Can you explain what a paycheck
protection program loan is?
So this is a loan to small businesses.
OK, or presumably small businesses,
although some really big
businesses got them and it's it's.
It's actually to take care of payroll.
Basically payroll in rent and
utilities for about 8 weeks. It's a.
It's an interim assistance to small
businesses who are trying to keep
their pay their employees employed.
Fully employed during a time when they
may not otherwise be able to afford to do
so. A new round of funding is
expected to be passed this week if,
when that happens, should
small businesses jump on that?
I think small businesses should be
already applying even before it happens,
because they need to get in to process
their loans into process so that they'll
be there and not be cut out again,
because who knows if this next round
of funding will be enough? $300
billion is. To you to set sound
a lot like a lot or too little,
can you speculate? But it doesn't.
I mean, consider that the
first round was 350 billion.
And that was exhausted in about a week.
So granted, the big companies
already gotten there so OK,
so McDonald's and Ruth's Chris
and those big franchises have
already received their money.
The question is,
will there be enough for the
little guys who don't really have
the strong banking relationships?
That's actually part of what they've
been discussing in Congress is.
What about all these small businesses,
independent contractors who don't
really have a good banking relationship?
How are they going to get taken care of
because they got shut out in the first round?
OK, well, for the little guys,
for the small businesses,
I'm sure a lot of them are
trying to figure this out for the
first time. What they need to
know. So here's what you need to know.
You need to get information together.
Most importantly is your
average monthly payroll.
So you need your payroll
reports put together.
You need to make sure that you have.
I would have your financial
statements together.
You need to have things like
your utilities and your rent.
Know what those are because the bank's
going to ask you for this information.
So let's get all the information
together now.
Meet with your CPA.
Get get their get their help to
get this information together and
then get in front of a bank that's
most important is get in front
of a bank as soon as possible.
Is
Speaking of that some business owners
have told us that a few major banks,
some of their banks aren't accepting
PPP applications. Can you speak
to that at all? Well, yeah,
what what happened was is that the big
banks went to their prime customers, right?
Like the big franchises and
they ran out of money.
So you know, the hope is is that
these banks now have some money.
But really, the smaller
banks my experience has been.
With our clients is that those who
have been working with the smaller
local banks have had much more success.
So if you have a small local bank or
regional bank, I would go in right?
Not going in, but I would.
I would get on the phone with somebody
right now and see if maybe you
could make a deposit in their bank,
set up an account somehow,
get started because the big banks
absolutely right the the big banks
have not cooperated and then nearly as
successful as the small local banks.
OK, so like that's one issue.
Is there any other issues that
might come up if someone's
doing this for the first time?
Well yeah, so another issue is
going to come up, of course.
Is that that you know
there's two sides of this?
One is the loan side where you
actually get the money and the
other side is the forgiveness side.
So the idea of the Paycheck
Protection Plan program is that yes,
you'll get some money up.
You'll get some money and you'll use it for
your employees and your rent and utilities.
But you also don't want to
have to pay any money back,
so you want to make sure
that you know what you're.
What 8 weeks? 'cause?
It's an 8 week period.
It's eight weeks.
Remember it's 8 weeks from
when you get the money.
That's when the eight weeks begins.
So as soon as you get the money,
you got eight weeks to spend
it and you really ought to be
considering how am I going to
properly spend that money during
that eight week period to meet all
the rules so that I don't owe money
at the end of the eight weeks?
If
you're approved, you get the money you great.
How do you triage what are like the most
important priorities for businesses?
So, so first of all,
recognize that 75%.
Of the money needs to go to payroll?
So you can hire employees back.
OK, you can even give employees a bonus.
You can't take money out yourself.
OK, except as you know,
except as an employee, right?
So you're probably an employee.
You can use it for utilities and rent,
but the utilities and rent portion
can only be 25% of the total.
So I would sit down what I found
most of my colleagues have done
Cpas as we set sat down with our
clients and actually scheduled out.
Exactly how they could use the money
and how that 75% requirement is
going to work in their business.
Are there any other
resources for small businesses that
I mean, obviously there's a lot
like what other things should small
businesses will be looking into
right now. Yeah, for sure.
So one of the other aspects of that of
the CARES Act that ran out of money.
Was this E IDL program,
which is the emergency injury defense alone,
and there's a $10,000 of that
that's forgiveable and that
you should be able to get.
Well, that you say quickly,
but the SBA has been pretty slow on it.
Well, that's $10,000.
In addition to the PPP loan,
so they have at their where
Congress is right now.
That looks like they're adding
another $60 billion to that program.
And that's a.
You know if $10,000 for a really small
business could last in two or three months,
so that's another one to
be looking into there.
Also, by the way,
there are also SBA loans
included in this whole package,
which includes the
$200,000 EIDL loan program,
which technically can go up to $2,000,000.
The SBA Express loan,
which goes up to $1,000,000
and then the regular 7A loan,
which even without the PPP
goes up to $5 million.
So there are other loans available
to help the small business,
but again you have to get
your information together.
You need to get in front of
a banker and you need to
do it now. Anecdotally,
have you ever seen anything like this
like we've been through recessions,
but I feel like everything has
happened so quickly.
You know what's really struck me is,
yeah, how can we be in this bad of
shape after less than two months?
I mean, it's frankly it's a little scary.
It tells you just how fragile our economy
is that after two months we have.
What costs close to 20 to 20% unemployment
after you know after two months?
You know, can can we really be this fragile?
Can you know we can't get stuff
out of China because we're so
dependent on China to get, you know,
basic supplies like like masks, right?
And gowns? Things like that.
So it's really a time.
I think that we need to look at it.
We're not going to change the global economy,
but we can change our economy.
So I think what to me, what a big lesson
here is look at your own business.
Look at your situation and say, OK.
How am I gonna survive?
Let's say this thing doesn't
just go another month.
Let's say it goes another year.
How am I going to survive this?
How am I going to keep going?
Right, and I'm sure a lot of
businesses that are in survival
mode right now, like it is.
What can they do like what?
What piece of advice
would you give them? What this is?
I've been telling people this is
this is the day, not just the year,
but the day of the innovator.
So if you can change the way
you think about business,
an actually look at the way people
are consuming right now, because
obviously people are still spending money.
They're still, you know,
most people still have a job.
So how can you change your business so
that it will encourage people to take
advantage of what you have to offer
an and do it from a remote standpoint?
So if you typically do things
people come into your business,
you've got to start doing things remotely.
If you're not connecting with your customers,
you need to figure out a way
to connect with your customers.
It may be that you've got current
customers that you need to connect
with a different way,
or it may be that you just need to
connect with new customers because.
Think about it a lot more people
are online these days than were
online two months ago,
and this potentially could
be a huge advantage for you.
Let's say
your employer you are you have a job in
your employer is applying for this loan.
Like is there anything they need to know?
Like as far as individual goes?
You know what there is,
and here's an interesting.
Little little interesting fact I I
actually have friends and clients
that they have employees who have been
begging them to be begging to be fired.
They say look, the unemployment is
really so good right now. I mean,
it's so much better than my regular pay.
I don't. I don't, you know,
I'd really rather be fired and be on
unemployment and in to those people.
I would say don't think you're
going to get your job back.
So I think employees ought to be grateful.
Frankly, I'm an employer,
so of course I think that,
but I think employers employees really should
consider that you know the short term.
Unemployment may be better,
but in the long term it's always
better to be working and working
in a place where you really enjoy
working and don't think that there
aren't going to be a lot of people
competing for your jobs.
Once this thing clears up a little
bit. OK, we've covered a lot of ground.
Is there anything I missed?
Anything like as far as just small
businesses goes well?
One of the things that I've
learned personally from this in
the last few weeks is that a lot
of times it's not what you know,
but it's who you know.
And so now is the time to
get your team together.
I mean, business is a team sport.
It's not an individual sport,
and you know getting your bank hurt.
You know this is an option.
Let's say you don't have a banker.
It's an opportunity to get to know it anew.
Banker, right establish that
relationship because you don't
know what's going to happen next.
You don't know what's going to
happen in the next few months.
So establish and maintain that relationship.
Same thing with your CPA,
your bookkeeper, your attorney.
I mean all of these people are
essential people to your business.
It's just that most business owners
don't really pay that much attention to
them except when they're in a crisis.
Well, now we're in a crisis now.
It's time,
even if your business is doing well,
it's time to get that team together
and make sure that you're you know,
helping your team members and
drying on them as well.