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Just listened in on Senator McSally's phone call regarding the Paycheck Protection Program

c_land

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If you are a business owner and trying to decide what to do if you see an impact from the Corona Virus, there is a loan program available as of today. The Paycheck Protection Program of the CARES act is a loan that the federal government is offering to help employers avoid layoffs. We are eligible for 2.5X 1 month payroll+utilities+rent, not to exceed $10 million and aims to cover payroll for an 8 week period. If we adhere to the rules that the program establishes, this will turn into a grant and is forgiven at tax time.

Senator McSally just held a call to inform business owners and answer questions about the program. Here are my notes:

Coronavirus Aid, Relief, and Economic Security (CARES) Act introduces the Paycheck Protection Program

  • Cares (?) Act signed into law just today 3/27
  • Anyone making $99k or less, a check is on the way for stimulus.
  • Boosting unemployment insurance
    • Expanded eligibility
  • Loans to small businesses
    • Recognize small businesses don’t want to take on debt.
    • NOT a SBA emergency disaster loan
    • This is deigned so we can go into any financial institution and apply
    • Intends to QUICKLY get cash to businesses to pay employees and overhead
    • Using existing avenues that some banks are already using; 7A lenders
      • This is going to be expanded to every institution
      • The banks will need to quickly get up to speed
    • This is going to come quickly
    • If we already laid off employees, incentivizes to bring some back and we get credit for it.
    • The portion of the loan that we use for pay roll and overhead is forgiven
    • Applies to payroll of employees that make up to 100k/year


Questions

  • Will loans be available to apply first and get money in order to bring team back?
    • These loans are intended to be distributed within 36-48hours of approval for use.
    • Looks back to 2/15 to get an idea of payroll costs at 2/15 and that will be the number used to derive a number
    • You qualify for money based on the payroll at that period.
  • Our business is okay, with increase to FMLA and sick time, can we use this money for the benefit of additional PTO burden?
    • No portion of the paycheck protection program will be forgiven if this is used for covering the additional FLMA requirements.
    • This can be used for the purpose, but will convert to a loan
    • This will be expanded through the year, so don’t feel like you missed the opportunity if you don’t apply now and then experience hardship and need the money later.
  • How soon to expect this program implemented?
    • ANY financial institution will be able to do this.
    • Banks with SBA 7A programs will have less time to implement
    • You can find this list on-line.
    • Executed and ramping up by the end of next week
    • The best thing we can do is reach out to our choice of bank and tell them we just got off this call and to get them ready. Be patient, but make the connection. Make sure when they are ready to execute that we know what to provide to get this going.
  • Loan amount based on 2019 payroll?
    • Will be based on previous 12 month average payroll.
  • Will business be able to rehire employees laid off?
    • Yes that is the intent
  • Any rent/landlord protections?
    • Provisions to provide relief to landlord, loosened requirements so financial institutions to make mortgage protections
    • Other forgiveness is based on the state/local level governments.
    • 120-180 day moratorium on evictions
  • When applying, would this be personal or commercial credit?
    • Not going to be a typical underwritten loan
    • They will look back to payroll/expenses
    • Make sure no applications are pending
    • You will use the load to maintain workers.
    • Your business has been impacted
    • No paperwork available, but no under writing process.
    • No fees, no personal guarantees, no collateral, no credit worthiness requirements
    • Banks are waiting on guidance from SBA before they can proceed, be patient.
  • Is there any portion of the application on-line as many banks are closed, are these first come first served?
    • Money will be added if they run out? (I would not count on anything a senator Says)
    • Applications will be administered by the institution.
    • Purpose is to make this as easy as possible.
  • If this close down extends beyond 8 weeks, what is the plan?
    • Additional guidance would be issued.
    • Plan for 8 weeks for forgiveness, remainder can be loan extended to 10 years.
  • We are listed as essential, are we eligible?
    • Yes all businesses under 500 employees who have been impacted qualify.
 

Xtrmwakeboarder

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Was on a webinar yesterday and they went over the PPP program. Glad to see it was passed. This is a solid idea and something I can get behind vs. a check to everyone.
 

pronstar

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I’m a business owner with no employees.

Can I get this to cover my overhead/hard costs?

Like asset/equipment payment etc?


Sent from my iPhone using Tapatalk Pro
 

Joker

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Nothing beats free equipment 👍🏻
 

jet496

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I'm not sure that I would qualify being an HVAC company unless I'm reading it wrong (see below from the CARES Act requirements):

The CARES Act provides that this regulation is waived with respect to eligibility for a covered loan for:
  • any business concern with not more than 500 employees that is assigned a NAICS code beginning with 72;
  • any business concern operating as a franchise that is assigned a franchise identifier code by the SBA; and
  • any business concern that receives financial assistance from a company licensed under section 301 of the Small Business Investment Act of 1958.

Industries:


To be covered by the first exception outlined above, the business concern must be assigned a NAICS code beginning with 72.[5] Below is a list of industries with a NAICS code beginning with 72.
  • Hotels and Motels
  • Casino Hotels
  • Bed-and-Breakfast Inns
  • All Other Traveler Accommodation
  • RV Parks and Campgrounds
  • Recreational and Vacation Camps
  • Rooming and Boarding Houses, Dormitories, and Workers’ Camps
  • Food Service Contractors
  • Caterers
  • Mobile Food Services
  • Drinking Places (Alcoholic Beverages)
  • Full-Service Restaurants
  • Limited-Service Restaurants
  • Cafeterias, Grill Buffets, and Buffets
  • Snack and Non-Alcoholic Beverage Bars
 

C-2

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I'm not sure that I would qualify being an HVAC company unless I'm reading it wrong (see below from the CARES Act requirements):

The CARES Act provides that this regulation is waived with respect to eligibility for a covered loan for:
  • any business concern with not more than 500 employees that is assigned a NAICS code beginning with 72;
  • any business concern operating as a franchise that is assigned a franchise identifier code by the SBA; and
  • any business concern that receives financial assistance from a company licensed under section 301 of the Small Business Investment Act of 1958.

Industries:


To be covered by the first exception outlined above, the business concern must be assigned a NAICS code beginning with 72.[5] Below is a list of industries with a NAICS code beginning with 72.
  • Hotels and Motels
  • Casino Hotels
  • Bed-and-Breakfast Inns
  • All Other Traveler Accommodation
  • RV Parks and Campgrounds
  • Recreational and Vacation Camps
  • Rooming and Boarding Houses, Dormitories, and Workers’ Camps
  • Food Service Contractors
  • Caterers
  • Mobile Food Services
  • Drinking Places (Alcoholic Beverages)
  • Full-Service Restaurants
  • Limited-Service Restaurants
  • Cafeterias, Grill Buffets, and Buffets
  • Snack and Non-Alcoholic Beverage Bars

The way I read it, the new law says ALL businesses and I think the ones you identified-above are business would otherwise fall under "affiliation"/collective bargaining rules. Thus, those types of businesses are now exempt from the regular affilaition/union rules and are also eligible for the program.
 

530RL

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The way I read it, the new law says ALL businesses and I think the ones you identified-above are business would otherwise fall under "affiliation"/collective bargaining rules. Thus, those types of businesses are now exempt from the regular affilaition/union rules and are also eligible for the program.


I read it the same way. I think jet is eligible.

Even I am eligible.

I’m a business owner with no employees.

Can I get this to cover my overhead/hard costs?

Like asset/equipment payment etc?


Sent from my iPhone using Tapatalk Pro


There is some section I was reading last night for self employed “gig economy” individuals such as Uber drivers which are business owners with a single worker but no employees.

I’ll see if I can find it again but at first blush you might be eligible for some type of loan to be forgiven.

This is like a giant money tree.......
 

Wedgy

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I'm not seeing any mention of the $15 an hour Minimum Wage Bump for all Employees of the Businesses who participate in the CARES Program.
In that list above, looks like The Cure may be worse than Wuhan Coronavirus. For participation, Permanent doubling of the Federal Minimum Wage.
"Never let A good Crisis go to waste..." Expansion Nationwide of $15 min wage, is soon to follow. Seniors will be hit hard, and unable to keep up with inflation.

I'm sure that Employers won't have to pick up that extra Load for Unemployment Insurance, if, and when this blows over either, Right?
 

530RL

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For the up to 10,000 dollar payroll tax credit a business must show a reduction of 50% in gross revenue quarter over quarter to be eligible.

Still looking at the loan provisions......

Not shockingly, this thing looks pretty confusing and in places contradictory.
 
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