Payroll Protection Act

You're eligible for the loan if you have fewer than 500 employees so the question is what business entity employs the crew. They would be the ones applying for the loan.

Now, understand the loan can be used to pay the employees up to it's limits but payroll costs must be 75% of the loan's use.

We are not eligible because we pay all our employees from one entity and by SBA rules, even though separate businesses, because it's one ownership, they're treated as one. We have well over 500 employees.

Yes, I'm saying that if one person owns multiple businesses, when the SBA considers eligibility, they count all those together.

Now, I don't see the SBA approving a loan for your boat as a business unless it's a charter boat. Understand this act processes the loans through the SBA.

Whether something is a business of not varies based on the specifics and who is asking. For payroll tax purposes, the boat LLC is a business. For IRS purposes it is not. For SBA definitions of a Small Business, it is not unless some other specifics quality it.

So, unless more is tied to it, I see no way of using your boat for a loan under this program.

While timing is a problem, any crew you have earning $45-50k or less can actually come out better on unemployment. The normal pay from unemployment is changed under current programs. However, states do not generally have the new program in their systems so a lot of chaos.

One problem is that we read of these programs but then the details are not nearly as good as hoped. We definitely overcomplicated our responses. A far simpler approach would have been a program to require all businesses to continue to pay bills and payroll and to provide funds to the businesses to allow them to do so.

OB, I am far from an accountant or attorney but I just read the latest Kiplinger Newsletter (Business newsletter) and it says “some firms with under 1,500 workers may qualify” for the payroll protection program. Not giving you much to work with but don’t know if it is worth looking into. Good luck.

Primarily restaurants and hotels and franchises. We've looked at every option. Franchises gives us a few businesses that qualify. Then what about a franchise that is granted from a company we own. So some room.

Really wish we could trust that politics aren't at play in this roll-out. People need money in their pockets yesterday, not next month.

Well, in rolling out the loans, there are two main things in play. First, just announced before any of the work on it was complete. Banks getting applications but don't have clear understanding of rules. Second, made to sound like more of a panacea than it is. Yes, can be used for rent and other things, but 75% must be for payroll. Well, with most businesses expenses only running 25% or so payroll, it means you don't get credit for the majority of expenses. For many businesses, not enough to help survive.

there is so much moral hazard in this program I don’t know where to start. The long term effects of this will be worse than the help for the current Crisis.
If I lose my job I should get a check, if I can’t make payroll- gov check, I don’t have healthcare- gov healthcare, I don’t have money for cellphone-Obama phone. Where does it stop.
Most business owners I know are applying. It is tough to turn it down, just like a write off.

Very few of us were alive for the great depression and none of us can remember the crash of 1929. However, in some ways this is harsher and more extreme than the depression, just hopefully not as long lasting. Business owners apply as the choices for many are either to borrow that money or lay all employees off, forcing them to apply for unemployment. 31% of renters didn't pay their April rent on time versus a norm of 18%. Millions are worried about May and whether they'll get unemployment funds by then or not. 50% of commercial tenants didn't pay April 1, many not legally obligated and others debatable. There have been many deaths by those who knew they couldn't afford the hospital visits and didn't know they wouldn't have to. It's like always where finances make some people wait too long but so visible in this situation.

Every day we each face decisions and challenges that are new to us. It's easy to theorize about handling them but when we face them directly it's hard. We have 365 leases and we paid all of them in full and on time but asked each landlord to contact us to discuss. Some were incredibly forthcoming and more than reasonable, others were decent and honorable. There are a few we haven't been able to reach and a few others that have taken hard stances not appropriate in our minds and also not legally supportable. We simply hoped for sharing of the cost. A landlord with no debt could hopefully be happy covering their expenses. Landlords with debt were generally granted leeway to pay only interest for the present and so could reduce.

We gave each the chance to tell us what they thought was appropriate. Our largest in terms of dollars asked our CEO before making a suggestion to her if she'd talked to our attorney. She said yes. They then asked what our attorney said and she told them that we had no obligation to pay once they closed the malls. Then they said, "and knowing that you still paid?" So we easily agreed on payments that we could both live with, not what the lease said we could do. Another large landlord quickly said what they needed to cover expenses and another quickly suggested half rent. Funny, the larger ones were also talking to us about renting additional spaces as they knew they'd lose a lot of tenants. Then there were a few who we haven't been able to reach and a couple who said all rent was due and otherwise they'd evict. I listened to a recording of Jenn with one who took that line. She said then they'd just have to wait and see what happened May 1 then and meanwhile since our lease expired August 31 see if we took our renewal option or not as there were going to be plenty of empty spaces at discount rates and we would definitely remember this. That was an individual owner who has no debt on the strip center. We can pay, but we know many of the tenants won't be able to. If he plays hardball, it will have a lot of empty spots and won't be somewhere we want to be.

We're paying all employees but at what point do we lay off the majority and let them apply for unemployment where they can get paid as much at no cost to us? Well, right now the state can't even process the claims and doesn't know how to handle the new program so not putting them in that.

First time I've worked full time in years. Did for about ten days after Irma but that's it. Every day we work with our management team to assess the situation and create various alternative plans. We are on pins and needles each day as we have over 3000 manufacturing employees working making gowns and masks. We fear that call telling us one has Covid 19. They're all working on a volunteer basis, but we still feel responsibility. We know the type people they are as we were paying them whether they worked or not but they enthusiastically wanted to do this. They didn't know that we'd pay them extra at the time.

Great Post, OB

Tough for the banks to process. Tough for the banks to execute and fund. So many federal regulations in the way relative to structure like Dodd Frank, uncertainty with regards to federal guidelines and guarantees, secondary funding to support the banks, reporting criteria, loan tracking, and actual processing of the loan to grant forgiveness, risk assessment of the relationship between bank and government. Lots of weeds here that are slowing this all down to a crawl. Loans have been processed and submitted. Funding timeline remaining very uncertain.

Meanwhile businesses are trying to weigh their own risk. How do they process this? How do they survive with all of the other overhead issues not addressed? Who is being paid in the business to be the guardian of this program, to assure that the forgiveness will occur? Can the business cut a pay rate by 25% and still outbid the unemployment value, thereby retain the staff at a success rate that allows for the forgiveness? Lots to consider, and days are flying by with regards to bill payment.

It's all extremely slow, painful, uncertain. Much of that is driven by our own clumsy bureaucracy and lawmaker/rulemaker ignorance in terms of understanding the challenges on Main Street.

Meanwhile the seas are eerily calm and inviting.

On employees making less than $45-50k, unemployment will equal their normal pay or be greater. That is, if that part of the bill ever gets in effect through the states. Definitely FL has no idea at this point as to how to handle it or when. Other states I've checked are equally lost. Easy for congress to pass bills but we seem incapable of actually executing the programs.

Now this program is also supposed to allow you to retain those who go on unemployment. It does not require them to look for or take other jobs, fully available to restart with you.

Gulfer….you may be eligible for the Employee Retention Credit.

I am thinking they will compare 940s and as long as your payout of payroll is x dollars then you are good. Not sure how they can actually track each individual employee, some may leave for other reasons. Very confusing. I got word today mine was approved. Not sure when money comes but this gave me the nod to continue with a building expansion I was going to put on hold. Would love to do my part to keep the economy going.

I applied with my bank on Monday by completing the application. Had to download 52 weeks of payroll reports in support of the application for my 135 employees. Some follow up questions today. Let's see where it goes. I hope and pray that this ends soon snd we as a nation and the human race heal from this terrible illness. Without being political and just stating a fact, both George W. Bush (in 2005) and Bill Gates (over the last decade multiple times) warned of such a pandemic and we did nothing. I don't know if there were others. Sad. Stay healthy and safe everyone

I have 9 employees. I business bank at Wells Fargo. I did not furlough or lay off any employees, that is the spirit behind Senator Rubio's Payroll Protection Plan (PPP) and it is my intention to take care of my employees, it's a culture thing with me.

I do Optometry, I am seeing one or two patients per day with more urgent symtomatic concerns. My state is shut down, no revenue. By the way, Telemedicine at about $13 to $38 reimbursement once a day is not revenue

Like OB said, even with the extra $600 temporary Federal unemployment benefit, the ability to even get through to State unemployment has been a tough deal for many.

As of today April 11, 2020 Wells Fargo has not allowed me to even apply for the program. I am in the Queue as they say. My other equipment lenders has stopped taking applications.

Vendors have extended terms for 30 days...

Not much help out here, really.

As for landlords, so far, our CEO, me, has not recieved a response from our very large multiple state strip mall landlord. The strip mall is not shut down, Safeway is fine. Gym, salons, phone stores, burger joints, dentist, optometry not so much.

Yes, it's a completely separate program that give payroll tax credits of up to $5000 per employee based on payroll of up to $10000.