Anybody understand the SBA's Paycheck Protection Program (PPP)?

[Cobalt232]

We just talked with our bank (Farmers & Merchants). They have submitted their paperwork for this program, so they can get approved to do these loans. The bank said they will be sending out packets tomorrow with the application etc. It seems the rules are changing hourly. Looking at the bullet points of the program, it seems like a no brainer not to apply. 2.5x monthly payroll is some serious $$$ at .50% interest rate.

One thing I don't understand is are we supposed to be paying the employees we have furloughed, or that have decided not to work? It doesn't seem fair to the employees that have stepped up and are working graveyard or weekends so we can reduce the headcount at any one time. A lot of our employees have really stepped up in this situation. We explained to our senior people 2 weeks ago that they would continue to get paid, but us, the owners would not.

We are trying to reduce work as much as possible by stopping our Google ads, asking customers to delay orders etc. The big highlight of my day was being able to order Clorox Wipes from Amazon. With all the extra cleaning, we are going through wipes and gloves like crazy.

 

[LakeMead Boater]

We just talked with our bank (Farmers & Merchants). They have submitted their paperwork for this program, so they can get approved to do these loans. The bank said they will be sending out packets tomorrow with the application etc. It seems the rules are changing hourly. Looking at the bullet points of the program, it seems like a no brainer not to apply. 2.5x monthly payroll is some serious $$$ at .50% interest rate.

One thing I don't understand is are we supposed to be paying the employees we have furloughed, or that have decided not to work? It doesn't seem fair to the employees that have stepped up and are working graveyard or weekends so we can reduce the headcount at any one time. A lot of our employees have really stepped up in this situation. We explained to our senior people 2 weeks ago that they would continue to get paid, but us, the owners would not.

We are trying to reduce work as much as possible by stopping our Google ads, asking customers to delay orders etc. The big highlight of my day was being able to order Clorox Wipes from Amazon. With all the extra cleaning, we are going through wipes and gloves like crazy.

I am working with my bank on this as well. I don't have any furloughed employees, but from what I can gather, you're supposed to be paying everyone you have had on staff prior to March (forgot the exact date). So even if you were deemed "non-essential," you could still pay your employees and keep your payroll 75% or more from what it was. The amount can also be used for rent, utilities and mortgage interest.

You are right about things changing constantly. Apparently there is more info coming tomorrow morning.

Edit: as I was typing this, my accountant sent me an update with the Interim Final Rule

 

[Wedgy]

If you take the Money, I believe that LakeMead Boater is correct. SO confusing. Good Luck. Never so Glad to be Old and out of the workforce. What a ShitShow. Dad was Right. McArthur was Right. Live and Learn. Mfkrs...

 

[Rondog4405]

Waiting on my bank to release the application tomorrow... Chase that is.

 

[Done-it-again]

We just talked with our bank (Farmers & Merchants). They have submitted their paperwork for this program, so they can get approved to do these loans. The bank said they will be sending out packets tomorrow with the application etc. It seems the rules are changing hourly. Looking at the bullet points of the program, it seems like a no brainer not to apply. 2.5x monthly payroll is some serious $$$ at .50% interest rate.

One thing I don't understand is are we supposed to be paying the employees we have furloughed, or that have decided not to work? It doesn't seem fair to the employees that have stepped up and are working graveyard or weekends so we can reduce the headcount at any one time. A lot of our employees have really stepped up in this situation. We explained to our senior people 2 weeks ago that they would continue to get paid, but us, the owners would not.

We are trying to reduce work as much as possible by stopping our Google ads, asking customers to delay orders etc. The big highlight of my day was being able to order Clorox Wipes from Amazon. With all the extra cleaning, we are going through wipes and gloves like crazy.

My understanding if people are laid off/furloughed in your business you wont be approved..... This has me thinking its better to furlough the employee as they would get their same pay, and I'm not obtaining dept if cause who really knows if it will all be forgiven.

 

[LakeMead Boater]

My understanding if people are laid off/furloughed in your business you wont be approved..... This has me thinking its better to furlough the employee as they would get their same pay, and I'm not obtaining dept if cause who really knows if it will all be forgiven.

From what I understand, if people have been laid off/furloughed, you have up until June (again, unsure of the date) to rehire them.

 

[LakeMead Boater]

FYI, if anyone has a current SBA loan on their business, the government is going to pay your loan for 6 months...not defer, but pay both principal and interest. Make sure you have talked to your bank about that and they have turned off all ACH payments if you're set up that way.

 

[Done-it-again]

From what I understand, if people have been laid off/furloughed, you have up until June (again, unsure of the date) to rehire them.

Ok, makes better sense...

 

[lakemadness]

If you have the means, obtain counsel. I have 3 accountants working on this and a group of 15 business owners evaluating information as it comes in and sharing it. Similar to most situations in life, the informed and educated end up ahead. Nothing above that I have read seems to to be true. We have multiple businesses with apps teed up to submit tomorrow, unless things change.

 

[Bobby V]

My understanding if people are laid off/furloughed in your business you wont be approved..... This has me thinking its better to furlough the employee as they would get their same pay, and I'm not obtaining dept if cause who really knows if it will all be forgiven.

That's exactly what my boss told me the other day.

 

[Cobalt232]

Will be talking with our attorney/accountant (same person) tomorrow. I am guessing this will be a cluster with all the applications pouring in over the next few days.

 

[shintoooo]

FYI, if anyone has a current SBA loan on their business, the government is going to pay your loan for 6 months...not defer, but pay both principal and interest. Make sure you have talked to your bank about that and they have turned off all ACH payments if you're set up that way.

Do you know when you start paying back the government for the 6 month payments?

 

[RCDave]

*Average 12 month payroll costs × 2.5x (capped at $100k per employee)
*1% interest rate.
*6 months deferred p&I payments
*Ne fees
*No recourse
*No collateral
*No guarantees
*Minimum 75% of proceeds to be used for payroll
Up to 25% can be used for rent, mortgage interest, utilities

*Up to 100% loan forgiveness after 6/30/20 if certain employee retention benchmarks are met.
*any amounts not forgiven are amortized over th remaining 18 month of the 2 year term

 

[Checkmate21]

Any amount over $100,000 a year per employee is not counted as wages. Info is gathered from 2019 wages. RC Dave is correct, except, I believe the intrest rate is 1/2 of 1%

 

[paradise]

Correct .5% is what we have been told.

Forgiveness is for qualified use (payroll, lease, rent, mortgage) x [% of FTE vs last year (average FTE over a specific period last year)]. So if you got the loan for $10,000, used all $10,000 for payroll but only had 50% as many FTE as last year you would get forgiven $5,000. The forgiveness period is for an 8 week period only.

In the same situation but you still had all your FTE you would get 100% loan forgiveness.

You can also rehire employees to help your FTE ratio for the 8 week period.

 

[McKay]

Yes, we are all over it. But if you are told they have submitted your application I would question that. Tomorrow if the first day you can submit.

 

[LuauLounge]

Our bank is Chase and they had planned on taking apps starting tomorrow. Got an email this afternoon that they need further information and will let us know when the apps will start.

 

[RCDave]

Any amount over $100,000 a year per employee is not counted as wages. Info is gathered from 2019 wages. RC Dave is correct, except, I believe the intrest rate is 1/2 of 1%

It's been a moving target. It started at 4% for 5 or 10 years. Then went to .5%. Last I heard it was 1% for 2 years.

Lol.....

 

[J DUNN]

Yesterday morning I emailed my book keeper/office manager and told her we are sending in our app on Friday if not with our bank then we'll find another bank that will take the app. I ccd the VP at our bank! Funny enough by afternoon I had an app in hands and told to fill it out and turn in asap. I had it done this morning and submitted it. Seems like he DOES value our relationship.

I have heard that banks are forcing appointments to accept apps so they can pace out the work. My bank is one of the ones named above. They will definitely pick and choose who they want to take care of on this. I also read on one of the info sheets, not from my bank, that sole proprietors and self employed have to wait a week longer than businesses/corp.'s, that their app date set by feds isn't until the 10th .

We are construction and have laid off a couple people but will have them back next week, just had a brief slow patch. The real damage to us will be in 6 months when the dust settles and the market is still recovering and nobody wants to expand and use capital, if they even have it.

 

[J DUNN]

It's been a moving target. It started at 4% for 5 or 10 years. Then went to .5%. Last I heard it was 1% for 2 years.

Lol.....

I think that is for the EIDL Economic Injury Disaster Loan (4% for 5-10 years). That is a separate program from the PPP. Both are from the CARES act but serve 2 different puposes.

 

[J DUNN]

Anybody hear the press conference when Trump was asked what about all the un-documented workers, that it appears none of the aid will help them. His reply was basically, Yeah, tough, and there will be a lot of citizens who will not get all the relief they need, this will be hard on everybody. I was shocked. I agree, but was shocked. AND, there will be a LOT of un-documented workers that will benefit from these businesses getting the aid.

 

[LakeMead Boater]

Do you know when you start paying back the government for the 6 month payments?

6 months from this month. Unless you deferred your payment, in which case it starts from 6 months to whatever the deferral date is, I believe.

 

[Riverbound]

Spent the morning on confrence calls with bankers and HR experts to make sure we are compliant. In a nutshell 75% goes to payroll and 25 can go to rent, mortgages utilities. We haven’t had to lay-off anyone. Yet.

 

[LakeMead Boater]

I think that is for the EIDL Economic Injury Disaster Loan (4% for 5-10 years). That is a separate program from the PPP. Both are from the CARES act but serve 2 different puposes.

the EIDL is 3.75% and up to 30 years.

the original PPP was supposed to 4% for 10 years for any part of your loan that was not forgiven. That was changed tonight, when it was changed to 1% over 2 years, but 6 months deferred payments.

 

[RCDave]

the EIDL is 3.75% and up to 30 years.

the original PPP was supposed to 4% for 10 years for any part of your loan that was not forgiven. That was changed tonight, when it was changed to 1% over 2 years, but 6 months deferred payments.

This...

 

[DLC]

Wife is a banker and she is all wigged out this is going to be a shift show! She is still in the home office trying to get traction for tomorrow

if you have a good relationship with your bank you get somewhat good service. This is like free money! Tonight my wife doesn’t have any loans to close but tomorrow she already knows she has over 200.....

No pressure!


the idea is to keep your employees on payroll to lessen the burden on unemployment and get back to normal business ASAP, what the new normal is... well that will be decided down the road

good luck

 

[ChumpChange]

Wife is a banker and she is all wigged out this is going to be a shift show! She is still in the home office trying to get traction for tomorrow

if you have a good relationship with your bank you get somewhat good service. This is like free money! Tonight my wife doesn’t have any loans to close but tomorrow she already knows she has over 200.....

No pressure!


the idea is to keep your employees on payroll to lessen the burden on unemployment and get back to normal business ASAP, what the new normal is... well that will be decided down the road

good luck

Yep. It’s crazy right now. Just walked out of my office. Been getting everything ready the last couple days for it to all crash tomorrow with submission.

Final info came out around 7 or so this evening. Good times.

 

[DLC]

to expand even more if most people who were working continue to get a paycheck then everyone will be able to pay rent and buy shit tickets and Vodka and utilities

some people will try to scam the system and with a w2 for next year they will hopefully be held accountable if they choose to be irresponsible

to keep things moving everyone needs to keep moving forward, marching along like the cattle we all are at the moment

 

[CigAjerk]

Spent the morning on confrence calls with bankers and HR experts to make sure we are compliant. In a nutshell 75% goes to payroll and 25 can go to rent, mortgages utilities. We haven’t had to lay-off anyone. Yet.

Same here. We'll see what tomorrow brings.

Good luck to all who need the help but I really don't think any of this is enough unless they uncorked their cork real quick.

 

[SOD]

FWIW - This looks like a pretty good summary. It really looks ripe for fraud though.

 

[ChumpChange]

Application still changing. lol