QB Winery Solutions

PPP Forgiveness Application Update #3,248

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8/15/20

Go to this post for the most recent update PPP 8/15/20 Update

6/24/20

The Treasury announced another significant update: if you pick the 24-week period, you may submit your forgiveness application as soon as you spend the funds. Read Alan Gassman’s article on Forbes.com

6/16/20

If you have been focused on re-opening the tasting room and missed some of the recent PPP updates, here is a summary:

  1. May 15th, The Treasury issued The PPP Forgiveness Application  (click here to download).
  2. June 3rd the Senate passed what is known as the Flexibility Rule which added the option to extend your loan to 24 weeks and to lower the requirement of payroll expenses to 60%.
  3. June 12th, the latest of 7 Treasury clarifications or rule changes called IFR. This one is titled “Interim Final Rule on Additional Revisions to First Interim Final Rule,” I kid you not. Don’t bother to read this… It’s just an example of what I have to read to stay on top of this.

Changes have come out faster than I can summarize them. Fortunately, I found a great resource on Forbes.com. Alan Gassman and his team of CPAs and Attorneys have been able to write articles within days of each major update and they give free webinars. Their information is written for the layman and other masochists who have been following the PPP Loan Program.

If you happen to be new to this, then you have a lot of catching up to do. If you have not applied yet, the deadline to apply is June 30th. Do not procrastinate.

Here is my summary of some key details:

  • If you are close to full forgiveness with the original 8-week covered period, then submit it now and get back to your life.
  • Alan says: “When in doubt, pay it out.” There are several loopholes and law changes. The payment must clear the bank before the end of your covered period. If you are using Bill.com or a bill payment service, the date of your payment to the service will suffice.
  • There are several loopholes:
    • If you have an FTE reduction or a payroll reduction, you can use non-payroll expenses to eliminate those reductions. This is because of some some weird math on the Forgiveness Application. The best way to use this loophole is to pre-pay your rent. You have to pay it anyway, so again, When in Doubt, Pay it Out.
    • If you laid off some tasting room staff before your covered period and never brought them back, any payroll reduction for those employees is ignored because you don’t even list them on the worksheet. This is an example of how the Forgiveness Application does not follow the spirit of the program, but the instructions are clear.
  • There are many new exemptions to the FTE calculation that allow you to add back most of your crew. Since you were required to close your tasting rooms by law, this exemption applies to those employees. You all should have 100% FTE Reduction Quotient (which means no FTE reduction).

If you have more than a few employees, I recommend that you purchase the excel workbook that this team created for $179. They have videos to walk you through it, they update it when there are changes in the law, and they give you a money back guarantee. Go Here to Purchase. Trust me, this will save you a lot of heartache.

Good Luck!!

 

PPP Loan with Jeanette & Tyler, Part 5 – The Forgiveness Application

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On Friday, May 15th the SBA issued the Loan Forgiveness Application. I know that you are all eager to learn more, so Tyler Willis, CPA and I met on May 20th to chat about what we found in our first pass through this document.

In a nutshell – they answered a lot of questions that were up in the air, but they did it using probably the most complicated method possible.

Stay tuned for an update to our PPP Loan Tracking mini-course. Turns out 95% of the information you need for the Forgiveness Application shows up in the workbook. So I will show you where to find it and where to enter it on the application.

ADDENDUM 5/1/20: I am still working on the update to our PPP Loan program. One of the unique problems wineries face is the large number of part-time tasting room employees. This problem complicates an already complicated process, and that is what I am trying to address in my update. In the meantime, here is a really good article with a step-by-step explanation by Forbes.com GO HERE

This video gives a quick overview of the Forgiveness Application. I will have a more details and instructions in the PPP Loan Tracking mini-course

 PPP Loan Forgiveness Application

 

PPP Loan with Jeanette and Tyler, Part 4

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If you have received your PPP Loan funds and are now freaking out because you are faced with even more questions than you had during the application phase, then check out the latest conversation that Tyler Willis, CPA and I recorded on Monday, April 18th, the same day that the SBA began accepting applications for the second round of the PPP Program.

  • How do I maximize the forgivable portion?
  • The tasting room is still closed, should I pay my crew anyway?
  • What documents do I need to provide to my bank?

 

 

 USCC PPP Program for Independent Contractors

 

 USCC PPP Program for Independent Contractors

 

Tracking the PPP Funds

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Congratulations on getting this loan. Sadly, many people were squeezed out. The next step is to track the use of the funds so that you maximize the forgivable portion.

Stay tuned for more details, because we are still waiting for clarification of some rules.

Tyler and I had another conversation on Monday, April 27th. You can find it HERE

Also I will post a worksheet to help you track the use of the PPP funds.

In the meantime here are some things to think about:

  1. The 8 weeks will go by quickly, so plan now how you will use the funds
  2. Reach out to your lender to find out what they will be looking for. As we have seen throughout this process, every lender is interpreting the rules a little differently.
  3. Make copies of all bills and checks IRL and put them in a PPP Forgiveness folder. This will save you a giant headache later
  4. Open a separate bank account for these funds and document every transfer out.

PPP & EIDL Updates from the News

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If you have submitted an application and haven’t heard from your bank, congratulations you are now in the Black Box Phase. I have collected and curated articles about the Payroll Protection Program to keep you updated. Read on to find out why you are not alone.

4/23/20 The bill to re-fund the PPP program passed Congress today, and is expected to be official at noon on Friday. Hopefully you have more than one application already submitted, because this round of funding will go very quickly.

4/15/20 Here are the long awaited guidelines for the non-employee businesses (still no updates about the LLCs, however)

4/14/20 Are you looking for a bank to submit your application? Here are some places to look

4/13/20 Treasury.gov

  • PPP FAQ 4/13/20 Update with #22 to #25
  • Nothing useful for the small businesses
  • Nothing yet to clarify the Sole Proprietors, LLCs, and Independent Contractors

4/11/20 Treasury.gov

  • PPP FAQ 4/10/20 Update with #19 to #21
  • The 8-week forgiveness period begins with the disbursement of the loan
  • The loan must be disbursed within 10 days of SBA approval
  •   Treasury.gov 4/7/20 FAQs

4/11/20 US Chamber of Commerce Town Hall on 4/10

  • Town Hall meeting moderator from Inc.com said they are trying to provide help “through this ridiculously difficult time”
  • Listen to the 18 min mark
  • No new information about sole proprietors and independent contractors at this time
  • Submit your applications anyway and get in the queue

4/10/20 8:00 AM PDT North Bay Business Journal

  • A banker (with a smallish bank) describes their frustrations

4/10/20 5:30 AM ET Wall St Journal

  • “Very few business owners have successfully gotten the money”
  • The SBA loan portal is inadequate: “some banks [are] inputting borrower information manually” into the SBA loan portal which takes 25 to 75 minutes per application. The system crashes, and there was along outage last Tuesday.
  • As of Thursday, 550,000 loans worth $141 billion have been approved, but only a small portion has been disbursed to businesses
  • The EIDL program has had 4 million businesses apply, totaling $383 billion, but only $17 billion was allocated by Congress
  • Banks are reluctant to disburse funds because of the confusion over the format of the promissory note. This applies to “all but a handful of banks”

4/10/20 9:59 AM ET Forbes

  • 70% of the 30 million small businesses in the US have applied to the PPP
  • A little over 50% of the small businesses have applied for the EIDL but just 4% have been approved

4/10/20 7:52 am CBS News

  • Interview with owners of a micro-brewery in Maine with production and tasting room who got funded with PPP funds
  • Cautionary tale: Their loan was approved April 6th (the Monday after the rollout) but the bank was forced by the SBA to close all approved loans within 5 days. Unfortunately most of their staff works in the tasting room, which is still closed.
  • The owners had hoped to pick the 8 weeks after the tasting room opened. So most of the funds will not be forgiven.

  • Then we were required to close immediately. If things stay the way they are, we anticipate we will be eligible for very little forgiveness — if any. And that’s pretty upsetting….Before this crisis, we had about 25 people working at Rising Tide. We have laid off all but four of our employees. They are on furlough and we hope to hire them back, but it wouldn’t make sense for us to bring them back at this point because our operations are so dramatically curtailed

 

SIP Week 4 – What next for Your Winery Business?

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The shock of closing the tasting rooms, sheltering in place, and learning how to home-school your children should have subsided a bit. You have settled into a routine of baking, playing board games, and coordinating your mask with your outfit.

But you have a winery business to run. If you still don’t have the heart to tackle updating that cash flow projection ( which is still a top priority task), here are 2 suggestions for what to do while waiting for news about your PPP and EIDL applications.

Preparing your business for a post-pandemic world by Harvard Business Review

This has a nice, one page grid to help you organize your thoughts.

HBR planning grid

 

Where to start when you don’t know where to start by Predictable Success

8 minute video by Les McKeown, founder of Predicable Success (gotta love his Irish brogue … is he really filming in his bathroom?). Don’t panic when he first shows you his chart, because he whittles it down to one task for you to focus on. This is an area that the small wineries have an advantage and a strength compared to larger wineries … if they don’t get bogged down in whitewater.

PPP for Independent Contractors and Non-Employee Businesses

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Updated 4/29/20

So far, the focus of the discussion about the Paycheck Protection Program loan has been on the typical business that has employees who receive paychecks. There is another group of people who are eligible to apply for a loan. These include

  • Sole Proprietors who do not issue paychecks
  • Independent Contractors
  • Self-Employed Individuals

Many of you have not been following the discussion because you don’t think of yourselves as a business. The SBA and Treasury Department have always always included you in the regulations, however the details have been even more confusing than for the typical business. THAT SHOULD NOT STOP YOU FROM APPLYING (sorry for shouting, but you might miss out on some grant money if you don’t jump on it now).

In this video I review my recommendation for what records you should gather and how to complete the PPP application. And as with the other folks, you must line up a bank ASAP

Update 4/29/20

The SBA finally came out with specific guidelines on how these folks calculate their annual payroll. The key document is the 2019 Schedule C, line 31 which shows the net profit. (Yes, we agree, this is not a fair reflection on your real net profit, but this is what they wrote in the guidelines). If you have not filed your 2019 tax return, then fill out a blank Schedule C with the numbers that you will use on your return.

You will also need your 1099s and your bank statement that shows activity on February 15, 2020.

This report by the US Chamber of Commerce summarizes the guidelines

Tyler Willis, CPA and I discuss some details in the our PPP Loan Part 4 conversation

 USCC PPP Program for Independent Contractors

 

  PPP worksheet for non payroll applicants

  Paycheck Protection Program Application

 

PPP Application and EIDL with Jeanette & Tyler, part 3

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Tyler (Tyler Willis CPA) and I had our third discussion about the Paycheck Protection Program (PPP).  Listen in to find out why the application phase is the Wild West, and then the next phase, after submitting the application, is a Black Box. Last week there wasn’t enough time to handle all the phone calls and requests for information about the program. And this week we have had to hurry up and wait because the SBA and the banks were overwhelmed with applications.

We discuss:

  • What we learned about the PPP application process (It’s the Wild West)
  • What to expect in Phase 2 (It’s a Black Box)
  • What we know about the PPP for non-payroll businesses (For step-by step details Go Here)
  • Why you also want to apply for the EIDL (For details about filling this out see Part 2)

** Check out this post where I curate articles to keep you updated during the Black Box Phase UPDATES

 

  Treasury.gov 4/7/20 FAQs

  EIDL by US Chamber of Commerce

 

Paycheck Protection Program, part 2

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Tyler (Tyler Willis, CPA) and I met again to discuss the evolving Paycheck Protection Program (PPP) and other programs available during this unprecedented period. Here’s what we cover:

  • Why apply for both the PPP and EIDL
  • How to get the applications started
  • Locating a bank that handles SBA loans

Please navigate to these points in the video if you would like to jump straight to these topics:

1:30 PPP – Paycheck Protection Program

18:00 PPP application

28:00 EIDA – Economic Injury Disaster Loan Emergency Advance

31:00 EIDA application (We forgot to mention, on page 3 it asks for your industry. Your answer should match your NAICS from your tax return. A winery would be a “manufacturer”)

37:00 Other programs and options

SBA Website

 Paycheck Protection Program by USCC, April 1 version

 Paycheck Protection Program Application

Paycheck Protection Program, part 1

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I called Tyler (Tyler Willis, CPA) a few days after the Paycheck Protection Program (PPP) was announced. We touched on some of the very basic questions around the program. This is Part 1. Look for Part 2 in a few days. How can it help the winery industry?

The Paycheck Protection Plan is another program from the CARES Act (Coronavirus Aid, Relief and Economic Security Act) that was passed by Congress on Friday, March 27. The purpose of this program is to prevent widespread layoffs during the Covid-19 crisis. A key feature of this program is that you could get as much as 2 months of your payroll and a few other expenses paid through this program. This is a huge benefit for you.

This information is still evolving, so stay tuned for updates. (This recording was not planned…as you can see by my messy office …it’s still tax season…)

Go here for Part 2

Here are some additional resources:

SBA Disaster Programs – This is your main list of all the SBA programs available (there are other agencies with programs)

SBA Disaster Loan Assistance Online Application – This is the page I showed in the video. It is not the PPP program.

 Payroll Protection Program by SBE

 Payroll Protection Program by USCC

 

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