Month: April 2020

We have been on the phone with a lot of small business owners and independent contractors discussing their Paycheck Protection Program (PPP) loans. Here are a few of the questions we are hearing most often:

Question: My bank won’t take an application from me. So where can I apply?

Answer: There are essentially 3 options: (1) large bureaucratic banks, (2) community banks and credit unions, and (3) non-bank SBA lenders.  It’s a shame that some of the “too-big-to-fail” banks are choosing only to do business with their “better” customers. A lot of business owners are left feeling invisible and unimportant.  We have been able to introduce clients to credit union lenders that do not require a pre-existing relationship. And we soon expect to have a direct line to one of the largest national, non-bank SBA lenders in the country.

 

Question: As a business owner, can I include the distributions I give myself in my calculation of “payroll costs” when determining my “average monthly payroll” on my PPP loan application?

Answer: No – unless you paid payroll taxes or self-employment taxes on those distributions. However, most small business owners are not set up that way.

 

Question: As an employer, are taxes included in “payroll costs” when calculating my “average monthly payroll” on my PPP loan application?

Answer: Per the U.S. Treasury: “[P]ayroll costs are not reduced by taxes imposed on an employee and required to be withheld by the employer, but payroll costs do not include the employer’s share of payroll tax. For example, an employee who earned $4,000 per month in gross wages, from which $500 in federal taxes was withheld, would count as $4,000 in payroll costs. The employee would receive $3,500, and $500 would be paid to the federal government. However, the employer-side federal payroll taxes imposed on the $4,000 in wages are excluded from payroll costs under the statute.”

 

Question: What time period should I use to determine my payroll costs to calculate my maximum loan amount?

Answer: If you were in business throughout all of 2019, and your business is not “seasonal”, then you have a choice: Use your payroll data from the previous 12 months (e.g., April 2019 through March, 2020) or from calendar year 2019 (January, 2019 through December, 2019).  Although those numbers may be very similar, it could make a difference in the amount you are eligible to borrow if you took on additional employees in late 2019 or early 2020. For seasonal businesses, use your average monthly payroll from February 15, 2019 through June 30, 2019. If you were not in business from February 15, 2019 to June 30, 2019, then payroll costs for January 1, 2020 through February 29, 2020.

 

Information is changing daily. We are staying on top of these developments as best we can so we can bring them to you in a timely and valuable way. Please call us with any questions or assistance with your PPP loan application.

The Government’s Paycheck Protection Program (PPP) Loan application period opened April 3, 2020 to a loud THUD.  Not even a week later….

…the SBA keeps changing the document requirements and application.

…Wells Fargo has officially closed their doors and said they’re not accepting any more applications.

…Bank of America said they are only taking applications from businesses who already have business loans with them.

The landscape is a mess. Business owners are frantic and in the dark. Changes are happening daily. Anyone who tells you they KNOW what’s going on is lying to you.

The process is going to be clunky and painful, especially for those who decided they were going to apply on Day 1 at all costs. For those people, they’ll be the ones experiencing the pain of brand new systems being implemented by overwhelmed people who are trying to process loans without critical SBA guidance. The banks will be cutting their teeth on this first wave of applicants.  I recommend that you try to avoid being in the first wave that gets cut-down. You don’t want to be the first soldier up the hill…

And REMEMBER – getting the money is the easier part.  Getting it FORGIVEN will be where people will regret the choice they made about who to go on this journey with. If you think its crazy out there now, imagine what the landscape will be when the loan FORGIVENESS applications are being submitted.

You can only let one lender submit your application. So whoever you deal with for the loan, is who you will deal with when you apply for forgiveness – for better or for worse.  And if your loan was processed on incomplete information because of FOMO (fear of missing out), then it will be that much harder to get your loan forgiven under the PPP loan program.

The current deadline to apply is June 30th. There’s $350 Billion of guaranteed loan funds. Less than 2% of that has been committed. And Mnuchin already said that when the funds run out, they’ll get more.

Whether you go to a big bureaucratic bank, a small community bank or a non-depository SBA lender, you will get your money and you will get your loan forgiven (if you spend it correctly). But by working with a professional — a lawyer used to working with clients under pressure and in times of stress – the process will be more manageable. You don’t need to do this all yourself.

At Wyman Legal Solutions, we can help by giving you advice, keeping you calm and by introducing you to a SBA lender that is professional enough to be waiting to take applications until officials finalize the guidance so they can begin processing loans and putting money into the hands of borrowers.

Don’t submit your application this week.  You won’t miss out. Call us to help you.

RELAX. You’ll get your money.

With the US Government’s CARES Act hot off the presses, we are identifying massive opportunities for small business owners who do not panic. When (not if) we get past the COVID-19 pandemic, a surge of business will be created in just about every industry. For smart, confident, responsible business owners, the government has just handed you the tools to make sure that at the very moment that the business surge arrives, you will be primed to take advantage.

Unfortunately, those tools are mired in an 880-page document that reads like an insurance policy on steroids. Fortunately, we’ve taken the essential small-business components of the CARES Act and compiled a team of professionals that are ready to help navigate your small business through the Legal, Financial and Human Resources hoops that stand in the way of your business getting the assistance it needs – not just to survive, but to thrive!

*          Are you concerned about cash flow?

*          Do you want to keep your valuable employees?

*          Do you care about your clients?

*          Do you want to be poised to take your competitors’ customers or clients when the smoke clears?

If you answered “yes” to any of these questions, then take these 2 simple steps to begin coordinating your company’s pandemic response and growth strategy:

1. Call (561) 361-8700 to schedule a consultation;
2. Allow us to personalize a plan that fits your budget and goals, including:

*          Professional assistance applying for the Payroll Protection Program Loans <https://WymanLegalSolutions.us18.list-manage.com/track/click?u=b473ae4fa843fc144f2b4b0be&id=794cb9d7bb&e=4beffc6fe7>  or other programs the government has made available under the CARES Act;

*          Access to one of our firm’s Business Lawyer on Retainer programs to answer your questions during these uncertain times as they arise without being charged for every phone call and email;

*          Counseling and Guidance through Human Resource issues;

*          A strategic evaluation of your company’s business plan, budgets, financial controls, policies and procedures

Your actions at this moment…right here…right now… will define your company’s success for the next decade and beyond.

Are you ready?