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

VABuckeye

By VABuckeye
in Business and Markets

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Spaulding Smails
Spaulding Smails

Subscribed.  I've posted in two of the other threads, but I have a construction (residential and commercial) and facility maintenance company in Austin.  65 employees currently.  80% of my workforce c

MaclovioBrown
MaclovioBrown

CaboWabo and I run a small bank in South Texas with low workload on PPP approvals. PM if stuck in big bank queue and at risk of missing first tranche of funding. We can get you an SBA loan number in a

VABuckeye
VABuckeye

Bam! We were just awarded the Federal Reserve project we bid back in February.

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RollLeft

RollLeft 5045

Posted
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If some of you need to access to your own capital per Cares Act:

Each person can withdraw up to 100k from any of their retirement accounts free of tax, penalties and interest so long as you pay back in 3 years.

or 

Each person can borrow from their solo 401k up to 100k and you get 1 year deferral from payments and from last day of deferral 5 years to make quarterly payments.    

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landman

landman 559

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On 4/7/2020 at 11:46 AM, landman said:

My banker is telling me they still don't have the note language from the SBA yet.  Anyone else heard this?

Application approved yesterday afternoon.  Just need the SBA language now.  Not sure how some are getting money if the language hasn't been issued yet.

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Reagan1k

Reagan1k 3024

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55 minutes ago, RollLeft said:

If some of you need to access to your own capital per Cares Act:

Each person can withdraw up to 100k from any of their retirement accounts free of tax, penalties and interest so long as you pay back in 3 years.

or 

Each person can borrow from their solo 401k up to 100k and you get 1 year deferral from payments and from last day of deferral 5 years to make quarterly payments.    

I think there are some restrictions - you have to be a qualified person (diagnosed, spouse or dependent diagnosed) or loss of employment / furlough, lack of childcare requiring unpaid time off, etc.  We are still working and none of my people are sick (yet) so currently no one in my group is "qualified", so it hasn't come up thus far.

 A coronavirus-related distributions. is defined as any distribution from an eligible retirement plan or IRA made on or after January 1, 2020 and before December 31, 2020, to an individual (“Qualified Individual”):
• Who is diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention, or whose spouse or dependent has been so diagnosed; or
• An individual who experiences adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Secretary of the Treasury (or the Secretary’s delegate).

 

 

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Brew

Brew 3049

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Got approval this morning, told we would be funded by Monday at the latest. Updated info from SBA told banks to use their own documents or SBA documents and funding was a max 10 days from approval. From upload to approval was less than 2 hours this morning. That is on a roughly $3M loan. Our other entities went through in the same time frame.

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dirtonia

dirtonia 269

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Mandatory PTO was announced for us yesterday.  I have to take 10 PTO days by May 15th.  Guess I just won’t feel bad about day drinking on those days.  I’m sure I’ll still be on calls, because what the hell else am I going to do.  

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VABuckeye

VABuckeye 2472

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32 minutes ago, Brew said:

Got approval this morning, told we would be funded by Monday at the latest. Updated info from SBA told banks to use their own documents or SBA documents and funding was a max 10 days from approval. From upload to approval was less than 2 hours this morning. That is on a roughly $3M loan. Our other entities went through in the same time frame.

Grats on the approvals.  I still have a feeling that banks are cherry picking the loans they want to get through the process first.  If they leave the truly small businesses holding the bag on this I see the potential for many lawsuits coming up and many, many small businesses closing their doors for good.

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Chewbacca

Chewbacca 7787

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Grats on the approvals.  I still have a feeling that banks are cherry picking the loans they want to get through the process first.  If they leave the truly small businesses holding the bag on this I see the potential for many lawsuits coming up and many, many small businesses closing their doors for good.
I think you are correct on the cherry picking. I got uploaded last night, but am still waiting on approval. We applied Friday.
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Wally Pryor

Wally Pryor 5263

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1 hour ago, Brew said:

Got approval this morning, told we would be funded by Monday at the latest. Updated info from SBA told banks to use their own documents or SBA documents and funding was a max 10 days from approval. From upload to approval was less than 2 hours this morning. That is on a roughly $3M loan. Our other entities went through in the same time frame.

We got our loan # yesterday but I'd be shocked if funding occurs within the next few business days. 

Hope I'm wrong. 

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ousuxndallas

ousuxndallas 65

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The Federal Reserve is stepping in with some lending.  Highlights:

 

The federal government continues to provide crucial support to help small businesses survive the challenges created by the COVID-19 crisis. Today, the Federal Reserve announced a comprehensive $600 billion Main Street Lending Program, which is specifically designed to support small and medium-sized businesses.  Importantly, participation in the Paycheck Protection Program does not limit your participation in the Main Street Lending Program.
 
Eligible businesses:

  • Up to 10,000 employees OR
  • 2019 revenue less than $2.5 billion

Loan features: 

  • Unsecured term loan
  • 4-year maturity
  • Amortization of principal and interest deferred for one year
  • Adjustable rate of SOFR + 250-400 basis points
  • Minimum loan size: $1 million
  • Maximum loan size: the lesser of (i) $25 million or (ii) an amount that, when added to the Eligible Borrower’s existing outstanding and committed but undrawn debt, does not exceed four times the Eligible Borrower’s 2019 earnings before interest, taxes, depreciation, and amortization (“EBITDA”)
  • Prepayment permitted without penalty

This Federal Reserve link includes information about the program.
 
Currently, we believe the most efficient way to access the Main Street Lending Program is to contact your local lender or existing banking relationships.

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T’Boo Ted Marshall

T’Boo Ted Marshall 2740

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28 minutes ago, ousuxndallas said:

The Federal Reserve is stepping in with some lending.  Highlights:

 

The federal government continues to provide crucial support to help small businesses survive the challenges created by the COVID-19 crisis. Today, the Federal Reserve announced a comprehensive $600 billion Main Street Lending Program, which is specifically designed to support small and medium-sized businesses.  Importantly, participation in the Paycheck Protection Program does not limit your participation in the Main Street Lending Program.
 
Eligible businesses:

  • Up to 10,000 employees OR
  • 2019 revenue less than $2.5 billion

Loan features: 

  • Unsecured term loan
  • 4-year maturity
  • Amortization of principal and interest deferred for one year
  • Adjustable rate of SOFR + 250-400 basis points
  • Minimum loan size: $1 million
  • Maximum loan size: the lesser of (i) $25 million or (ii) an amount that, when added to the Eligible Borrower’s existing outstanding and committed but undrawn debt, does not exceed four times the Eligible Borrower’s 2019 earnings before interest, taxes, depreciation, and amortization (“EBITDA”)
  • Prepayment permitted without penalty

This Federal Reserve link includes information about the program.
 
Currently, we believe the most efficient way to access the Main Street Lending Program is to contact your local lender or existing banking relationships.

Up to 10K employees and revenues up to $2.5B doesn't describe many small  to medium sized businesses I know.  

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Cheeseweasel

Cheeseweasel 26438

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1 hour ago, dirtonia said:

Mandatory PTO was announced for us yesterday.  I have to take 10 PTO days by May 15th.  Guess I just won’t feel bad about day drinking on those days.  I’m sure I’ll still be on calls, because what the hell else am I going to do.  

Sorry man. FWIW, it's illegal to work when you are on PTO. Your either putting your employer at risk by working, or (if they are forcing you to work) they are putting themselves at risk.

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MaclovioBrown

MaclovioBrown 100

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CaboWabo and I run a small bank in South Texas with low workload on PPP approvals. PM if stuck in big bank queue and at risk of missing first tranche of funding. We can get you an SBA loan number in a day. Actual funding will take up to 10 days depending on when the SBA workload lightens up enough to affirm guidance on guarantees. 

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Chewbacca

Chewbacca 7787

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CaboWabo and I run a small bank in South Texas with low workload on PPP approvals. PM if stuck in big bank queue and at risk of missing first tranche of funding. We can get you an SBA loan number in a day. Actual funding will take up to 10 days depending on when the SBA workload lightens up enough to affirm guidance on guarantees. 
Guarantees? There ain't none of those on this program.
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MaclovioBrown

MaclovioBrown 100

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14 minutes ago, Chewbacca said:
3 hours ago, MaclovioBrown said:
CaboWabo and I run a small bank in South Texas with low workload on PPP approvals. PM if stuck in big bank queue and at risk of missing first tranche of funding. We can get you an SBA loan number in a day. Actual funding will take up to 10 days depending on when the SBA workload lightens up enough to affirm guidance on guarantees. 

Guarantees? There ain't none of those on this program.

100% to the banks otherwise we wouldn’t touch them. This is also why majority of banks haven’t actually disbursed a penny. Frost has $2B in approvals and $0 funded last I heard. 

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Chewbacca

Chewbacca 7787

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Got confirmation that 4 entities I’m involved with received loan numbers from the SBA tonight. Great news. God bless the smaller banks. Working with a few entities that are attempting to file through Chase and WF and they don’t know shit yet. 
Good luck, guys. 
I got my approval a few minutes ago. SBA number to follow shortly.
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Incredulity

Incredulity 11683

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9 hours ago, T’Boo Ted Marshall said:

Up to 10K employees and revenues up to $2.5B doesn't describe many small  to medium sized businesses I know.  

It’s for the middle market.  Not big enough to float paper, but too big for PPP.  500 employees may not be small business, but it sure as fuck isn’t big business.

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troph

troph 24912

Posted
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Got confirmation that 4 entities I’m involved with received loan numbers from the SBA tonight. Great news. God bless the smaller banks. Working with a few entities that are attempting to file through Chase and WF and they don’t know shit yet. 
Good luck, guys. 

We got the last of ours (and our clients) yesterday. This week is ending a lot calmer than the last two that’s for sure.
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Wulaw Horn

Wulaw Horn 19153

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17 minutes ago, troph said:


We got the last of ours (and our clients) yesterday. This week is ending a lot calmer than the last two that’s for sure.

What kind of work are you doing on these things and how much are you charging?  What’s your value add to the process?  Is it something you are just handling for existing clients or are you taking on new ones?

I emailed my app to the bank that has my company account but I’m worried they are going to Fuck it up. Application due tomorrow, right?  I got a little lackadaisical because I opened my business January 29 (when I got my EIN and Sec State stuff) and my first payroll was for half a month on February 29th- so I’m assuming that if I get the loan even though my monthly payroll is $25,000 I’m only going to be able to borrow something like $6250, as my 2/15-2/29 payroll was only $10,000. 

I wrote it up as $25k in payroll for a $62,500 loan, but I’m afraid they will probably take the $10,000, divide it by 4 (average of 1/1-2/29) and then multiply by 2.5. 

I mean, a free $6250 is better than a kick in the head, but it wasn’t enough to motivate me to get all that involved.

My main job the guy who owns the outfit is probably going to collect about $675,000 if it all works out the way it should  be offered me 20% of whatever he got forgiven (which should be all of it) but I told him no thanks- I’d just take what I think by rights ought to be mine which is the part that’s forgiveable to him earned out by me and my employees on the team which is about $40k or so.

No sense getting greedy imo as I like where I’m at, I think he ought to spread the rest around to some of the other guys that are 100% commission since we are the talent in the business and could walk at any time, and he can keep all the rent, utility and money for straight salary people for himself (and maybe all the money for the slap dick part timers as well who work on commission)

By rights he could keep it all I suppose but since I pay my team completely out of my pocket and just use his infrastructure (and pay him to do that) the spirit of this thing ought to be for me to get recouped what I’m on the hook for, imo  

$40k would go a long way to tiding me over if we get a really bad economy in the future and the wolf starts circling around my door  

 

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troph

troph 24912

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Well my value add starts with the fact that I’m not just a lawyer. I’m an investor in private business currently holding several positions that have an advisory or active role. I sit on 5-6 boards from for profit start ups to for profit and non profit organizations with significant FTE head counts and monthly payrolls. I’ve been on calls making decisions and modeling the forgiveness piece as we make decisions and I’ve seen the lack of understanding and the crisis management process here up close. I have very little to offer those businesses that are getting a loan and not making any personnel changes. But for those who need to figure out how to survive for 3-6-9 months with little or no revenue or a significant down turn and large payrolls, then I bring a level headed outside perspective that seems to be needed. And as a part of what I’m calling “augmented decision making” services we were also able to move some clients early in the process to more receptive banks. Our clients are getting between low $100k and just over $1m in assistance so it’s enough money to pay attention to for most of them. Our fees are fixed and paid after funding, inclusive of all of these services and extend from before the application through the forgiveness piece. The application itself is only a very small portion of what we are doing for these particular clients.

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Wally Pryor

Wally Pryor 5263

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14 hours ago, MaclovioBrown said:

CaboWabo and I run a small bank in South Texas with low workload on PPP approvals. PM if stuck in big bank queue and at risk of missing first tranche of funding. We can get you an SBA loan number in a day. Actual funding will take up to 10 days depending on when the SBA workload lightens up enough to affirm guidance on guarantees. 

Damn good of you. 

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Wulaw Horn

Wulaw Horn 19153

Posted
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1 hour ago, troph said:

Well my value add starts with the fact that I’m not just a lawyer. I’m an investor in private business currently holding several positions that have an advisory or active role. I sit on 5-6 boards from for profit start ups to for profit and non profit organizations with significant FTE head counts and monthly payrolls. I’ve been on calls making decisions and modeling the forgiveness piece as we make decisions and I’ve seen the lack of understanding and the crisis management process here up close. I have very little to offer those businesses that are getting a loan and not making any personnel changes. But for those who need to figure out how to survive for 3-6-9 months with little or no revenue or a significant down turn and large payrolls, then I bring a level headed outside perspective that seems to be needed. And as a part of what I’m calling “augmented decision making” services we were also able to move some clients early in the process to more receptive banks. Our clients are getting between low $100k and just over $1m in assistance so it’s enough money to pay attention to for most of them. Our fees are fixed and paid after funding, inclusive of all of these services and extend from before the application through the forgiveness piece. The application itself is only a very small portion of what we are doing for these particular clients.

Cool. Stay safe. Keep doing good work. 

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