most of our clients as a good faith gesture during this time. When I got home tonight I checked my different contact methods for the day. I had over 300 legitimate emails, 50+ calls on my cell, another 15 or so on my office phone, and 20+ separate text strings at 7:30. Nothing after that is included.The numbers on all of those were probably higher yesterday.
 

I’m with you, 20 years nothing like this. We moved 3-4 clients to new banks. All of ours were in good relationships too. We didn’t do your volume but we probably worked with clients on 20-25 deals and probably ended up over $10m. A couple more tomorrow and then I’m going to collapse into the weekend. 6:30a-11p or midnight the last two nights. I gave that kinda work schedule up a decade ago.

[UT_OB1 2,229]

5 minutes ago, Brew said:

Me - managing partner of a multi office regional accounting firm. I’m pretty sure Troph is an attorney.

Thanks. Was just generally wondering since it sounded like y’all were helping clients navigate the loan process. Based on my conversations with the banks so far, if you’re giving useful advice you couldn’t have been in banking. 

[troph 24,929]

corporate attorney mostly.

[Incredulity 11,733]

7 minutes ago, Hagbard Celine said:

So going forward, why would any business buy business insurance if it's worthless?  What *does* it cover?

 

[troph 24,929]

Thanks. Was just generally wondering since it sounded like y’all were helping clients navigate the loan process. Based on my conversations with the banks so far, if you’re giving useful advice you couldn’t have been in banking. 

That’s pretty funny. I had a banker mansplain to me the law for 20 mins uninterrupted with my client on the phone. I was reading the senate bill over a week ago, and we’ve been building models with our clients to manage the forgiveness piece and layoffs or reductions in pay on this since the senate passed it. Banker today was telling us how little was really known, not a lot of answers. He was full of shit. They won’t be ready to take apps until Monday at the earliest. Needless to say our client bailed on that bank.

[Brew 3,049]

I had a banker today criticize some material we rolled out to our client base. I went around in circles with him and finally just copy/pasted the Senate Bill verbiage exactly on an email to him. He still argued that we were wrong. Overall, bankers are getting very little guidance right now and they are dealing with the same moving targets. It’s also an unfair position to put them in to tell them to start making loans on Friday like they are giving away free money. It goes against everything that regulators have beat into them over the last 10-12 years. Everyone else is getting a peak into the garbage that Congress puts out now.

[closetojumping 63,670]

We had a bank this evening give us overreaching questions that have nothing to do with this situation or what the SBA is asking. They’re small and attentive and our relationship is new. My ops and finance leads got purposefully aggressive and the guy on the other side wilted and came back with more favorable “needs” for analyzing the loan. 

My view is that smaller banks will work better for most folks in this situation but you need to have known them, or have someone who knows them, ahead of this. We’ve got so many entities working things with various banks that we’re seeing many angles. I don’t know all of the answers or anything close to it yet, but I do know that Wells Fargo continues to be a worthless piece of shit firm. Multiple entities have tried to use them this week, to no avail, and I’ve connected those folks to better focused banks. That was with no agenda, as I and others hoped not to have that extra variable considered when trying to land this shit.

If someone has a good Houston or Austin to rec, say it here or dm me, as we’re still searching for answers and don’t want to consolidate too much with anyone since we don’t trust any of them. As a conscious capitalist, I don’t trust banks to do the right thing, ever.  They ruin the premise of doing the right thing inherently.

Based on history books, the Great Recession, and personal experiences, I’ve always said to myself that it is paramount to have good lawyers, accountants, operators, politicians and policemen within reach. Now it is clear that bankers need to make the list. Holy shit. 

[UT_OB1 2,229]

I was just trying to look in to getting an 7a loan (not PPP).  I was on the phone with some lady from WF this morning, and she was giving me the same line about not having any info. She said I had to go to SBA.gov/disaster to apply for loan. 

[Iceman 2,820]

9 hours ago, Rudiger said:

What were the exclusions? 

 

The policy holders haven't died yet.

[deadshank 24,653]

Spoke at length about PPP with my long-time Amegy Bank officer.

He's a genuine guy and a personal friend so he'll give me the straight story.

Straight story: nobody has a clue, including the SBA.  No guidance, no needs testing, no qualifiers, no docco check list. Nothing but a sample form. 

We did agree that it would be a good idea to have a side account for any monies received from this program.  The side account would quarantine the money in case the SBA comes back around and wants to ask questions about how the money was spent. 

[milkman 428]

Spoke at length about PPP with my long-time Amegy Bank officer.
He's a genuine guy and a personal friend so he'll give me the straight story.
Straight story: nobody has a clue, including the SBA.  No guidance, no needs testing, no qualifiers, no docco check list. Nothing but a sample form. 
We did agree that it would be a good idea to have a side account for any monies received from this program.  The side account would quarantine the money in case the SBA comes back around and wants to ask questions about how the money was spent. 

Also, we believe that it will be CRITICAL to your future request for debt FORGIVENESS of the PPP loan to open a NEW CHECKING ACCOUNT for this program. You need to have the loan proceeds deposited into this account and PAY OUT ALL ELIGIBLE EXPENSES from this account. This will allow a clear path to show evidence that the loan proceeds were used for those expenses that are eligible for debt forgiveness, which we know you’ll need to demonstrate.


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[Cheeseweasel 26,438]

10 hours ago, troph said:

Hope you picked a good bank when the times were good.

This.

We always bank local for just this reason. I want to know the people we partner with in good times and bad.

[Cheeseweasel 26,438]

11 minutes ago, milkman said:

Also, we believe that it will be CRITICAL to your future request for debt FORGIVENESS of the PPP loan to open a NEW CHECKING ACCOUNT for this program. You need to have the loan proceeds deposited into this account and PAY OUT ALL ELIGIBLE EXPENSES from this account. This will allow a clear path to show evidence that the loan proceeds were used for those expenses that are eligible for debt forgiveness, which we know you’ll need to demonstrate.
 

We discussed this yesterday in our office. The problem is that many of our payments are direct withdrawls (Payroll, gas, electricity). What's your thought on putting the loan money in a bank account, paying the bills from the standard account and reimbursing from the "new" account? Seems like the best of both worlds to us. Thoughts?

[milkman 428]

6 minutes ago, Cheeseweasel said:

We discussed this yesterday in our office. The problem is that many of our payments are direct withdrawls (Payroll, gas, electricity). What's your thought on putting the loan money in a bank account, paying the bills from the standard account and reimbursing from the "new" account? Seems like the best of both worlds to us. Thoughts?

Above was what my banker sent out yesterday.  I'm in the same boat and have direct withdrawals coming out of my account.  I'm guessing we will either need to write checks for payroll or change the account that is being used to make these payments.  

Edited April 2, 2020 by milkman

[deadshank 24,653]

34 minutes ago, milkman said:

Also, we believe that it will be CRITICAL to your future request for debt FORGIVENESS of the PPP loan to open a NEW CHECKING ACCOUNT for this program. You need to have the loan proceeds deposited into this account and PAY OUT ALL ELIGIBLE EXPENSES from this account. This will allow a clear path to show evidence that the loan proceeds were used for those expenses that are eligible for debt forgiveness, which we know you’ll need to demonstrate.


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I guess I should work at the SBA

Edited April 2, 2020 by deadshank
Or at your bank

[deadshank 24,653]

23 minutes ago, Cheeseweasel said:

This.

We always bank local for just this reason. I want to know the people we partner with in good times and bad.

You don't partner with banks.  You pick the least worst and guard your cornhole. 

[Brew 3,049]

7 hours ago, UT_OB1 said:

I was just trying to look in to getting an 7a loan (not PPP).  I was on the phone with some lady from WF this morning, and she was giving me the same line about not having any info. She said I had to go to SBA.gov/disaster to apply for loan. 

Community banks or prior SBA approved banks are the way to go.

[Brew 3,049]

36 minutes ago, milkman said:

Also, we believe that it will be CRITICAL to your future request for debt FORGIVENESS of the PPP loan to open a NEW CHECKING ACCOUNT for this program. You need to have the loan proceeds deposited into this account and PAY OUT ALL ELIGIBLE EXPENSES from this account. This will allow a clear path to show evidence that the loan proceeds were used for those expenses that are eligible for debt forgiveness, which we know you’ll need to demonstrate.


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I can’t see how this is going to matter. Forgiveness is a simple calculation based on the payroll, utilities, rent, and interest paid over the subsequent 8 weeks multiplied times the FTE calculation. I don’t think it is a bad idea, I’m just not certain where it makes a difference in forgiveness.

[deadshank 24,653]

Just now, Brew said:

I can’t see how this is going to matter. Forgiveness is a simple calculation based on the payroll, utilities, rent, and interest paid over the subsequent 8 weeks multiplied times the FTE calculation. I don’t think it is a bad idea, I’m just not certain where it makes a difference in forgiveness.

Protect against potential fraud claims and ease of proving proper stewardship of funds received. 

[ousuxndallas 65]

I can’t see how this is going to matter. Forgiveness is a simple calculation based on the payroll, utilities, rent, and interest paid over the subsequent 8 weeks multiplied times the FTE calculation. I don’t think it is a bad idea, I’m just not certain where it makes a difference in forgiveness.

Agree. If you can provide good reporting and payroll statements, rent payment proof, etc that shouldn't be a problem.

Separate bank acct seems a bit like a belt and suspenders to me.

[riloh05 107]

I think some expectations of actually receiving the loan funds need to be tempered. One of our banking partners anticipates 450b in loan apps Friday. This is a branch of a regional bank in a town of 75,000 people.

This is sobering, shocking, and woefully underfunded. Best of luck to you all.

[G650 14,305]

Dont you guys already have a separate payroll account?

[Cheeseweasel 26,438]

Just now, G650 said:

Dont you guys already have a separate payroll account?

No, but we use a third party to handle payroll. 

[troph 24,929]

Also, we believe that it will be CRITICAL to your future request for debt FORGIVENESS of the PPP loan to open a NEW CHECKING ACCOUNT for this program. You need to have the loan proceeds deposited into this account and PAY OUT ALL ELIGIBLE EXPENSES from this account. This will allow a clear path to show evidence that the loan proceeds were used for those expenses that are eligible for debt forgiveness, which we know you’ll need to demonstrate.


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Money is fungible. This shouldn’t matter as long as you have the eligible expenses, receive the money and spend any money on those expenses. I’ve seen no evidence of hyper-tracing of funds required. I’m with brew on this.

[closetojumping 63,670]

54 minutes ago, riloh05 said:

I think some expectations of actually receiving the loan funds need to be tempered. One of our banking partners anticipates 450b in loan apps Friday. This is a branch of a regional bank in a town of 75,000 people.

This is sobering, shocking, and woefully underfunded. Best of luck to you all.

January + February 2020 payrolls for the 30.2 million small businesses was $350billion. The number for funding the PPP was not coincidental. So, yeah, there aren’t $450billion in PPP requests lined up already. That’s dumb banker gossip and they don’t understand math or human behavior. 

Could it one day be underfunded by $100 billion? Sure. Day 1? No.