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

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Does the House have to sign off on the bill before you can (technically) begin the loan application process under the PPP? 

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2 minutes ago, Wally Pryor said:

Does the House have to sign off on the bill before you can (technically) begin the loan application process under the PPP? 

Why take the risk? It will get passed in the next 48 hours

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32 minutes ago, Wally Pryor said:

Does the House have to sign off on the bill before you can (technically) begin the loan application process under the PPP? 

They just did fwiw

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every news release/ commentary I've heard is urging businesses to submit paperwork ASAP, like, yesterday if possible.

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Just got word that our largest data center client is looking to go national with a few vendors.  We are on the short list.  Fingers crossed. 

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58 minutes ago, Wally Pryor said:

Does the House have to sign off on the bill before you can (technically) begin the loan application process under the PPP? 

I think if you’re going Care Act it’s going to be a couple of weeks.  I’m going to contact my banker. 

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4 minutes ago, VABuckeye said:

I think if you’re going Care Act it’s going to be a couple of weeks.  I’m going to contact my banker. 

Yup

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15 minutes ago, VABuckeye said:

I think if you’re going Care Act it’s going to be a couple of weeks.  I’m going to contact my banker. 

I've done so and it's 10 days or so, sounding like, for the PPP.

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38 minutes ago, Iceman said:

every news release/ commentary I've heard is urging businesses to submit paperwork ASAP, like, yesterday if possible.

Disaster relief loans are applied for through SBA application directly, payroll protection will be through banks. Our bank clients are telling us that it will be late next week before they have an idea about what is going on and probably 30 days to really get going. Payroll protection is going to be where most will want to go.

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5 hours ago, closetojumping said:

Great stuff. A few questions:

1) Is it salary plus burden that gets to 2.5x or just the raw salary side? I’m talking about taxes and health benefits as part of the burden. 

2) Are rent payments also forgivable? Seems like rent and utilities, with utilities unexplained. I assume that’s water, electricity and gas, if applicable, but not high speed or janitorial services. 

3) I really don’t think I’ve seen a reference to the healthcare expense aspect as part of this for employers, so curious if you or anyone else has seen something different.

 

 

yes there is a burden component. fast look back at the senate bill - includes all benefits and state/local taxes.  doesn't include federal employment taxes.  caps out at $100K too.

yes all four categories are forgivable - rent, utilities, interest and payroll spent in 8 weeks up to the loan amount with an offset for layoffs, RIFs and reduction in wages more than 25%.

healthcare is considered part of payroll - including any sick leave, PTO, premiums, etc.

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54 minutes ago, Brew said:

Disaster relief loans are applied for through SBA application directly, payroll protection will be through banks. Our bank clients are telling us that it will be late next week before they have an idea about what is going on and probably 30 days to really get going. Payroll protection is going to be where most will want to go.

this is true.  banks are rolling out updates much like law firms, the real details are when the SBA sends information to the lenders and says, here's the program, in's, out's, etc.  in fact, a lawyer I work with regularly on the employment side and I were reading the bill and we think we found a technical bust in the math formula for the reduction in loan forgiveness for what is essentially covid related layoffs.  it makes sense but it's backward.  the word "by" should say "to"  not reduced by but reduced to.  anyway, it's quite possible the law doesn't get fixed and the SBA interprets it correctly (in my humble view).  that just makes the point that the real guidance and details of the program are not yet out, and that's the purview of the SBA and that will take some time.  they have 15 days per the bill to get the program rolling.  and banks I'm talking to are underwriting now so they can be ready the second the SBA says ready, set, go.

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4 minutes ago, VABuckeye said:

Just an 8 week look back?

yes.  this is meant to over come what everyone hopes is a two month shut down.  that's it.  repayment is over 10 years after the forgiveness amount is settled.

the advantage of the disaster loan is there aren't so many complexities and you can get it to the amount of your economic injury but it's not forgivable, just favorable repayment terms.  though you do have to pledge collateral and put up a PG.  NOTE:  I don't think you can do both.  it's either/or.

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Posted (edited)

Is it an 8 week look back for the Care Act loan as well?   Sorry for the questions. 

Edited by VABuckeye

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4 minutes ago, VABuckeye said:

Just an 8 week look back?

yes.  this is meant to over come what everyone hopes is a two month shut down.  that's it.  repayment is over 10 years after the forgiveness amount is settled.

the advantage of the disaster loan is there aren't so many complexities and you can get it to the amount of your economic injury but it's not forgivable, just favorable repayment terms.  though you do have to pledge collateral and put up a PG.  NOTE:  I don't think you can do both.  it's either/or.

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24 minutes ago, troph said:

yes there is a burden component. fast look back at the senate bill - includes all benefits and state/local taxes.  doesn't include federal employment taxes.  caps out at $100K too.

yes all four categories are forgivable - rent, utilities, interest and payroll spent in 8 weeks up to the loan amount with an offset for layoffs, RIFs and reduction in wages more than 25%.

healthcare is considered part of payroll - including any sick leave, PTO, premiums, etc.

Thanks for your feedback.    

Guessing they don't work 401k matches into the calculation? 

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58 minutes ago, Wally Pryor said:

Thanks for your feedback.    

Guessing they don't work 401k matches into the calculation? 

I think they do.

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this is a complex bill but in some ways it's one of the best bailouts I've seen.  it's not near enough, but for what it is it's great.  I think the $100K limit isn't cool.  I also think 2.5 months isn't enough time. but the rest of it is solid. 

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7 hours ago, closetojumping said:

Great stuff. A few questions:

1) Is it salary plus burden that gets to 2.5x or just the raw salary side? I’m talking about taxes and health benefits as part of the burden. 

2) Are rent payments also forgivable? Seems like rent and utilities, with utilities unexplained. I assume that’s water, electricity and gas, if applicable, but not high speed or janitorial services. 

3) I really don’t think I’ve seen a reference to the healthcare expense aspect as part of this for employers, so curious if you or anyone else has seen something different.

 

 

RE: # 2

I saw one blog/website (wish I could remember the site) that had utilities including electric, gas, water, transportation, and internet among others.

Rent can be forgiven.

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36 minutes ago, troph said:

this is a complex bill but in some ways it's one of the best bailouts I've seen.  it's not near enough, but for what it is it's great.  I think the $100K limit isn't cool.  I also think 2.5 months isn't enough time. but the rest of it is solid. 

It's a stop gap. Consumer confidence is shattered and keeping people employed is our only hope to get our economy back in 2020. But I agree, it's a solid bill vs. what they could have done. 

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1 hour ago, Armybrat said:

They are talking like $4 Trillion more is on the table after this.?

We’re f-d if we get to that point. At some point the long term impact of this debt spending becomes a larger problem than the disease especially when they are leaving so many holes in what they are doing.

We’re initiating layoffs next week of our newer/lower level staff that will make more money on unemployment than we paid. It will buy us 60 days to see where we stand and still get employees back on the payroll by the June cutoff.

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Hey- are we getting payroll tax waived for employees and employers for the rest of the calendar year?
 

No.

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Posted (edited)
7 hours ago, Armybrat said:

They are talking like $4 Trillion more is on the table after this.?

Yes, in "part ii, there is a multiplier for the corporate loans of up to 10x. Big business and wall street made out huge and they will look to buy up many struggling small businesses.

Mnuchin called this a $6 trillion dollar stimulus, 2T now(dont expect to recoup) and 4t in part 2(expect to recoup). 0

Edited by pacman

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4 hours ago, pacman said:

. Big business and wall street made out huge and they will look to buy up many struggling small businesses

So same as the last 30 years then

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I have extended family who owns a sandwich shop in Austin. He said they we’re gonna go bankrupt.

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Yes, in "part ii, there is a multiplier for the corporate loans of up to 10x. Big business and wall street made out huge and they will look to buy up many struggling small businesses.
Mnuchin called this a $6 trillion dollar stimulus, 2T now(dont expect to recoup) and 4t in part 2(expect to recoup). 0

I believe you but do you have some links to provide so I can chase some of that down? I have several clients needing more.

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Anything about the next bill is conjecture at this point. The only legitimate discussion I have seen anywhere on any 10x multiplier is related to the current bill. The Fed could activate it’s emergency lending authority and use the boost in new money to leverage additional lending. Based on current reserves and other variables, it could result in a 10x multiple of dollars being loaned. However, the stipulations for borrowing are still the same.

For some real numbers, we’re probably off half a million in 2 weeks. I’m projecting that to triple over the next 2 week period. Most should be timing differences assuming everything gets back up and running, but it’s amazing the difference a few days/weeks can make.

That doesn’t even cover the mess that our multiple real estate portfolios are in. The banks have all gone interest only for 90 days which helps but I’m expecting virtually no rent coming in from non-firm owned property for a couple months.

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In case I wasn’t clear above the $100k threshold is “in excess” of $100k so companies with highly paid employees can get loans too.

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39 minutes ago, troph said:

In case I wasn’t clear above the $100k threshold is “in excess” of $100k so companies with highly paid employees can get loans too.

Ok that makes sense completely 

2 questions for the board:

1) Do you have to actually lose money in order to get this loan?  I’m asking for my boss on that one as I think he probably got enough revenue from before shit shut down to be better than q1 last year- but projecting out Q2 things might get dicey. If

you have to lose money how much and over what time period

2) I just started a new 4 employee business   February 18, 2020. My first payroll was February 29 and I’m total we’ve had 3 payrolls. Can I get in on this action?  How does one get in on this action- I’ve never done a business loan before because I have never had any interest in saddling my companies with debt- but if they are essentially giving away free money...

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3 hours ago, XYZ said:

I have extended family who owns a sandwich shop in Austin. He said they we’re gonna go bankrupt.

well they need to get in on this small business loan. take their average monthly payroll for the last 12 months. multiply that by 2.5. they receive that much $$. they do not have to pay back the money that they use the next 2 months on payroll and rent. it's really not a loan, but a grant.

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I'm in a similar boat. We're a startup but didn't start paying anyone till September. Can we average from September till now or is our average going to be dragged down by having to add all those months where we didn't pay anyone anything?

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Posted (edited)
5 minutes ago, blacklab said:

I'm in a similar boat. We're a startup but didn't start paying anyone till September. Can we average from September till now or is our average going to be dragged down by having to add all those months where we didn't pay anyone anything?

You use monthly average of January 1 to February 29, 2020 to figure yours out.

*wait, that is for people that were not in business from Feb. 15 to June 30, 2019. Sounds like you were in business but not paying anyone. not sure about this.

Edited by po elvis

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22 hours ago, Dbeasy said:

Ctj one problem with the Care act is limited or no help for resources making over $100k. I have too many engineers, etc for it to help that much.

This was my initial interpretation as well when I read it, but our accounting expert says it is UP to 100k, so  it actually still could be really helpful for a chunk of change. 

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8 minutes ago, blacklab said:

I'm in a similar boat. We're a startup but didn't start paying anyone till September. Can we average from September till now or is our average going to be dragged down by having to add all those months where we didn't pay anyone anything?

I’m no expert but I wouldn’t think so at all. It would/should be a snapshot of your last payroll. 
 

also, as an investor, get that loan good sir!

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We're filling out the paperwork now.

And worst case for us is my partner and I get side projects to pay the bills and keep the salespeople going and we bounce back after this thing is over. 

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Is there paperwork to fill out for the Care Act online yet?  I thought it is just the regular SBA Disaster Loan documentation that is online to be downloaded currently?

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I have several spec homes sitting on the ground paid in cash. No business debt.  I'm going to be fucking pissed if I take a hit on profit because of this bullshit.  I don't qualify for assistance.  My one remedy would be to draw up on all short term credit lines, take the cash, and let them go.  Once the inflation hits, sell the homes and continue to operate in cash. 

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Quote

the term ‘payroll costs’—

(I) means—

(aa) the sum of payments of any compensation with respect to employees that is a—

         (AA) salary, wage, commission, or similar compensation;

         (BB) payment of cash tip or equivalent;

         (CC) payment for vacation, parental, family, medical, or sick leave;

         (DD) allowance for dismissal or separation;

         (EE) payment required for the provisions of group health care benefits, including insurance premiums;

         (FF) payment of any retirement benefit; or

         (GG) payment of State or local tax assessed on the compensation of employees; and

 

(bb) the sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment,

       or similar compensation and that is in an amount that is not more than $100,000 in 1 year, as prorated for the covered period; and shall not include—

      (aa) the compensation of an individual employee in excess of an annual salary of $100,000, as prorated for the covered period;

      (bb) taxes imposed or withheld under chapters 21, 22, or 24 of the Internal Revenue Code of 1986 during the covered period;

      (cc) any compensation of an employee whose principal place of residence is outside of the United States;

here is part of the act declaring what is considered payroll costs. question about the bolded part. if my programmer is an independent contractor, does this mean the money I pay him can be included in my payroll cost?

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2 minutes ago, po elvis said:

here is part of the act declaring what is considered payroll costs. question about the bolded part. if my programmer is an independent contractor, does this mean the money I pay him can be included in my payroll cost?

Negative......

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Posted (edited)
1 hour ago, 2300 Nueces said:

I have several spec homes sitting on the ground paid in cash. No business debt.  I'm going to be fucking pissed if I take a hit on profit because of this bullshit.  I don't qualify for assistance.  My one remedy would be to draw up on all short term credit lines, take the cash, and let them go.  Once the inflation hits, sell the homes and continue to operate in cash. 

There isn’t going to be any inflation you Twit- we might have to start dropping money out of helicopters and printing million dollar bills to avoid deflation. 

Also nobody wants to hear about how you are sitting on piles of cash and free and clear and don’t have a concern in the world other than you might have a bit of a profit margin cut. 

Seriously, people are beside themselves threatened with their very survival and that’s what you post?

Fuck off with that tone deaf bullshit. Go back to pretending you have the virus and  posting fake cures. 

Edited by Wulaw Horn

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Quote

(aa) the compensation of an individual employee in excess of an annual salary of $100,000, as prorated for the covered period;

This is bullshit.

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Posted (edited)
55 minutes ago, Wulaw Horn said:

There isn’t going to be any inflation you Twit- we might have to start dropping money out of helicopters and printing million dollar bills to avoid deflation. 

Also nobody wants to hear about how you are sitting on piles of cash and free and clear and don’t have a concern in the world other than you might have a bit of a profit margin cut. 

Seriously, people are beside themselves threatened with their very survival and that’s what you post?

Fuck off with that tone deaf bullshit. Go back to pretending you have the virus and  posting fake cures. 

Don't be an ass.

 

1.  There will be inflation but probably more in the form of stagflation.  It's the governments only route at this point.

2.  You don't know me, my partners, or my frugal lifestyle.  I drive an ugly old ass vehicle and it's paid for.  Most of my cash is in my business so cash flow is tight for me.

3.  The virus stuff is real.  My kids are now almost through.  We have immunity.  It's not my information.  I was passing along info from doctors in HK that was published on Pub Med.gov.

4.  I live what would be considered a rougher existence to most Americans.  Especially fellow Texas grads. but my buddies who used to make fun of me are now calling for money.

Edited by 2300 Nueces

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Care Act Loan Information

This is important.  It's the only criteria listed for a Care Act loan.

Quote

For eligibility purposes, requires lenders to, instead of determining repayment ability, which is not possible during this crisis, to determine whether a business was operational on February 15, 2020, and had employees for whom it paid salaries and payroll taxes, or a paid independent contractor.

 

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