re: Small Business Resource Thread COVID-19

(no message)

quote:

---

Is there an application or path already available this week for PPP? I know to check with local lenders, but I wasn't aware it's ready to go yet.

---

My banker told me they have been given a range of 5-15 days for the applications to be ready. She said she'd be surprised if they had them by the end of the week. Next week looks more likely. She told us to go ahead and get our numbers in order so we can be ready to go when the application drops.

We are going the 7b EIDL route since it's available now, and then seeing where the 7a PPP shakes out. Our bank is cool and giving us principle deferment for a few months plus giving us a bump on the credit line.

One thing my banker did stress to me is that you can't use your 7b to pay anything that you would pay with your PPP and still be forgiven, but at this point the details on what exactly is forgiven has not been inked. So who the frick knows.She also wondered how this was even enforceable/traceable, but that could become clearer as final rules are drafted. She mentioned our bank would most likely only loan what would be forgiven, and also only loan to existing customers.

quote:

---

my understanding is you can do one or the other at this time but not both.

---

You can do both but you can’t use them for the same expenses. Since the PPP only cover payroll, rent, interest and utilities you can still get the EIDL for other expenses.

I can't see any reason for a company not to do the PPP, if you plan on keeping your employees through this mess...in fact we might add an employee or two.

quote:

---

Just understand you cannot use their income to add to the loan amount.

---

But you can use them to meet the payroll requirement, especially if some of your employees don’t come back, etc.

Talk to her business banker. If her goal is to pay them for the remainder of the school year to retain them it would seem that she has as good a case as anyone.

quote:

---

1- Can she/employees file unemployment until the loan is obtained? Then go back on salary? I'm asking because she will have to do something to bring money to keep her lease and utilities going. (one is being a bit of a dick on the lease)

---

Depends on what loan. With the PPP loan, she will presumably have to keep the teachers on staff with no more than a 25% pay cut. Up to eight weeks of pay will be forgiven. It makes it tricky with teachers because of how their pay is set up. Are they on 9 month or 12 month pay cycles? If 9 months, then I'd think the 8 weeks would almost cover you. If 12 months, then that gets harder.

Utilities and rent are also forgiven by the PPP, but you essentially only have 0.5x of your 2.5x multiplier to pay those with. I know for me that's not enough because I have huge electricity bills running some factory equipment, especially in the warmer months, and the formula kind of screws me on that.

Go ahead now and apply for the 7(b) SBA loans and figure out the 7(a) PPP loans with your banker when they release all of the details. For our 7b loan, we are gambling to only take about 60% of our critical expenses because we are assuming we will still have some receivables trickling in. We have a backup plan, but we'd rather not go any more in to debt.

Set up the meeting now with your bank to get their feelings on the PPP and go ahead and pull together monthly payrolls, rents, utilities, and mortgage interests so that you're ready when the app drops.

Do you have to do the 7(a) through a bank? How is the bank making money on these? They are charging a fee? People are doing them themselves online right?

Edited: Is the PPP available for both 7a and 7b? I don’t mean can you get both together, I mean can you fill out the PPP online and/ or in a bank or just in a bank?