By Cody Gehman, CPA
On Friday, April 24, President Trump signed into law a $484 billion coronavirus relief package to provide additional aid to small businesses and the healthcare system. The bill injects an additional $320 billion into the Paycheck Protection Program (PPP) created by the CARES Act, intended to provide potentially forgivable loans to small businesses who utilize the funds to retain or re-employ their workforce. Approximately $60 billion of this funding is earmarked for businesses that do not have an existing relationship with a lender, which was a common pre-requisite across lenders in the first round of PPP funding that left out a number of small businesses. The bill also provides another $60 billion in loans and grants for the Small Business Administration’s (SBA) Economic Injury Disaster Loan (EIDL) fund, as well as additional monies for hospitals and coronavirus testing.
1. If you are seeking funds through either program, we highly recommend getting in touch with your banker(s) and other business professionals to assess the best solution for your individual situation.
2. Act fast. PPP funds are likely to run out fairly quickly. The amount of applications that were in process when the first round of funds ran out could account for a good portion of this additional funding. Guidance on how to calculate your loan amount can be found on the Treasury’s web site.
3. In regard to the forgiveness provision for the PPP loan, we are seeking additional guidance from the SBA as it relates to the 75% spent on payroll cost requirement, the restoring employee headcount by 6/30/2020 requirement, and the reduction in payroll costs by 25% provision. We highly recommend discussing this guidance with your CPA and/or other business professionals when further guidance is released by the SBA, expected this week.
4. It is crucial to keep good recordkeeping of PPP funds spent during the eight-week period following the receipt of the funds. Remember that PPP funds are to be spent on payroll costs, utilities, rent, and/or mortgage interest.
5. The EIDL funding availability has been reduced from a $2,000,000 loan limit to $15,000 above the amount you get advanced. The advance is also $1,000 per employee, capped at $10,000 for the advanced amount.
6. We would like to leave you with a more personal note on this new and hopefully temporary reality. A colleague shared these wise words with us that are worth sharing:
We’re into this #WFH adventure six weeks now, and the mood has definitely shifted. Early gratitude over being able to go home and distance ourselves was glorious. A couple of weeks later, the sheen wore off, and we started to wonder how much longer it would be. Now, as the push to reopen becomes a battleground, we seem to have arrived at “I’m not sure I can take much more of this.” Just what “this” is depends on whom you ask. Some of us are just tired of being cooped up. Others of us have serious concerns over our safety and our livelihoods. Plenty of us are worried about both. Togetherness is wearing thin. Small differences are growing horns. Big differences now have big teeth. Relationships are fraying at the edges. And it’s all whitewashed with a heavy coat of uncertainty. Will things ever return to the way they were? Will we recognize normal when it returns? What will it take to come back from this malaise? I find my fuse is shorter than usual, and the ire is mostly directed at myself. I’ll worry about something, then kick myself for worrying about anything when so many others have so much more to be worried about. It’s a vicious cycle of concern and consternation, of worry and what on Earth do I have to worry about?
First things first.
Let’s call this what many experts say it is: grief.
What we and our people are feeling and how we’re behaving have all the hallmarks of grieving. We’re shocked, numb, angry. Our relationships may be suffering. We feel guilty for feeling worried. We search for answers. We yearn for resolution. We’re disorganized and forgetful.
Some of us are grieving over tangible loss – friends and family members who’ve succumbed to illness, companies and jobs that are gone, important milestones missed, things that will never be. Nearly all of us are grieving less tangible things: normalcy, certainty, constancy, predictability.
We will grieve until the grief lets us go. As managers and leaders, we must remember that our people will, too.
The struggle is real.
This is not child’s play. The realities of distancing are having a profound effect on everyone.
Some people are overwhelmed by having to combine work and home responsibilities without the support systems, like daycare and school, that are typically in place. Some are alone and lonely despite the many video calls that consume their days. Some are worried about how they’ll keep the lights on and the children fed as the economy continues to roil. Even those who are in good situations are working to stay positive and engaged.
To make matters worse, many of us are trying to pretend that Everything’s fine. No worries. It’s all good. Don’t be fooled. Even in the best of situations, it is not all good. And for many, it’s hard to envision when it will be again.
It’s not a competition.
We’ve all seen this at play. Someone steps out to share a worry and immediately hears from people whose worries are worse.
The other day, a friend posted that she’s sad because her high school senior won’t have a prom or commencement ceremony. The first response: “My commencement was a trip to Vietnam. She’ll make it through her ‘disappointment.’
Successful businesspeople are notoriously competitive, but this isn’t a time to keep score. What troubles people on your team may make you want to roll your eyes. Please don’t. Everyone has different and valid concerns that need empathy from those who matter to them.
While you’re at it, extend yourself some grace, too. Like it or not, none of us are “immune.”
Cody is a graduate of Shippensburg University with bachelor’s degrees in both Accounting and Finance. He obtained his CPA license in 2016.