Here is the recording for Office Hours from August 25, 2020.
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Tracking the PPP Funds
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:
- The 8 weeks will go by quickly, so plan now how you will use the funds
- 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.
- Make copies of all bills and checks IRL and put them in a PPP Forgiveness folder. This will save you a giant headache later
- Open a separate bank account for these funds and document every transfer out.
PPP & EIDL Updates from the News
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.
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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
PPP for Independent Contractors and Non-Employee Businesses
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
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
EIDL by US Chamber of Commerce
How to calculate Full-Time Equivalent Employees
To complete the Paycheck Protection Program (PPP) application and to verify that you have retained enough employees, you need to calculate the “full-time equivalent employee.” Here is a quickie video to show you:
Here are the steps:
- Find the report with the hours for the date range
- Count the number of paydays in that date range
- Assuming your paydays are every other week, multiply the paydays by 60. Reminder: A full time-employee is 30 or more hours per week. For twice a month paydays, use 65 hours.
- Anyone who is salaried or works over the number of hours in Step #3 counts a a full-time employee.
- For everyone else, divide the actual hours by the number of hours in Step #3, then add these up. This is the full-time equivalent of all of your part-time crew.
- Add Steps #4 and #5 for your total full-time equivalent employees.
Paycheck Protection Program, part 2
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
Paycheck Protection Program, part 1
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…)
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
FREE Membership During Slowdown
Recently, we seem to have settled into a new ‘normal’ in dealing with the COVID-19 situation. My team and I empathize with your frustrations regarding being quarantined (even us hermits are getting cabin fever!) while managing the uncertainty surrounding what the future holds (3 weeks? 8 weeks?).
Even if you are not in one of the five states that have mandated closure of wine tasting rooms, small family wineries everywhere have watched their sales come to a halt. Sadly, this comes at a time when many of us have had to put our social lives on pause as well.
What are you planning to do with all of this extra time?
- Untangle that pallet of wine?
- Catch up on your filing?
- Take an eCourse that has been lingering on your ‘to-do’ list?
If option #3 is your FIRST choice, I have an offer for you:
We have created a new FREE limited time only club membership: The Copper Club. Copper Club members have access to everything on our website that was previously only available to Silver Club members:
- Our foundation course: How to use QuickBooks in the Wine Industry
- For the excel nerds: How to Calculate the True Cost of your Wine
- Our new course: The Costing Book Checklist
- Plus all mini-courses and ‘quickies’
Copper Club members may also post questions in the Forum. Our experts answer these questions. These are not crowd-sourced, so you don’t have to guess if the answer is correct!
If you’ve ever considered joining, this may be a great time to check out just a few of the benefits our Silver Club members enjoy year round.
Is your wine glass half full or half empty? We hope a limited time free membership makes it half full. Please share this post with your wine industry friends.