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

[Reagan1k 3041]

1 hour ago, Wally Pryor said:

Give small businesses more time to rehire employees — until the end of enhanced unemployment benefits that were originally passed in the CARES Act on March 27.

That's a huge deal.  A lot of businesses can't rehire anyone now b/c the laid off will take a paycut going back to work as long as the federal $600/week kicker is in place on top of normal unemployment.

Univ. of Chicago study claimed 68% of workers are making more than they were while employed.  I know a couple of outfits that can't get their old workers back, especially in the service industries that are cranking back up.  It's not a political statement, just human nature and math.

Give the businesses time to rehire or spend the money on more fixed costs and still have the PPP forgiven when the workers are willing to come back.  Only seems fair.  Otherwise the unemployment benefits undermine the intent of the PPP.

Edited May 27, 2020 by Reagan1k

[Wally Pryor 5388]

1 hour ago, Cheeseweasel said:

This would clean up a bunch of stuff.

But would suck if you were someone in line to get a payroll bonus to expedite usage of the funds over the 8 weeks. 

[Texaus 389]

I know a couple of outfits that can't get their old workers back

i don’t think a worker can choose to remain on unemployment in this scenario. As an employer, if I was faced with a worker trying to continue to remain on unemployment and I’d offered their old job back, I would let twc know about it.

 

[Reagan1k 3041]

Technically you are correct but under the current system and with backlogs at every pinch point in the process, getting hourly service-industry employees back to work for you (or new workers from businesses that went under) and off of unemployment isn't easy.  I'm not blaming the workers either.  Were I living in their shoes I might not be so eager to go back so I'm not judging.

Conceptually it should be a piece of cake and in normal times the spigot is quick to be cut off in cases of abuse, but times are different.  It's at least a challenge if not worse for some of these companies and the PPP forgiveness time clock is not working in their favor.

Workers also have the out of saying "I don't feel safe" or "I can't get childcare" - often truthfully and that's a hard nut to crack for both the business and the unemployment office.  It's a spinning wheel of unintended consequences for sure.

Edited May 27, 2020 by Reagan1k

[4th and 5 4997]

My next question will be taking the EIDL. My business was shot by the quarantine. Like from Corona commercial "crushed it" to a broke phone in a span of 2 weeks. It's gotten better in the last few weeks as I hit some big licks. But I feel like we are coming out of this too early and the shit is going to hit the fan again, and harder. And if I refuse it, I could be in a tough spot.

Shouldn't I just take the max money and see what happens over the short term of the next 6 months to a year?

Edited May 27, 2020 by 4th and 5

[4th and 5 4997]

is there anything that prevents me from just doing this to offset the interest for holding it for a while?

 

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[Texaus 389]

My next question will be taking the EIDL. My business was shot by the quarantine. Like from Corona commercial "crushed it" to a broke phone in a span of 2 weeks. It's gotten better in the last few weeks as I hit some big licks. But I feel like we are coming out of this too early and the shit is going to hit the fan again, and harder. And if I refuse it, I could be in a tough spot.
Shouldn't I just take the max money and see what happens over the short term of the next 6 months to a year?

Same boat. Not exactly needed, but fearful of the future. I took 24900 and will hold it. 25000 and above has collateral/insurance requirements. if needs dictate i can increase amount and get more at later date. Did not want to refuse loan with looming uncertainty. Interest is sunk cost and treating it like insurance for the time being.

[Chewbacca 7827]

4 hours ago, Wally Pryor said:

From the ABJ....

Legislation to overhaul the Small Business Administration’s Paycheck Protection Program — and make its numerous provisions friendlier to restaurants and retail shops in particular — may come before the House of Representatives as soon as Wednesday afternoon.

The Paycheck Protection Flexibility Act would:

• Extend the “covered period” under which small businesses can spend the loan proceeds from eight weeks to 24 weeks or until Dec. 31, 2020.
• Remove the limits on loan forgiveness for small businesses that were unable to rehire employees, hire new employees or return to the same level of business activity as before the virus.
• Strike the 25% cap to use PPP funds on nonpayroll expenses, such as rent, mortgage interest and utilities. Currently, small businesses must use at least 75% of the loan for payroll expenses to get maximum forgiveness.
• Allow small businesses to take a PPP loan and also qualify for a separate, recently enacted tax credit to defer payroll taxes, currently prohibited to prevent “double dipping.”
• Extend the loan terms for any unforgiven portions that need to be repaid from two years to five years, at 1% interest.
• Give small businesses more time to rehire employees — until the end of enhanced unemployment benefits that were originally passed in the CARES Act on March 27.

This would be huge if they make these changes.

[troph 25096]

My next question will be taking the EIDL. My business was shot by the quarantine. Like from Corona commercial "crushed it" to a broke phone in a span of 2 weeks. It's gotten better in the last few weeks as I hit some big licks. But I feel like we are coming out of this too early and the shit is going to hit the fan again, and harder. And if I refuse it, I could be in a tough spot.
Shouldn't I just take the max money and see what happens over the short term of the next 6 months to a year?

Yes this is exactly what it’s for. Sock it away in case it’s needed.

[UT_OB1 2262]

3 hours ago, 4th and 5 said:

My next question will be taking the EIDL. My business was shot by the quarantine. Like from Corona commercial "crushed it" to a broke phone in a span of 2 weeks. It's gotten better in the last few weeks as I hit some big licks. But I feel like we are coming out of this too early and the shit is going to hit the fan again, and harder. And if I refuse it, I could be in a tough spot.

Shouldn't I just take the max money and see what happens over the short term of the next 6 months to a year?

Take it. You don’t start payments for 12 months. Stash it in an interest earning account and don’t spend it if you don’t need to. If you need it then you’re safe. If you don’t in 11 months just pay it back. 

[troph 25096]

This would be huge if they make these changes.

Sorely needed. PPP is a mess.

[Cheeseweasel 26439]

14 hours ago, Wally Pryor said:

But would suck if you were someone in line to get a payroll bonus to expedite usage of the funds over the 8 weeks. 

Short term gain vs. long term gain.

I want to run/work for a business that is solid for the long haul.

[orange dream 1288]

Does anyone (@MaclovioBrown ) know definitively that there are funds remaining in the PPP program? I found out this morning that a friend of a friend is having to lay people off on Monday because they never could get their PPP application approved / funded.   I'd like to help them but I don't want to send them down a rabbit hole if there is no possibility of getting funded at this point. 

I get the impression that the EIDL program is only accepting new applications from agricultural based businesses at this stage.  If that is wrong, please let me know that also.

TIA

[VABuckeye 2481]

You are correct about EIDL loans.  That ship has sailed for non-agricultural based businesses.

I received an email a couple of days ago that there are still over $115 billion in funds in the PPP bucket.

[shakahorn 1655]

15 hours ago, UT_OB1 said:

Take it. You don’t start payments for 12 months. Stash it in an interest earning account and don’t spend it if you don’t need to. If you need it then you’re safe. If you don’t in 11 months just pay it back. 

One question for which I can't find the answer, does interest kick in on day 1 or after 12 months?

We have done what you say, stashed the $$$ in a money market fund earning 1.3% right now, so the net interest rate is ~2.5%.  Must resist temptation to play the market with those funds.  Appears to be allowable.

[UT_OB1 2262]

31 minutes ago, shakahorn said:

One question for which I can't find the answer, does interest kick in on day 1 or after 12 months?

We have done what you say, stashed the $$$ in a money market fund earning 1.3% right now, so the net interest rate is ~2.5%.  Must resist temptation to play the market with those funds.  Appears to be allowable.

Ha, yeah don’t put it in your favorite stonk. I’m pretty sure that they won’t look kindly on that if they audit you. 
 

I believe interest kicks in day one 

[Cheeseweasel 26439]

Quote

 

WASHINGTON (Reuters) - The U.S. House of Representatives on Thursday approved legislation increasing the amount of time, to 24 weeks from the current eight weeks, for small businesses to use Paycheck Protection Program (PPP) loans spurred by the coronavirus outbreak.

The legislation, passed by a vote of 417-1, now goes to the Senate. The program, created in March, helps support small businesses during the pandemic and encourages them to retain employees.

Last week, senators worked on a bipartisan bill extending the time frame to 16 weeks, instead of the 24 weeks embraced by the House.

 

Halfway home. Come on, Senate!

 

[4th and 5 4997]

My business was approved for the EIDL

i read the terms of the loan:

https://taxresolutionacademy.com/wp-content/uploads/2020/05/SBA_Form_1391_-_EIDL_Agreement.pdf

and with these terms I will not take 25000 or more....I hesitate to even take any. 

I’ll probably wait just under the two months they give you to decide, and then maybe take 24900 and bank it if things are getting worse.

My May numbers were actually slightly above average.

[troph 25096]

EIDL terms are rough. They aren’t unlike a bank loan but when it’s the feds with the power it’s a bit much. Blanket lien and no distributions to owners is a rough one especially for such a small loan. I’ve got several clients turning it down.

[Brew 3049]

PPP extension through the House and Senate, too early for me to say what the impacts are. Most people are already 6-7 weeks into at this point. If I was going to have longer to cover payroll that would have been useful info a few weeks back.

[Cheeseweasel 26439]

10 hours ago, Brew said:

, too early for me to say what the impacts are.

It's perfect for us. We are at 7 weeks and will stretch the money farther now. Great news!!!!

[Wally Pryor 5388]

10 hours ago, Brew said:

... that would have been useful info a few weeks back.

No shit.  What a clusterfuck on the timing. 

[Wally Pryor 5388]

Just now, Cheeseweasel said:

It's perfect for us. We are at 7 weeks and will stretch the money farther now. Great news!!!!

Yeah, same here.  Timing is perfect.  But for those who were funded a week or two prior to us... Not so much. 

[Cheeseweasel 26439]

24 minutes ago, Wally Pryor said:

Yeah, same here.  Timing is perfect.  But for those who were funded a week or two prior to us... Not so much. 

Hadn't thought of that. But does it matter if they hadn't turned their forgiveness application in? I'm not even sure banks are taking them  yet.

[Wally Pryor 5388]

Just now, Cheeseweasel said:

Hadn't thought of that. But does it matter if they hadn't turned their forgiveness application in? I'm not even sure banks are taking them  yet.

It matters if they already paid out a shitload of bonus money to max out their payroll forgiveness # within the 8 weeks.   I mean, the employees who got the bonuses would certainly be happy but the $ are paid.  The ship has sailed. 

[Cheeseweasel 26439]

3 minutes ago, Wally Pryor said:

It matters if they already paid out a shitload of bonus money to max out their payroll forgiveness # within the 8 weeks.   I mean, the employees who got the bonuses would certainly be happy but the $ are paid.  The ship has sailed. 

Shit. Good point. We were going to do that but assumed that congress would pass this bill.

[Brew 3049]

Same for those closed and semi-closed businesses that brought everyone back on and paid them plus extra when they could have played the timing game much better. The money is spent now, so they will likely be laying off in week 9 unless business magically picks back up 2 weeks.

At this point they should have just eliminated the calculation or said send the FTO piece showing no layoffs / payroll reductions as everyone can get the dollars spent in that time frame.

[Wally Pryor 5388]

Yes, it's a clusterfuck on several levels. 

Seems like we've said as such on more than one occasion. 

[Cheeseweasel 26439]

13 minutes ago, Brew said:

Same for those closed and semi-closed businesses that brought everyone back on and paid them plus extra when they could have played the timing game much better.

Very true, but I'll have to admit, I don't think anyone thought we'd be dealing with this in June.

[Incredulity 11861]

1 hour ago, Wally Pryor said:

Yeah, same here.  Timing is perfect.  But for those who were funded a week or two prior to us... Not so much. 

Classic.

I don't remember which of the years it was, but our Health Insurance renewal was done under Obamacare rules literally a few days before they announced a one year extension for implementation.  Also, had a situation year before last where we missed the opportunity for accelerated depreciation on some equipment under 2017 tax reform because initial PO for the equipment was days before the retroactive cutoff.

[Cheeseweasel 26439]

1 minute ago, Incredulity said:

Classic.

I don't remember which of the years it was, but our Health Insurance renewal was done under Obamacare rules literally a few days before they announced a one year extension for implementation.  Also, had a situation year before last where we missed the opportunity for accelerated depreciation on some equipment under 2017 tax reform because initial PO for the equipment was days before the retroactive cutoff.

I'm going to use you as a barometer for major legislation going forward.

[Incredulity 11861]

Just now, Cheeseweasel said:

I'm going to use you as a barometer for major legislation going forward.

I wish I could figure out a way to capitalize on it.  LOL  Chicken, egg...tree falls, forest...all that.

[VABuckeye 2481]

2 hours ago, Wally Pryor said:

Yeah, same here.  Timing is perfect.  But for those who were funded a week or two prior to us... Not so much. 

We were funded mid-April.  We immediately issed a payroll from the PPP funds.  The fact that this is now retroactive back to the day Trump signed (March 27th) means that entire payroll is 100% forgiven with no questions asked beyond the form.  We're also now able to count the June 15th payroll.  The only money we''ll have to pay back is the $5K EIDL grant if we choose to keep those funds instead of returning them.

[Cheeseweasel 26439]

Just now, VABuckeye said:

The fact that this is now retroactive back to the day Trump signed (March 27th)

I missed that. Niiiiice.

[Chewbacca 7827]

We were funded mid April as well.  Our loan has a significant piece that we were expecting to have to repay due to how the calculation works out.  With this extension, I should be able to keep everyone on our payroll for a couple more months.  Hopefully the work comes back by then.

[VABuckeye 2481]

Fingers crossed man.  Right now we're waiting to hear on a couple of projects but it's just enough to keep kicking the can down the road.

[shakahorn 1655]

3 hours ago, Wally Pryor said:

Yes, it's a clusterfuck on several levels. 

Seems like we've said as such on more than one occasion. 

Yeah and if after all this settles and we get into forgiveness audits and the SBA turns into hardasses on that...well they're getting a sternly worded letter from me.  I'm really hoping they are as loose coming out as they are going in.

[Wally Pryor 5388]

I don't think there is going to be too much hardassery on this.   Every time we go through additional iterations of revisions and confusion the leash keeps getting longer.  And we're still not done. 

In lieu of submitting the formal Forgiveness Application in a few months I'm now hoping to submit a two-liner on my company letterhead, to our banker that says "We're good. All should be forgiven."  

I sign and we're done. 

[troph 25096]

Very true, but I'll have to admit, I don't think anyone thought we'd be dealing with this in June.

This meaning the virus? Science was pretty clear back then too. This was t going away until the end of the summer at the earliest and probably lasts until next year. Severity, locations of outbreaks, etc unknown but we knew it wasn’t going away.

[Brew 3049]

@troph, if you’re doing any work on your trip, let me get your thoughts on this one. Had a conference call this morning with a couple of our bankers on the 8/24 week period. They are taking the position based on what they have been told by SBA that the 8 week cap on payroll still applies, you can just pick the 8 week period you use during the 24 week period. They don’t expect much to change on the application other than the specific period you are using.

Logically, it makes sense in that it is an extension of the time period but not an extension of measurement period. The law is not specific after thinking about it, but I haven’t had a chance to reread it.

They did say most of their SBA contacts have said they don’t know, but the ones that have answered have stuck with 8 weeks.

[Cheeseweasel 26439]

1 hour ago, Brew said:

@troph, if you’re doing any work on your trip, let me get your thoughts on this one. Had a conference call this morning with a couple of our bankers on the 8/24 week period. They are taking the position based on what they have been told by SBA that the 8 week cap on payroll still applies, you can just pick the 8 week period you use during the 24 week period. They don’t expect much to change on the application other than the specific period you are using.

Logically, it makes sense in that it is an extension of the time period but not an extension of measurement period. The law is not specific after thinking about it, but I haven’t had a chance to reread it.

They did say most of their SBA contacts have said they don’t know, but the ones that have answered have stuck with 8 weeks.

Fuck every bit of that if it's true. I've not read anything of the sort. 

[Chewbacca 7827]

[mention=93]troph[/mention], if you’re doing any work on your trip, let me get your thoughts on this one. Had a conference call this morning with a couple of our bankers on the 8/24 week period. They are taking the position based on what they have been told by SBA that the 8 week cap on payroll still applies, you can just pick the 8 week period you use during the 24 week period. They don’t expect much to change on the application other than the specific period you are using.
Logically, it makes sense in that it is an extension of the time period but not an extension of measurement period. The law is not specific after thinking about it, but I haven’t had a chance to reread it.
They did say most of their SBA contacts have said they don’t know, but the ones that have answered have stuck with 8 weeks.

Talked to my banker today. He says his understanding is that the 24 months is the spend period, but that he is waiting for SBA guidance. Why would they extend the period if they were going to keep it at 8 weeks? Think about the purpose of the program. The purpose is to keep Americans employed.

[Chewbacca 7827]

Fuck every bit of that if it's true. I've not read anything of the sort. 

I think those are some shitty, overly conservative bankers.

[Brew 3049]

22 minutes ago, Chewbacca said:

8 hours ago, Brew said:

[mention=93]troph[/mention], if you’re doing any work on your trip, let me get your thoughts on this one. Had a conference call this morning with a couple of our bankers on the 8/24 week period. They are taking the position based on what they have been told by SBA that the 8 week cap on payroll still applies, you can just pick the 8 week period you use during the 24 week period. They don’t expect much to change on the application other than the specific period you are using.
Logically, it makes sense in that it is an extension of the time period but not an extension of measurement period. The law is not specific after thinking about it, but I haven’t had a chance to reread it.
They did say most of their SBA contacts have said they don’t know, but the ones that have answered have stuck with 8 weeks.

Read more  

Talked to my banker today. He says his understanding is that the 24 months is the spend period, but that he is waiting for SBA guidance. Why would they extend the period if they were going to keep it at 8 weeks? Think about the purpose of the program. The purpose is to keep Americans employed.

They got their guidance from the state SBA rep and this was reps from several banks on the call not one shitty over conservative banker. I wouldn’t be posting it if it was one random guy giving me his opinion. One of the bankers forwarded me the email string confirming it. 

The SBA rep told them they have gotten very little guidance, but this was the view in his office at the moment. The 24 week period was set out to allow those that were having trouble getting back to full employment or even open more time to get there. They would also allow the property expenses for the 24 week period which is why the percentage dropped to 60. He expects guidance sometime next week.

After rereading the law and the extension bill just now, I don’t see it. 1106(b) clearly states that forgiveness is equal to the amount expended during the covered period for payroll cost. The covered period was amended to 24 weeks. There isn’t anything in the original bill that locks payroll to 8 weeks other than the covered period definition.

 

 

[Chewbacca 7827]

They got their guidance from the state SBA rep and this was reps from several banks on the call not one shitty over conservative banker. I wouldn’t be posting it if it was one random guy giving me his opinion. One of the bankers forwarded me the email string confirming it. 
The SBA rep told them they have gotten very little guidance, but this was the view in his office at the moment. The 24 week period was set out to allow those that were having trouble getting back to full employment or even open more time to get there. They would also allow the property expenses for the 24 week period which is why the percentage dropped to 60. He expects guidance sometime next week.
After rereading the law and the extension bill just now, I don’t see it. 1106(b) clearly states that forgiveness is equal to the amount expended during the covered period for payroll cost. The covered period was amended to 24 weeks. There isn’t anything in the original bill that locks payroll to 8 weeks other than the covered period definition.
 
 

Appreciate the info. We are all flying blind here.

[McFly 606]

It’s almost as if the government really doesn’t want any money back. Or does this just make all those required audits easier to process?

[Chewbacca 7827]

It’s almost as if the government really doesn’t want any money back. Or does this just make all those required audits easier to process?

The point of the program is stimulus to keep people employed. So no, they don't want the money back in this case.

[troph 25096]

They got their guidance from the state SBA rep and this was reps from several banks on the call not one shitty over conservative banker. I wouldn’t be posting it if it was one random guy giving me his opinion. One of the bankers forwarded me the email string confirming it. 

The SBA rep told them they have gotten very little guidance, but this was the view in his office at the moment. The 24 week period was set out to allow those that were having trouble getting back to full employment or even open more time to get there. They would also allow the property expenses for the 24 week period which is why the percentage dropped to 60. He expects guidance sometime next week.

After rereading the law and the extension bill just now, I don’t see it. 1106(b) clearly states that forgiveness is equal to the amount expended during the covered period for payroll cost. The covered period was amended to 24 weeks. There isn’t anything in the original bill that locks payroll to 8 weeks other than the covered period definition.

 

 

The last part of your comment - the 24 week period is the covered period is what I’ve been advising clients on. If that’s not the case I’m going to look like an idoit. And I’ll say the SBA has had a field day making shit up on the fly - 75/25, then the owners can’t pay themselves more than last year subject to a cap either way that’s actually below 100k if my math is right. They’ve delayed on rules to the point that everyone is flying blind. One of the most important economic agencies in the government at one of the most important times in modern times for government aid and they are proving to be the worst of the fuck ups.

[Chewbacca 7827]

On 6/13/2020 at 9:44 AM, troph said:

The last part of your comment - the 24 week period is the covered period is what I’ve been advising clients on. If that’s not the case I’m going to look like an idoit. And I’ll say the SBA has had a field day making shit up on the fly - 75/25, then the owners can’t pay themselves more than last year subject to a cap either way that’s actually below 100k if my math is right. They’ve delayed on rules to the point that everyone is flying blind. One of the most important economic agencies in the government at one of the most important times in modern times for government aid and they are proving to be the worst of the fuck ups.

I thought the owner cap was $100k as long as you made at least that much in 2019?

[4th and 5 4997]

Nah. It’s 100k/52 x 8 = 15385 weekly forgiveness even though your monthly figure for the application was 100k/12  x 2 = 16666

I need to remember to unpay myself 1281 but right now I have zero fucks to give