12. Roaster Experiences with PPP, EIDL and other grants

Today we'd like to share a few of the roaster experiences we've heard.

Small roaster in SE Michigan has 1 cafe and 15 - 17 employees. All but 4 of them were laid-off at the beginning of the crisis. This business owner (so far) has chosen to:
* Applied for the EIDL Advance grant (no word on that yet)
* Applied for a Wayne County small business emergency relief grant and was awarded a couple thousand from this fund. This was a great relief as it basically paid one more month's rent. Her landlord was unwilling to consider any forgiveness or delay of the rent schedule.
* Did NOT apply for the PPP. Finds the benefit may not be worth the hassle on a number of levels. Not sure about loan forgiveness. Not sure about rules regarding bringing back employees when she's not sure she can employ them safely. Not certain the 8 week forgiveness period is long enough for her to put them on payroll if they are not working.

What impresses me about this roaster, like many I have talked to, is the agility she has shown adapting very quickly to the changing situation. She innovated continuously for weeks, for example, creating a contact-free take out window and beefing up on-line ordering operations. After the store fully shut down, they promoted a weekend take-out event that was very successful.

Another small roaster, south of the Detroit metro area, has one cafe. They remain open for take-out with reduced hours staying open only from 8am - 1pm. On April 14 they launched a web-store for their bags of beans for the first time. The owner's daughter helped him get that launched. The owner applied for and received about $5,000 from the Michigan Economic Development Corporation's emergency fund which are state funds.

A roaster with two cafes, one in Detroit and one in a northern suburb, chose this path:
* Applied for the EIDL and have received the $10,000 advance.
* Applied for the PPP but have not received funds from that one (yet).
* Applied for city-level grants and successfully received funding from those.
* Has been able to make arrangements for some leniency with landlords.
This roaster commented that while his spending is way down now, he's only now getting through paying for bills incurred in March just before the "shelter-in-place" orders were issued.

A St. Louis roaster with three locations has one of them open for pick-up, 8am - 3pm, and the other two are temporarily closed. The situation is dynamic for them, as with everyone, but when we talked on April 7th, the status was:
* Applied for the PPP
* Still considering applying for EIDL and local business emergency grants.
* Considering other SBA loan programs, not just the emergency loans, to help the business expand.
I was struck with this roaster's determination to not give up on business development plans. Slow down, perhaps, but not give up! They also promoted a Saturday take-out event at a store that sold out three hours before they had planned to end!

A New York roaster with 20 stores across Manhattan and Queens has about 200 employees. All stores have been closed and all but a core team of about 5 - 7 people had to be laid-off, which was "devastating" they told me. On top of that, their head of human resources moved to a different company in March and has not yet been replaced. They are still roasting for their wholesale accounts and on-line sales. The representative I talked to was confident that all government programs were being considered for possible fit, but was not aware of which, if any, SBA programs were being accessed. He shared that the company was serious about offering all employees job security. They've sent repeated messages to the laid off staff that the company will hire them back as soon as circumstances allow.

We hope this summary of economic and business realities of different roasters gives some reassurance, "you are not alone"! Pull up those boot-straps!

8. LAAR webinars continue this week!

Sign up today for tomorrow's Loan Application Assistance for Roasters (LAAR) webinar!

Just click here for our contact page and send a message saying you'd like the call-in details!

LAAR Webinar - Tuesday, Apr. 7, 11 am EST. Use the CONTACT page to request call-in details.

Can't make it on Tuesday, join us...
LAAR Webinar - Thursday, Apr. 9, 11 am EST. Use the CONTACT page to request call-in details

The two webinars we held last week were uplifting, interactive sessions with the handful of roasters on the call. Everyone finishes the hour feeling more confident about the right next step for their business.

"I could have spent half an hour digging into some rabbit hole on a government website to get to just one tip out of the dozen good pieces of advice Artisan shared during this webinar." ~ Andrew Timko, Blueprint Coffee, St. Louis, MO

Can't make any webinars? Click here for easy resources from the SBA of Michigan (which is doing an excellent job of updating small businesses across the country).

7. MONDAY - Apr. 6 UPDATE for Roasters on SBA resources

Last week was a hurried run-up to the April 3 deadline for "banks to be ready" to start accepting Paycheck Protection Program (PPP) applications. (See this blogpost to learn about the PPP program.)

From what I've heard, some banks did start accepting applications on Friday but the federal SBA did not give final guidance to SBA lenders until Friday morning (Apr. 3rd). So the biggest banks postponed even accepting PPP applications until today (Apr. 6) or even tomorrow, April 7. I understand the big banks are creating website portals on which applicants -- LIKE YOU, IF YOU ARE A ROASTING COMPANY -- may use to apply for PPP funds.

See this blogpost for the "steps to take as a roaster." But here are some further tips given what we've learned in the last few days:

1. It is important to decide whether a PPP loan-that-turns-to-a-grant is right for your business. One roaster I talked to last week was thinking that for her small, single-location business, with 15 - 17 staff total, the Economic Injury Disaster Loan (EIDL) Advance grant, which is an $10,000 outright grant, was the best fit for her needs. (Click here to learn about the EIDL and why it has the confusing term "loan" in its name.)

2. If your bank is not an SBA lender already, this is a major obstacle. That is actually the case for my business. So first, as advised in the paragraph above, I applied for the EIDL. Then I started calling banks and institutions where I had relationships with an individual loan officer because I had applied for business loans at their institution. I asked if they would help. All three flatly said "no." They are only helping current customers, with a checking account. It is understandable.

• OTHER POSSIBLE OPTIONS for my PPP application and yours: 
• My credit card is with Chase. I called Chase customer service on Friday and learned they are one of the big banks which will only be opening their portal on Monday or Tuesday (today or tomorrow) and the service representative had no idea whether I'd have access as a credit card customer. (I kind of doubt it, but I will try.)
• A group called NAV serviced one of my student loans years ago and got in touch with me (by email) with links to their portal for PPP applications. Click here for their on-line application, but I suspect it is only for people that banked with them previously. My suggestion here is to broaden your search for a lender that will help you by even thinking about your student loan banker! In case it helps, check out NAV's SBA loan Facebook group . 
• A local SBA lending bank might consider taking your "non-customer" PPP application a week from now. I had one local bank in my town tell me this. This is nice, I must say, since 4 other banks flatly turned me down, but it is a tenuous offer and does not reassure me that my business would be considered before all the PPP funds are gone.

The key is persistence, as is so often the case as a small business owner!

Click here for easy resources from the SBA of Michigan (which is doing an excellent job of updating small businesses across the country).

3. Which is better for a Roaster - Economic Injury Loan or the new PPP?

The big news in the past few days has been the Paycheck Protection Program (PPP) coming out of the CARES Aid package. See yesterday's post to get an overview of that program. It is a loan that can be partially or totally forgiven (i.e. turned into a grant) at the end of the 8 week span, if (among other criteria) you document how all the proceeds were used and the bank verifies that all the expenses qualify.

Seth Chapman at Water Street Coffee Joint in Kalamazoo, MI

Roasters ask: "is the PPP better for me than an Economic Injury Disaster Loan (EIDL)?" Answer: Probably YES, because it can become a grant. But you need to make sure you understand how much of your loan will be forgiven at the end of the 8 weeks. If you are not able to hire all your employees back (your employees prefer the new beefed up unemployment insurance benefits), then you may be better off without the PPP.

Roasters also ask: "CAN I apply for both the EIDL and the PPP, or are they mutually exclusive?" Answer: Yes. In fact, I would now encourage you to do both, if you need that much money. As long as you do not apply the proceeds to the same expenses, you are allowed to apply for both. In other words, if PPP covers all of your payroll expenses for April and May, you cannot also tell the banker that you need the EIDL loan to cover payroll for April and May. Same for utilities, rent, etc.

• Bottom line: Apply for both if you can show that business expenses match the total amount for which you are applying.

Roasters also ask: "Is the EIDL a grant or a loan?" A: There is a new part of the EIDL loan program that is a grant. So it is both! The grant part is called an "Advance" or the "EIDL Advance." You fill out the application for the EIDL loan (using access on the SBA.gov website) and at the end there is a checkbox question asking if you want to be considered for the EIDL $10,000 grant. There's a chance that you qualify for the grant, but not the loan, and vice versa.

• Note: If you apply for EIDL and PPP and qualify for the EIDL grant portion ($10,000), this may just be given to you as part of the PPP. Bottom line, "go ahead and check the box for the EIDL grant" which is at the end of the EIDL loan application.

Today's Note for Michigan Businesses: Some Economic Development Organizations (EDOs) have closed applications for the Michigan Economic Development Emergency Relief Grants - which are $10,000 grants. Bars and restaurants were the target beneficiaries for these.

The main Q today: Which is better for a Roaster - Economic Injury Loan or the new PPP?
Probably the PPP (as stated above), but lets look at a comparison. The EIDL, as I understand it, is more of a traditional loan. Your banker (who is an SBA contracted bank) will require a guarantor (the PPP does not), there is not a "forgiveness option" (like the PPP is offering). The interest rate is low, one lender told me 3.75%, and it can be used for business growth investments. That is a key difference to the PPP. With PPP you will be forced to only use the proceeds for on-going business expenses: payroll, health benefits, rent, utilities, interest on pre-existing loans, etc. With the EIDL, you can use the funds for other parts of the business. See Table 1 for a summary.

TABLE 1: Comparison of PPP, EIDL Loans and EIDL Grants

	Funded by	Old or New?	Grant or Loan?	Where to apply?	Funds - proceeds	Max. Amount
Paycheck Protection Program (PPP)	SBA National	New	First a loan, can be forgiven on a sliding scale up to 100%	Applications will soon be available at banks that are SBA lenders.	MUST be used for qualified operating expenses, including payroll.	2.5 x the average monthly payroll
Economic Injury Disaster Loan (EIDL)	SBA National	Old	Loan	Access application on-line at SBA.gov. (Or ask Artisan) Submit to an SBA lending bank.	May be used for a variety of operating expenses. Less restrictive.	Up to $2 million
Economic Injury Disaster Grant (“EIDL – Grant”	SBA National	New	Grant	Application is the same as an EIDL loan (see above).	Targeting immediate operating expenses for businesses forced to close.	$10,000

Great new resources have come on line! We love what Michigan's SBA office is putting out there.

Click here for a 1 pager summarizing three possibly relevant SBA loan programs for you:

• PPP
• Entrepreneurial Development Programs
• Emergency Economic Injury Disaster Loans (EIDL)

Click here for a 2 page document summarizing only the PPP.

REMEMBER to contact us for assistance! Click here for our contact page or use the comment section below. We had one brave roaster on today's webinar. He left with a raft of tips and more confidence that he knows which directions and questions he needs to explore quickly, talking to his banker, his partners and his employees.

Next webinar is Thursday, Apr. 2, at 11am EST.  Sign up today!