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I received several emails from clients this morning asking for clarification on an email sent from the Small Business Administration. The subject was "Update on Economic Injury Disaster Loan Advance."


I received the same email (see below) and have read through to see what the "update" is telling us. The announcement is that we finally have some details regarding the "advance" that has been promised from the EIDL. (Economic Injury Disaster Loan.)


Remember, we have been hearing about the "up to $10k" advance? The email states that this is determined by calculating $1000 per employee. These employees must have been on the payroll by January 31, 2020.


Note, the EIDL is a different loan from the PPP, which most of you have applied for. The SBA email discusses the differences between the two:


Dear Applicant,

On March 29, 2020, following the passage of the CARES Act, the SBA provided small business owners and non-profits impacted by COVID-19 with the opportunity to obtain up to a $10,000 Advance on their Economic Injury Disaster Loan (EIDL). The Advance is available as part of the full EIDL application and will be transferred into the account you provide shortly after your application is submitted. To ensure that the greatest number of applicants can receive assistance during this challenging time, the amount of your Advance will be determined by the number of your pre-disaster (i.e., as of January 31, 2020) employees. The Advance will provide $1,000 per employee up to a maximum of $10,000.

You may be eligible for another loan program, the Paycheck Protection Program, which is available through participating lenders.


To locate a Paycheck Protection Program Lender, please visit: www.SBA.gov/PaycheckProtection.

Information on available resources may be found at www.sba.gov/coronavirus. For more information on these services, please go to www.sba.gov/local-assistance to locate the email address and phone number for the nearest SBA district office and/or SBA's resource partners. On a separate but important topic, Steven Mnuchin, the US Secretary of the Treasury, announced some updates yesterday regarding the Economic Impact Payments (EIP) and when you should see the funds. While this topic is not part of your business or non-profit, it is another way cash will be coming to the majority of taxpayers. Mnuchin said that most individuals who have their tax returns refunded via direct deposits should have the funds in the bank by tomorrow (Wednesday, April 15, 2020) I suggest you check your personal bank accounts today and tomorrow morning. If the funds are not there, or you usually have checks mailed to you, or you typically have to PAY taxes, you may want to sign up for direct deposit versus waiting for a check to be sent (which could take months) Instructions are on the IRS website. (Some of you may have already received your funds) For details regarding the EIP, I pulled the following information from the IRS website:

U.S. residents will receive the Economic Impact Payment of $1,200 for individual or head of household filers, and $2,400 for married filing jointly if they are not a dependent of another taxpayer and have a work eligible Social Security number with adjusted gross income up to:

  • $75,000 for individuals

  • $112,500 for head of household filers and

  • $150,000 for married couples filing joint returns

Taxpayers will receive a reduced payment if their AGI is between:

  • $75,000 and $99,000 if their filing status was single or married filing separately

  • 112,500 and $136,500 for head of household

  • $150,000 and $198,000 if their filing status was married filing jointly

The amount of the reduced payment will be based upon the taxpayers specific adjusted gross income.

Eligible retirees and recipients of Social Security, Railroad Retirement, disability or veterans' benefits as well as taxpayers who do not make enough money to normally have to file a tax return will receive a payment. This also includes those who have no income, as well as those whose income comes entirely from certain benefit programs, such as Supplemental Security Income benefits.

Retirees who receive either Social Security retirement or Railroad Retirement benefits will also receive payments automatically. As always, please keep me posted on your status receiving PPP or EIDL funds so that we can properly account for the income and expenses.

A lot of information was provided in today's eblast. I hope it was helpful!


#STAYINBUSINESS!

 xoxo

Diane

  • Diane Padoven








(From an eblast I sent on April 3, 2020)


Seriously, I started this message yesterday morning. Every time I was ready to push the send button, there was another update or change from the government regarding the PPP loan, which meant my information was incorrect. I was literally watching yesterday's press conference when Secretary of the Treasury Steven Mnuchin announced the interest rate for the PPP (Paycheck Protection Program) was increased from .5% to 1% (still a smoking deal.) Then, late yesterday, the allowance for 1099 contractors to be included in the payroll calculations was removed. Now, there is a question if Owner's Draws are allowed.


The PPP loan application process has technically opened to receiving applications as of the morning. However, very few banks are ready. They have needed to create and then update their forms as often as I have updated this email.


The bottom line is that there are still several unknowns. And, we won't know for sure what the rules are until we see the application from whatever bank we are using to apply. Each bank will have its own form/application.


I suggest you follow the advice I gave you a few days ago and contact your business bank TODAY (if you haven't already done so) to see if you are eligible to apply. For example, most banks will not allow applicants who were not customers as of February 1, 2020. Bank of America announced today that only existing customers who have both a business banking account AND a B of A business credit card are eligible.


For more details on the latest requirements, I urge you to read the following documents that I pulled straight from the US Department of the Treasury's website:


Assistance for Small Businesses

The Paycheck Protection Program prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion toward job retention and certain other expenses.

Small businesses and eligible non-profit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards.


The information changes by the hour, so I will send updates as soon as they are announced. Also, the "Final Borrower Application Form" referenced above is just an example; again, your bank will have their own forms. Know that you will need to begin preparing the financial documents to send them...especially the payroll calculations. We need to wait to see the time frame your bank is asking for...some want the 12 month average from 2019; some want March 2019-February 2020. When you call your bank today, ask them if they have decided on the data they want used.


Also, you may have received an email from Quickbooks announcing that they are entering the PPP funding program. I will keep you posted as to when they launch.


From Quickbooks: Important update on the Paycheck Protection ProgramWe're committed to providing the relief you and your clients need. We're working as quickly as possible to launch a simple application and funding process for the Paycheck Protection Program directly within QuickBooks Online. This program is unique—these loans may not have to be repaid if certain eligibility requirements are met. The Paycheck Protection Program is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which consists of $349 billion in government-backed loans to help small businesses maintain their payrolls through June 30, 2020. Be on the lookout for more information about this program in the coming days.



FYI, I am the Introvert in the above meme. :)


Lastly, I want to spend a moment discussing the #STAYINBUSINESS! challenge I discuss in every post. This is your time to decide if your business is worth fighting for. The double threat of this horrible pandemic, plus the economic catastrophe, has many people so emotionally drained that spending their days eating and watching Nexflix is their coping mechanism. I get that. But, this is NOT the time for you to follow that path. I seriously am spending 18 hours a day trying to help my existing clients and random business owners and non-profit leaders navigate this period of time. Nothing frustrates me more than seeing all the negative posts on social media regarding the options that are out there for government assistance.


Here is my take. The government rolled out a $2.2 TRILLION relief package in a week. Were there details missing? Of course.  Are edits and changes occurring by the hour? Big fat surprise. But, you know what? I would rather this scenario than waiting months for something to happen. So to you, my smart and savvy clients: Do not sit around complaining. Figure it out. Yes, the PPP may now, with the updates, not be a perfect choice if you have few employees and high overhead. IT WASN'T DESIGNED TO. It is called the Paycheck Protection Program for a reason. To keep employees on the payroll. Other SBA loans are designed to help with the remaining business expenses...like the EIDL. Do your research and apply for the loans that work best for YOUR organization. 


So, ignore the noise. (I had to stop engaging on FB yesterday, people seem to be happier complaining about the government, than actually working the system (legitimately and honestly) to find the programs that will help them pay the bills.


Ok, off my soapbox. Please read the information provided in this email, contact your bank, get ready to pull your business formation records, and financial documents, and let's get going.


More emails to come!


Diane

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