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

[VABuckeye 2472]

The grant goes up to $10K.  An EIDL loan goes up to $150K.  They originally announced it as up to $2 million but it appears they've backed way off of that number.

[Cheeseweasel 26438]

38 minutes ago, Spaulding Smails said:

I am relatively certain that only W2 wages qualify for loan forgiveness.  Rent, utilities and W2 wages.  No 1099 / subcontractor costs. 

That's my take and I've read nothing to the alternative in the guidance.

[Dbeasy 15051]

Yes they can do this. I’ve advised many clients to do so. What we call “epicenter clients” - those in hospitality, events, travel, leisure, retail - they can not afford to spend for forgiveness, they need to save and spend for making it until October. They have to spend it when they spend it on legit items and saving it forever isn’t really an option given an aggressive time frame.

But does the firm get to have the loan forgiven under that scenario? I thought only the amount that goes towards employee compensation during this time period is forgiven.

[troph 24810]

But does the firm get to have the loan forgiven under that scenario? I thought only the amount that goes towards employee compensation during this time period is forgiven.

Does not get forgiven but spending to get it forgiven can still be the wrong answer. Even if the proceeds are a 9-12 month lifeline that’s better than no cash infusion at all.

[VABuckeye 2472]

Bam!

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

[Wally Pryor 5261]

What's the latest on PPP?   I'm done, thankfully, with all ours. 

How much of round 2 is still out there to be allocated?

[TexMex Horn 68]

5 hours ago, VABuckeye said:

An EIDL loan goes up to $150K.  They originally announced it as up to $2 million but it appears they've backed way off of that number

This part is not true, as we have received a lot more than $150K. Ours apparently was based on COGS

[VABuckeye 2472]

Could it be a recent change?  Everyone I've seen lately who received the email from the SBA has indicated that their slider maxxed out at $150K.

[Incredulity 11675]

29 minutes ago, Wally Pryor said:

What's the latest on PPP?   I'm done, thankfully, with all ours. 

How much of round 2 is still out there to be allocated?

Last I heard (monday?) was 40% left

[Wally Pryor 5261]

Thanks. 

[victory88 5668]

8 hours ago, VABuckeye said:

I received the EIDL email yesterday.  Sliding scale for loan amount up to $150K.  I believe they have maxxed these loans at $150K as it's the most I've heard offered on any site.  We are not asking for that much but $100K at 3.75% with a 30 year term and payments deferred for 12 months is a tough one to pass on.  It looks like I have a couple of large projects to fund coming up soon (fingers crossed) and this would help fund that additional business nicely.

Yeah, I just accepted a 100k today and signed the documents.  It's hard to pass up 3.75% interest on a 30 year note like you said.  There are no pre-payment penalties.  I have a bunch of equipment I need to buy and I won't get those same terms financing it.  I'm taking a 100k out and will use it to grow my start up and if this virus comes back in the fall, it'll be nice to have as a security blanket.  

[UT_OB1 2223]

We got the email for our eidl Friday. I filled out the form Sunday, and by Monday night we had our $25k. I think it was 2.5 times what reported our 4-6 week losses to be. It’s way too late, but what was the time horizon for the losses to look at?  I though it was just 4-6 weeks, but I’ve heard some went out 6 months. 

[troph 24810]

4 hours ago, UT_OB1 said:

We got the email for our eidl Friday. I filled out the form Sunday, and by Monday night we had our $25k. I think it was 2.5 times what reported our 4-6 week losses to be. It’s way too late, but what was the time horizon for the losses to look at?  I though it was just 4-6 weeks, but I’ve heard some went out 6 months. 

you applied early?  the last iteration of the form even weeks before it closed didn't ask such questions.  gross revenue, COGS, number of employees, and lost rent if applicable.  that was it.

[Brew 3049]

SBA released a new Q&A answer yesterday that basically clears everyone below $2M from any oversight on the economic uncertainty question and clears those over $2M from any liability if it is shown that you didn’t have economic uncertainty. You just have to pay it back immediately. It looks like after the publicly traded companies were taken care of they are softening the rhetoric substantially.

[Brew 3049]

Meant to post the details.

How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request?

When submitting a PPP application, all borrowers must certify in good faith that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” SBA, in consultation with the Department of the Treasury, has determined that the following safe harbor will apply to SBA’s review of PPP loans with respect to this issue: Any borrower that, together with its affiliates,²⁰ received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.

SBA has determined that this safe harbor is appropriate because borrowers with loans below this threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment than borrowers that obtained larger loans. This safe harbor will also promote economic certainty as PPP borrowers with more limited resources endeavor to retain and rehire employees. In addition, given the large volume of PPP loans, this approach will enable SBA to conserve its finite audit resources and focus its reviews on larger loans, where the compliance effort may yield higher returns.

Importantly, borrowers with loans greater than $2 million that do not satisfy this safe harbor may still have an adequate basis for making the required good-faith certification, based on their individual circumstances in light of the language of the certification and SBA guidance. SBA has previously stated that all PPP loans in excess of $2 million, and other PPP loans as appropriate, will be subject to review by SBA for compliance with program requirements set forth in the PPP Interim Final Rules and in the Borrower Application Form. If SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness. If the borrower repays the loan after receiving notification from SBA, SBA will not pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning necessity of the loan request. SBA’s determination concerning the certification regarding the necessity of the loan request will not affect SBA’s loan guarantee.²¹

[Cheeseweasel 26438]

So we are halfway thru using our PPP loan and project we'll only use about 90% of it (>75% for payroll, only 15% for utilities, etc).

Anyone else in this boat? Are you planning on giving out bonuses? Giving it back?

[deadshank 24653]

4 minutes ago, Cheeseweasel said:

So we are halfway thru using our PPP loan and project we'll only use about 90% of it (>75% for payroll, only 15% for utilities, etc).

Anyone else in this boat? Are you planning on giving out bonuses? Giving it back?

Bonuses.  Why not? Employees like them and will count against your operating expenses.

Am I wrong?

[Incredulity 11675]

6 minutes ago, Brew said:

Meant to post the details.

How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request?

When submitting a PPP application, all borrowers must certify in good faith that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” SBA, in consultation with the Department of the Treasury, has determined that the following safe harbor will apply to SBA’s review of PPP loans with respect to this issue: Any borrower that, together with its affiliates,²⁰ received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.

SBA has determined that this safe harbor is appropriate because borrowers with loans below this threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment than borrowers that obtained larger loans. This safe harbor will also promote economic certainty as PPP borrowers with more limited resources endeavor to retain and rehire employees. In addition, given the large volume of PPP loans, this approach will enable SBA to conserve its finite audit resources and focus its reviews on larger loans, where the compliance effort may yield higher returns.

Importantly, borrowers with loans greater than $2 million that do not satisfy this safe harbor may still have an adequate basis for making the required good-faith certification, based on their individual circumstances in light of the language of the certification and SBA guidance. SBA has previously stated that all PPP loans in excess of $2 million, and other PPP loans as appropriate, will be subject to review by SBA for compliance with program requirements set forth in the PPP Interim Final Rules and in the Borrower Application Form. If SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness. If the borrower repays the loan after receiving notification from SBA, SBA will not pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning necessity of the loan request. SBA’s determination concerning the certification regarding the necessity of the loan request will not affect SBA’s loan guarantee.²¹

That will be very interesting to watch unfold.   

Any chatter on what metrics they will use to measure "need" or will it be completely subjective?  

[Cheeseweasel 26438]

10 minutes ago, deadshank said:

Bonuses.  Why not? Employees like them and will count against your operating expenses.

Am I wrong?

That's what I'm trying to find out. Zero guidance from the SBA.

[deadshank 24653]

Just now, Cheeseweasel said:

That's what I'm trying to find out. Zero guidance from the SBA.

I think that is a pretty simple and acceptable use of PPP funds.  Assuming you kept your headcount right and the funds were used per the instructions on the label you should pass any smell test the SBA comes up with should you be audited.

I've already discussed this "what if" with my CPA and she has no problem with it.  

But we are dealing with government bureaucrats and a now politicized program that is the definition of "ready? shoot! uh, AIM!"

....so watch your cornhole.

[Cheeseweasel 26438]

1 minute ago, deadshank said:

I've already discussed this "what if" with my CPA and she has no problem with it.  

I'm gonna need pics before I agree with her.

[G650 14263]

32 minutes ago, Cheeseweasel said:

So we are halfway thru using our PPP loan and project we'll only use about 90% of it (>75% for payroll, only 15% for utilities, etc).

Anyone else in this boat? Are you planning on giving out bonuses? Giving it back?

Bonuses here.

[Cheeseweasel 26438]

2 minutes ago, G650 said:

Bonuses here.

My man

[Bozo_Casanova 26472]

Analysts have gone crazy. I've got the same question from like 5 different shops about how Covid is affecting the demand signal in our industry and the economy as a whole.  Literally, that's the whole question. 

 

[G650 14263]

4 minutes ago, Cheeseweasel said:

My man

Gotta take care of my peeps the best I can. Don't know what the future holds.

[Brew 3049]

43 minutes ago, Incredulity said:

That will be very interesting to watch unfold.   

Any chatter on what metrics they will use to measure "need" or will it be completely subjective?  

Zero guidance at this point, we’re working with clients on documenting their expectations when they signed as well as evaluations of current circumstances. The view in the industry is that if you overload them with information supporting your stance that it will get through the system.

[Cheeseweasel 26438]

10 minutes ago, Bozo_Casanova said:

Analysts have gone crazy. I've got the same question from like 5 different shops about how Covid is affecting the demand signal in our industry and the economy as a whole.  Literally, that's the whole question. 

Analysts are bored at home and can't reach out to their normal sources. Poor bastards. 

[Brew 3049]

9 minutes ago, G650 said:

Gotta take care of my peeps the best I can. Don't know what the future holds.

Bonuses are still an unknown at this point. I would say document your reasoning they were needed/deserved and you’re good if you’re under $2M. I would also not try to get to 100% forgiveness by doing things outside normal operations. They made loans based on 11 weeks of payroll and forgiveness is based on 8 weeks payroll, so most everyone should have some measure of payback. I operate and advise under the pigs get fat, hogs get slaughtered method of thinking so I would not go overboard with this. We’re expecting to pay back about 25% because of the timing of the measurement and part time people and I’m good with that.

[Cheeseweasel 26438]

10 minutes ago, Brew said:

We’re expecting to pay back about 25% because of the timing of the measurement and part time people and I’m good with that.

What about the "timing of the measurement" are you concerned about?

[Brew 3049]

38 minutes ago, Cheeseweasel said:

What about the "timing of the measurement" are you concerned about?

It’s specific to us, we have a higher headcount in the first quarter than we do second quarter each year.

[shakahorn 1645]

Got the EIDL email earlier today, seemed too easy and too good to be true.  Slider maxed at $150k, answered a couple questions and done.  Has anyone been denied after reaching this point?

[VABuckeye 2472]

Our EIDL loan was just approved.  We did not apply for the full $150K and instead chose to apply for $100K.  I just signed the closing documents and now we wait for funds to hit the account which from what I've read will be quickly.

[Texaus 377]

Also got the eidl email and logged in. Went up to 150k. So very tempting. I have savings and can weather the storm, I think. But terms are so good. Read somewhere that above 25k they are requesting collateral. Is that true? With that usually comes insurance requirements I’m not okay with, so thinking I might just do 25k.

 

[G650 14263]

Without a crystal ball, its obviously hard to say. Personally, being saddled with a 30 year loan was not appealing to us.

[Bevo 13577]

1 hour ago, VABuckeye said:

Our EIDL loan was just approved.  We did not apply for the full $150K and instead chose to apply for $100K.  I just signed the closing documents and now we wait for funds to hit the account which from what I've read will be quickly.

Do you have a link? We got the grant but did not apply/know anything about the loan. The terms are better than equipment loans so I could pay those off with the EIDL.

[VABuckeye 2472]

If you got the grant you will receive an email when you come up in the queue.  I received the email on Monday.   I applied for the grant on March 30. 

[T’Boo Ted Marshall 2732]

I never got the grant email or funds.

[VABuckeye 2472]

39 minutes ago, Texaus said:

Also got the eidl email and logged in. Went up to 150k. So very tempting. I have savings and can weather the storm, I think. But terms are so good. Read somewhere that above 25k they are requesting collateral. Is that true? With that usually comes insurance requirements I’m not okay with, so thinking I might just do 25k.

 

There’s collateral language but like all things SBA it doesn’t get into specifics of what collateral we’re pledging.  Basically company assets. 
 

re 30 years terms.  No prepayment penalties.   Very small minimum payments due and it won’t be hard to pay chunks on $100k and pay it off in a year or two.  We’ll also have a relationship established with the SBA in case we have future needs for working capital. 

Edited May 15, 2020 by VABuckeye

[VABuckeye 2472]

13 minutes ago, T’Boo Ted Marshall said:

I never got the grant email or funds.

Did you fill out the application for the grant?   I did on the first day it hit and received the email this week.  They have a huge number of apps to get through. 
 

I never got the grant either.  My dumbass entered my bank account info incorrectly.  I was able to correct that information on Monday when I received the email asking me to create and account.  

[T’Boo Ted Marshall 2732]

I did and have the confirmation number.

Wife got hers but not me and I filled my information out prior to entering hers.

[T’Boo Ted Marshall 2732]

I did and have the confirmation number.

Wife got hers but not me and I filled my information out prior to entering hers.

[Lidig8r 1873]

Gents, question about Payroll taxes. It is generally known that payroll taxes for 2020 can be deferred with 50% being paid 12/31/20 and 50% being paid no later than 12/31/21.

What about past due payroll taxes for 2019?

Any instruction whether those too can be deferred?

[Chewbacca 7780]

Gents, question about Payroll taxes. It is generally known that payroll taxes for 2020 can be deferred with 50% being paid 12/31/20 and 50% being paid no later than 12/31/21.
What about past due payroll taxes for 2019?
Any instruction whether those too can be deferred?

I wouldn't fuck with payroll taxes. They will come after you personally if you don't pay them. I know deferment is allowed, but that's one I'm not touching.

[Incredulity 11675]

12 minutes ago, Chewbacca said:

1 hour ago, Lidig8r said:

Gents, question about Payroll taxes. It is generally known that payroll taxes for 2020 can be deferred with 50% being paid 12/31/20 and 50% being paid no later than 12/31/21.
What about past due payroll taxes for 2019?
Any instruction whether those too can be deferred?

I wouldn't fuck with payroll taxes. They will come after you personally if you don't pay them. I know deferment is allowed, but that's one I'm not touching.

This.

x 1000 

[Brew 3049]

10 hours ago, Lidig8r said:

Gents, question about Payroll taxes. It is generally known that payroll taxes for 2020 can be deferred with 50% being paid 12/31/20 and 50% being paid no later than 12/31/21.

What about past due payroll taxes for 2019?

Any instruction whether those too can be deferred?

It is specific to payroll taxes for current payroll periods. You can skip making the payroll tax deposits on your payroll runs and the assumption is the 941 for this quarter will have a place for the deferment to be noted. As mentioned above, this is a horrible idea and the last place to look for help. Payroll tax liabilities typically follow the responsible party if the something happens to the business.

[Brew 3049]

Information everyone has been waiting on hot off the press.

https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sba-and-treasury-release-paycheck-protection-program-loan-forgiveness-application

[shakahorn 1645]

3 hours ago, Brew said:

Information everyone has been waiting on hot off the press.

https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sba-and-treasury-release-paycheck-protection-program-loan-forgiveness-application

Took a quick look and didn't see any gotchas.  Anyone see anything unexpected?

[troph 24810]

Late, on my phone, old lady glasses not working because of tired eyes, so the phone is an inch from my eyes but it looks like you get 56 days of payroll even if the last payroll is paid after the 56th day but it includes days in the 8 week period - an accrual accounting of sorts. This is good. Also the 75% reads like it’s all or nothing but the app let’s you leave out amounts of rent etc that you don’t want included even if you paid it so you can toggle to the 75/25. I’ll look at the interplay of the FTE or salary reduction piece tomorrow but it looks like it’s the lower of but only one of the two even though the statute seems to suggest both, I think this is the right outcome. I agree, first glance it looks like no surprises. Brew or others correct me if I’m wrong.

[Brew 3049]

I need to go back through it this morning, but on the payroll side I read it as paid within the 8 weeks or starting with the first payroll period beginning after funding through 8 weeks. You can calculate it either way.

Edited May 16, 2020 by Brew

[troph 24810]

That makes sense. I had some clients that were worried about timing of payroll, so that’s covered.