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

[VABuckeye 2472]

Thinking about you guys tomorrow morning at 10:30 AM EST.  Hope you all get yours.

[HRSchenker 2268]

On 4/25/2020 at 9:23 AM, cabowabo said:

Curious as to whether any of you small business owners are running into the same issue discussed in this article.  The fact that you can make more on unemployment undermines the entire Paycheck Protection Program. Why not cap unemployment benefits to the person’s pre-pandemic rate?  The fact that unemployment benefits are now a windfall is retarded and just what I would expect from our retarded government. 
https://www.dailymail.co.uk/news/article-8255795/Spa-owner-reveals-staff-angry-got-stiumulus-loan.html

 

Short sighted employees for them to be angry at her like that. The $600 extra on top of state unemployment isn't even going to last 4 months. You guys think the economy is going to come out rip roaring like it was last year as soon as the lockdown is over? I don't think so

[Frieda’s Boss 181]

17 hours ago, VABuckeye said:

Thinking about you guys tomorrow morning at 10:30 AM EST.  Hope you all get yours.

Shockingly sounds like E-Tran was overwhelmed within minutes and shut down. Bank has been quiet as I imagine they are scrambling to get everything in subject to pacing requirements SBA tried to implement. Anyone hearing anything?

[G650 14250]

12 minutes ago, Frieda’s Boss said:

Shockingly sounds like E-Tran was overwhelmed within minutes and shut down. Bank has been quiet as I imagine they are scrambling to get everything in subject to pacing requirements SBA tried to implement. Anyone hearing anything?

Maclovio is on it.

[shakahorn 1645]

15 hours ago, HRSchenker said:

Short sighted employees for them to be angry at her like that. The $600 extra on top of state unemployment isn't even going to last 4 months. You guys think the economy is going to come out rip roaring like it was last year as soon as the lockdown is over? I don't think so

I agree with you.  By my calc's the break-even is around $25-$26 per hour, although the article says $30.  Regardless, hourly-wage workers in that range aren't really good at the big picture.  Add that in to the fact that some, if not many businesses don't treat their hourly-wage employees well, and yeah, it's a problem.  If I'm making $23 per hour and can get the same by doing nothing, and you treat me like crap, why the heck would I care about your business?  We've got this problem now, and we treat our folks well, some of whom have been around since we opened the doors in 2006.

[troph 24783]

have we figured out what "transportation" means in the definition of utilities?

[G650 14250]

10 minutes ago, troph said:

have we figured out what "transportation" means in the definition of utilities?

I wish

[Cheeseweasel 26438]

2 hours ago, troph said:

have we figured out what "transportation" means in the definition of utilities?

Funny, we've kicked that one around quite a bit and none of us have a clue how it would apply as a utility.

[orange dream 1247]

My best guess is if you had a fleet of vehicles / service trucks that the fuel costs for your fleet could be considered a utility.  Just my guess, not advice.

[G650 14250]

13 minutes ago, orange dream said:

My best guess is if you had a fleet of vehicles / service trucks that the fuel costs for your fleet could be considered a utility.  Just my guess, not advice.

Interesting. I will have to follow this up as that is a huge cost for me.

[Spaulding Smails 1552]

36 minutes ago, orange dream said:

My best guess is if you had a fleet of vehicles / service trucks that the fuel costs for your fleet could be considered a utility.  Just my guess, not advice.

I had a call with my CPA about 10 days ago.  He indicated that, at that time, the SBA had not yet released specific guidelines and definitions for these expense categories.  I asked him about a few items like fuel, and his advice was to not push it.  Roll with what you're sure qualifies, and avoid raising any eyebrows or encouraging an audit.  My immediate question was around cell phone service.  I can see that as closer to the definition of "utilities" than fuel for vehicles and equipment.  If anyone has more insight here, I'm all ears.

Edited April 27, 2020 by Spaulding Smails

[Brew 3049]

1 hour ago, orange dream said:

My best guess is if you had a fleet of vehicles / service trucks that the fuel costs for your fleet could be considered a utility.  Just my guess, not advice.

This is what I have seen from some pretty reputable sources. However, I would wait on final regs before counting on it.

[Wulaw Horn 19069]

So- has SBA started accepting new submissions yet?  If so when did that happen? If not any idea when it will happen?

Ive got two loans in at banks (got fucked last time) and one told me Thursday- no problem- we will submit the second we can but that’s not yet, and another one told me the same story on Friday but I haven’t heard anything else on that yet either- they’d both seemed to indicate that today was the magic day. Was it?  

Thanks- I will hang up and listen and really appreciate everyone on this thread. It’s one of the absolute shining stars about this website that there are so many smart people that are creating such a wonderful eco system to describe what’s going on and get to the bottom of it with great explanations. 

Seriously/ kudos to all of y’all and my heartfelt thanks and appreciation. 

[G650 14250]

It opened at 1030 Eastern time this morning.

 

Edited April 27, 2020 by G650

[T’Boo Ted Marshall 2732]

Has there been any discussions surrounding the measurement of GR during the subsequent 8 weeks after loan funds received being tied to forgiveness %? Partner mentioned that on a call today and that’s the dust o had heard of that.

[Brew 3049]

4 minutes ago, G650 said:

It opened at 1030 Eastern time this morning.

 

It’s been crashing all day. I don’t think many have been input.

[Wulaw Horn 19069]

12 minutes ago, G650 said:

It opened at 1030 Eastern time this morning.

 

Thanks man. 

[G650 14250]

13 minutes ago, T’Boo Ted Marshall said:

Has there been any discussions surrounding the measurement of GR during the subsequent 8 weeks after loan funds received being tied to forgiveness %? Partner mentioned that on a call today and that’s the dust o had heard of that.
 

First I have heard of that.

10 minutes ago, Brew said:

It’s been crashing all day. I don’t think many have been input.

So I have heard.

[SquishMitten 10403]

It’s been crashing all day. I don’t think many have been input.

Total shitshow. We’ve only gotten a handful through (out of about 1500 that were completely ready). These fuckheads allow bulk submissions of >15k loans (i.e., spreadsheets with 15k rows) so rest assured the big banks will drain the funding with preferred loans (again). They dropped that threshold a bit earlier today, but it’s still not good enough for any community banks. Can’t believe they didn’t see this onslaught coming considering they were fully aware most lenders were still processing apps just waiting for the minute they came back online

[Cheeseweasel 26438]

17 hours ago, T’Boo Ted Marshall said:

Has there been any discussions surrounding the measurement of GR during the subsequent 8 weeks after loan funds received being tied to forgiveness %? Partner mentioned that on a call today and that’s the dust o had heard of that.
 

There's been very little guidelines (read zero) from the SBA.

[orange dream 1247]

This has probably been addressed but I don't think I've seen any kind of definitive answer:

PPP Loan amount calculation : Payroll costs including rent / utilities, etc. (as defined)  let's say Payroll is 100k /month and the rent / utilities, etc. bucket is 15k/month.

Monthly eligible amount is 115k * 2.5 = 287,500 PPP loan proceeds.

Forgiveness as defined in Treasury Fact Sheet:

- The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made;

- and Employee and compensation levels are maintained.

So in my scenario let's say the loan was funded on April 16th for 287,500 and the company is a semi-monthly (15th and end of month ) payroll company.  The 8 week period ends on June 11 at which point the company will have paid payroll for 3 semi-monthly periods (End of April and Middle and End of May) (after loan was "made")  That would total 150k in payroll and paid rent / utilities, etc. at the beginning of May and June for a total of 30k.  With that, for the 8 week period after the loan was "made" the total amount used to cover the allowed categories in the 8 week period is 180k vs. the 287,500 that was "borrowed" under PPP.  Any thoughts on how those will be reconciled to come up with what is forgiven? 

Even if you change the dates (or payroll frequency) so that you get a full 2 months worth of payroll and rent/other stuff in the 8 week period that would only come up with 230k of "forgivable" costs in the 8 week period.  Is the working assumption of everyone who is getting these PPP loans that they will need to pay back approximately 20% of what was borrowed?  I've had that thought in the back of my head but haven't ever really seen it addressed.  I'd be curious to know your thoughts / assumptions.

[FORTY NINE TO ZERO 2652]

Like I said before, frost funded the loans, but I’m having difficulty getting answers for the following questions. (I guess they don’t know themselves)

 

anyone have any idea on the following?

we furloughed two people when this started. Mainly due to them being scared to leave their houses. One has since come back, the other still in end of the world prepper  mode. 
Do we have to have him back in order to have the loan forgiven?  After down googling, It looks like we can hire anyone As long as our employee numbers equal that of feb14th and our payroll is at least 75% of what it was on that date.   Does anyone know if that is accurate?

Also is it 75% of the total payroll or 75% of the payroll after subtracting the amount people made over 100k?

[FORTY NINE TO ZERO 2652]

Also are past bonuses included in payroll?

[Cheeseweasel 26438]

57 minutes ago, orange dream said:

This has probably been addressed but I don't think I've seen any kind of definitive answer:

PPP Loan amount calculation : Payroll costs including rent / utilities, etc. (as defined)  let's say Payroll is 100k /month and the rent / utilities, etc. bucket is 15k/month.

Monthly eligible amount is 115k * 2.5 = 287,500 PPP loan proceeds.

Forgiveness as defined in Treasury Fact Sheet:

- The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made;

- and Employee and compensation levels are maintained.

So in my scenario let's say the loan was funded on April 16th for 287,500 and the company is a semi-monthly (15th and end of month ) payroll company.  The 8 week period ends on June 11 at which point the company will have paid payroll for 3 semi-monthly periods (End of April and Middle and End of May) (after loan was "made")  That would total 150k in payroll and paid rent / utilities, etc. at the beginning of May and June for a total of 30k.  With that, for the 8 week period after the loan was "made" the total amount used to cover the allowed categories in the 8 week period is 180k vs. the 287,500 that was "borrowed" under PPP.  Any thoughts on how those will be reconciled to come up with what is forgiven? 

Even if you change the dates (or payroll frequency) so that you get a full 2 months worth of payroll and rent/other stuff in the 8 week period that would only come up with 230k of "forgivable" costs in the 8 week period.  Is the working assumption of everyone who is getting these PPP loans that they will need to pay back approximately 20% of what was borrowed?  I've had that thought in the back of my head but haven't ever really seen it addressed.  I'd be curious to know your thoughts / assumptions.

It hasn't been addressed because the guidance is non-existent. The language in the bill uses the terms "incurred" and "paid" intermittently. We are trying to make sure we are paying everything within the 8 week period with the intention of following the "spirit" of the law (ie: 8 weeks of payroll, 8 weeks of utilities). It's not easy because the power company bills that are incurred in May won't be billed until mid to late June (and passed the period). So we are using the April and May bills to cover the 8 week period. Not perfect, but if we are audited, we'll give them a methodology/reasoning that should keep us out of trouble. 

Regarding the returned money, if your utilities are less than 25% of your payroll, theoretically, you will have to return the money. Three schools of thought on this: 

1. Just pay the balance as a "bonus" to employees on the last payroll run. No guidance says this is wrong and nothing says you can't go over 25%

2. Use the extra as a short term loan at 1% interest

3. Pay it back immediately.

[Cheeseweasel 26438]

46 minutes ago, Xian said:

Also are past bonuses included in payroll?

Not likely. It should be "incurred' and "paid" within the period. 

[Incredulity 11665]

I wouldn't count on forgiveness in the near term.  Plan on paying the interest.

Forgiveness reconciliation will definitely be a shitshow that will make the roll outs look tame.

[4th and 5 4914]

37 minutes ago, orange dream said:

This has probably been addressed but I don't think I've seen any kind of definitive answer:

PPP Loan amount calculation : Payroll costs including rent / utilities, etc. (as defined)  let's say Payroll is 100k /month and the rent / utilities, etc. bucket is 15k/month.

Monthly eligible amount is 115k * 2.5 = 287,500 PPP loan proceeds.

Forgiveness as defined in Treasury Fact Sheet:

- The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made;

- and Employee and compensation levels are maintained.

So in my scenario let's say the loan was funded on April 16th for 287,500 and the company is a semi-monthly (15th and end of month ) payroll company.  The 8 week period ends on June 11 at which point the company will have paid payroll for 3 semi-monthly periods (End of April and Middle and End of May) (after loan was "made")  That would total 150k in payroll and paid rent / utilities, etc. at the beginning of May and June for a total of 30k.  With that, for the 8 week period after the loan was "made" the total amount used to cover the allowed categories in the 8 week period is 180k vs. the 287,500 that was "borrowed" under PPP.  Any thoughts on how those will be reconciled to come up with what is forgiven? 

Even if you change the dates (or payroll frequency) so that you get a full 2 months worth of payroll and rent/other stuff in the 8 week period that would only come up with 230k of "forgivable" costs in the 8 week period.  Is the working assumption of everyone who is getting these PPP loans that they will need to pay back approximately 20% of what was borrowed?  I've had that thought in the back of my head but haven't ever really seen it addressed.  I'd be curious to know your thoughts / assumptions.

This is exactly my question, I was working on a forecast this morning noting the numbers play out like the government did not think this through. 

If I am a sole practitioner and I pay myself on the 15th normally, but didn't have the funds to do so until PPP loan was funded on the 20th (hence expiration June 15, 8 weeks later), can I pay myself on the 20th for 4/15, 5/15 and 6/15 which would all be within the 8 weeks? Then run my payroll 4/24, 5/8, 5/22 and 6/5. That's really all the "payrolls" I can fit into the 8 weeks.
 

[Cheeseweasel 26438]

1 hour ago, Xian said:

Do we have to have him back in order to have the loan forgiven?  After down googling, It looks like we can hire anyone As long as our employee numbers equal that of feb14th and our payroll is at least 75% of what it was on that date.   Does anyone know if that is accurate?

It reads as though it doesn't matter who, more how many and how much.

1 hour ago, Xian said:

Also is it 75% of the total payroll or 75% of the payroll after subtracting the amount people made over 100k

75% of the total payroll +benefits. You will need to cap those who make over 100k @ 100k. 

[Cheeseweasel 26438]

2 minutes ago, 4th and 5 said:

This is exactly my question, I was working on a forecast this morning noting the numbers play out like the government did not think this through. 

If I am a sole practitioner and I pay myself on the 15th normally, but didn't have the funds to do so until PPP loan was funded on the 20th (hence expiration June 15, 8 weeks later), can I pay myself on the 20th for 4/15, 5/15 and 6/15 which would all be within the 8 weeks? Then run my payroll 4/24, 5/8, 5/22 and 6/5. That's really all the "payrolls" I can fit into the 8 weeks.
 

Run payroll faster (weekly) for the 8 week period. You'll be glad you did.

[Incredulity 11665]

I would also be cautious of hiring family, juicing payroll with bonuses or any other scheme to max out forgiveness.  

[Cheeseweasel 26438]

10 minutes ago, Incredulity said:

I would also be cautious of hiring family, juicing payroll with bonuses or any other scheme to max out forgiveness.  

Yeah, you don't want to hire family or anyone who will draw a red flag in audit. As far as "juicing payroll", I have seen zero guidance on it. Hell, most places are paying people to stay home.

[Brew 3049]

For those interested, $52B on 475k loans has been committed on round 2 as of 1pm EST. The entire $30B set aside for small banks has been funded, so everyone is back in the same funding mechanism now.

[G650 14250]

33 minutes ago, Cheeseweasel said:

It hasn't been addressed because the guidance is non-existent. The language in the bill uses the terms "incurred" and "paid" intermittently. We are trying to make sure we are paying everything within the 8 week period with the intention of following the "spirit" of the law (ie: 8 weeks of payroll, 8 weeks of utilities). It's not easy because the power company bills that are incurred in May won't be billed until mid to late June (and passed the period). So we are using the April and May bills to cover the 8 week period. Not perfect, but if we are audited, we'll give them a methodology/reasoning that should keep us out of trouble. 

Regarding the returned money, if your utilities are less than 25% of your payroll, theoretically, you will have to return the money. Three schools of thought on this: 

1. Just pay the balance as a "bonus" to employees on the last payroll run. No guidance says this is wrong and nothing says you can't go over 25%

2. Use the extra as a short term loan at 1% interest

3. Pay it back immediately.

 

The thing about this whole deal is there is really no hard and fast guidance right now. I think people are getting tripped up in thinking the initial amount is set in stone where really it's just a best guess. My CPA and I talked extensively about this, and really as it sits now the banks are the gatekeepers for what goes out. I was worried that the SBA would nitpick something, but she was adamant that if the banks underwriters said it was good, it was good. And it was.

 

The actual nuts and bolts are going to be the audits on the back end when you turn in the actual expenses incurred over the 8 weeks. That will be the gospel.

 

 

18 minutes ago, Incredulity said:

I would also be cautious of hiring family, juicing payroll with bonuses or any other scheme to max out forgiveness.  

We are just going to work a lot of overtime. We have work now and we aren't guaranteed to in the fall, so take it while you can and I am confident that is as legit as it gets.

[Cheeseweasel 26438]

1 minute ago, G650 said:

The actual nuts and bolts are going to be the audits on the back end when you turn in the actual expenses incurred over the 8 weeks. That will be the gospel.

Truth, but at some point, the auditors are going to need guidance. It's a shame that the rules will be made after the game is over.

[Incredulity 11665]

I would agree. 

I have just seen the commentary about simple payroll boosting schemes that I would assume will be questions 1 and 1a. on whatever examinations/certifications/audits go on to determine forgiveness and "legality" of use of loan proceeds.

[G650 14250]

Indeed

[Brew 3049]

There is zero guidance on anything forgiveness related at this time. SBA has not released anything, so any information anyone has read at this point is an opinion on what they expect. I would not screw around with payroll or any of it for that matter. Spend it as intended and pay back what is not forgivable. We have advised some medical practices that they could pay small bonus amounts to those still working in the office, but they planned to do that with or without PPP money.

As far as the back end review of this, banks are expecting to bear the brunt of the back end workload as well with just cursory review from SBA. There are timelines in place for SBA to make the forgiveness payment which will not allow them to be at all detailed in what they look like. However, there will be post forgiveness reviews based on all the political bullshit out right now as well as the way they are completely bastardizing how this law was written.

[Cheeseweasel 26438]

8 minutes ago, Brew said:

As far as the back end review of this, banks are expecting to bear the brunt of the back end workload as well with just cursory review from SBA.

That was my assumption too. There's no way the SBA will have the manpower to audit this and they will rely on the banks to do it. Once again, having a good relationship with your bank is critical.

[Wally Pryor 5261]

30 minutes ago, Incredulity said:

I would agree. 

I have just seen the commentary about simple payroll boosting schemes that I would assume will be questions 1 and 1a. on whatever examinations/certifications/audits go on to determine forgiveness and "legality" of use of loan proceeds.

A bank officer is going to have trouble opining on hardship bonuses given to employees, especially when there is no guidance to begin with.   Employer may have "planned" all along to award staff. 

[Cheeseweasel 26438]

44 minutes ago, Wally Pryor said:

Employer may have "planned" all along to award staff. 

Yeah! I planned it all along! That's the ticket!

[Wally Pryor 5261]

Not arguing.  Just another exhibit of how big a cluster fuck the whole process has been, and continues to be. 

[Incredulity 11665]

It’s not the bank officer I would be worried about.

[Cheeseweasel 26438]

1 minute ago, Incredulity said:

It’s not the bank officer I would be worried about.

His wife?

[Incredulity 11665]

9 minutes ago, Cheeseweasel said:

His wife?

She work for the IRS?

[Chewbacca 7773]

I'm guessing nobody has guidance, but how are we supposed to treat payroll for the 8 week period ending after you get the funds?  We pay on a 2 week lag and I just re-hired 3 people last Monday, which was the day I got my PPP loan funded.  My other employees are just on a regular pay schedule.  No other layoffs or hires at this time.

 

I imagine almost every business out there pays with at least a 1 week lag, so how is everyone handling this?  Is it the period in which the costs were incurred or paid that will be counted?  I asked my banker and he said they don't have guidance but he said we should stay on our regular pay period and report costs incurred during the 8 week period (the last of which will be paid 2 weeks after the 8 weeks is up).  Anyone see anything that contradicts that?  I have my first post-PPP payroll due tomorrow (Friday is payday) and I need to sort this out.

[Chewbacca 7773]

20 minutes ago, Incredulity said:

It’s not the bank officer I would be worried about.

Why not?  They'll be the ones certifying the forgiveness for the SBA.  SBA doesn't have the manpower to do that.

[Wulaw Horn 19069]

Got a loan number on one business at 9:30 am. When should I expect the money?

thanks

 

 

[G650 14250]

4 minutes ago, Chewbacca said:

I'm guessing nobody has guidance, but how are we supposed to treat payroll for the 8 week period ending after you get the funds?  We pay on a 2 week lag and I just re-hired 3 people last Monday, which was the day I got my PPP loan funded.  My other employees are just on a regular pay schedule.  No other layoffs or hires at this time.

 

I imagine almost every business out there pays with at least a 1 week lag, so how is everyone handling this?  Is it the period in which the costs were incurred or paid that will be counted?  I asked my banker and he said they don't have guidance but he said we should stay on our regular pay period and report costs incurred during the 8 week period (the last of which will be paid 2 weeks after the 8 weeks is up).  Anyone see anything that contradicts that?  I have my first post-PPP payroll due tomorrow (Friday is payday) and I need to sort this out.

It would have to be the cost period.

[Chewbacca 7773]

Just now, Wulaw Horn said:

Got a loan number on one business at 9:30 am. When should I expect the money?

thanks

 

 

Bank must fund within 10 calendar days.  I had funds the same day we signed loan paperwork.

[Chewbacca 7773]

1 minute ago, G650 said:

It would have to be the cost period.

That's what I think, too.  Just wondering if anyone has seen anything different.  Don't want to have to eat 2 weeks of wages for nothing.