17. New news from Washington DC on PPP

In case it's helpful, here are the 'rumors' I've heard about what may be coming

This week auto workers got back to work in Detroit.

down the pike from Washington D.C. in terms of the Paycheck Protection Program (PPP). 

• Next week, May 28th, the Treasury is expected to issue more guidance on rules related to PPP forgiveness.
• No new funding for the PPP program is expected right now. Once the current amount is gone, it's gone.
• Personal protective equipment (PPE) may become a deductible expense for tax purposes for businesses.
• The PPP forgiveness amount will hopefully soon be confirmed by Treasury as tax free.
• SBA might extend the 8 week covered period into a 16 or 24 week period. They are taking into consideration how businesses may have a hard time bringing back all of their employees if there are still governor's executive orders keeping them closed.

14. PPP Loans - It's Not Too Late

For any roasting businesses that have pursued, but not received a PPP loan yet, I have some tips from a small business briefing today.

1. As of May 6, $183 billion of the latest $310 billion has been spent. So there should still be some money out there.

2. PayPal comes through! A lot of companies have been successfully switching away from the first place they apply when the first institution isn't able to help them. Today, one story was conveyed of a Michigan business where the owner got started late, just this week, because it was only this week that a customer failed to renew a contract. He started on Monday, May 4, went through three banks where he had relationships, and all 3 said they couldn't help. Then he went through Paypal, and got approved within 24 hours!  Click here for more info on PayPal PPP loans.

3. Another "online bank" that I've heard is helping businesses get PPP loans is NAV. https://www.nav.com/

10. PPP Tips: Covered period vs. Forgiveness Period

"Speaking to you" today from the state that ranks fifth in the country for cases and fifith for the number of deaths per million residents. Testing remains in the bottom fifth, (read: public health crisis). Michigan also has the third highest unemployment rate in the nation, (read: economic crisis)! Telltale headline, "Detroit hospitals say they've begun storing bodies in refrigerated trucks to handle the surge."

Jamie Lopiccolo, CPA at Capocore, gives small biz advice.

With that grim reminder, it was helpful earlier this week to hear a few tips on how to operationalize your Paycheck Protection Program (PPP) loan, should your roasting company be lucky enough to get one! Yesterday we learned the first $350 billion allocated for that program has been spent. Companies are being asked to wait for congress to approve more.

It appears there are two key time periods to understand. One is the "covered period" and the other is the "forgiveness period." We attempt to clarify below:

"Covered Period": Feb. 15, 2020 - Jun. 30, 2020 is the 4.5 month period in which qualified business expenses qualify to be used for the loan proceeds. Qualified business expenses are payroll, rent, interest on loans and utilities.

"Forgiveness Period": the eight weeks that commence on the day you receive your loan funds. Let's assume you receive loan funds on May 4, so your forgiveness period will be May 4 - Jun 26, 2020. This means that qualified business expenses in this period can be reported and if approved, that amount will be forgiven. The PPP regulation states that not more than 25% of the amount forgiven can be for non-payroll expenses. In other words, prioritize using PPP funds for payroll. That is the intent of the program.

On this SBAM webpage you can find the link to a recording of a great webinar given by CPA firm Capocore, titled: "What You Need to Know About Spending & Tracking Your PPP Loan." (Presented in partnership with the Michigan Association of CPAs April 13, 2020)

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).

5. How to Apply for the PPP -- get ready for April 3

Roasters start your engines!

U.S. Treasury has announced that the Paycheck Protection Program (PPP) will go live on Friday, Apr. 3. Now every small business support agency and bank which is an SBA lender has their deadline. They must be ready to serve you on April 3.

Here are basic steps you should do between now and Friday:
1. Contact the bank where you do most of your business, ask to speak to someone in the business loans department (an average teller may not know the answers), and ask the following questions:

• Are you an SBA certified lender?
• Are you participating in the Paycheck Protection Program - new SBA lending authorized by the CARES Act?
• Is there someone who can help me understand what are the requirements to qualify, and the benefits for my business? (BTW - we at Artisan Coffee Imports can help you with these questions, too, to a certain extent. It may be wise to feel like you have a basic understanding before calling the bank.)
• If I want to apply for PPP, what are the steps with your bank? (Most banks are opening an on-line portal where you will submit the application form and supporting documents.)

2. Download the application form and fill it out. It's pretty short - more like a cover sheet only.

3. Gather the supporting documents which are listed on side 2 of the form. Items 3 and 4 under "Certifications" give you a good idea of what type of documents you'll need to provide to your banker. Your banker will be the one to specify exactly what is required. The items may include:

• Number of full-time employees on payroll at the time the loan is issued.
• Dollar amount of payroll costs at the time the loan is issued.
• Mortgage interest payments.
• Rent payments.
• Utilities

Contact us to ask questions using the comment field below or the contact page of our website!

OR join our webinar "Loan Application Assistance for Roasters" on Th., Apr. 2, 11 am EST, or Tue, Apr. 7, 11am EST. Contact us to register (CLICK HERE).