Since the onset of this economic disruption we’ve been sending information and updates as they become available. Following are some updates to information previously sent along with some new items.
Small businesses are able to make applications as of today with their SBA Lending institution for the Payroll Protection Program. We sent updated information earlier this week. However, please check your forms and information. SBA changed the application form again and we’ve attached the latest information to this email along with our update. We, at GST, believe that most businesses should be seeking either the EIDL Funds or the CARES PPP Funds.
Note: For those of you without employees (independent contractors, solo-entrepreneurs, etc) the CARES PPP will be accepting applications for those businesses beginning on 4/10/2020.
Here are some quick links to the CARES PPP most recent changes:
- Application Form Update – The SBA decided for the umpteenth time to update the SBA Paycheck Protection Program Loan Application. I have attached the most recent application to this email as well as provided a direct link from the Treasury website: Paycheck Protection Program – Final Borrower Application
- Interest Rate – The SBA increased the rate from .5% to 1.00%. I have attached the New updated Fact Sheet to this email. Also, here is the link that outlines the new Fact Sheet for Borrowers: PPP Borrower Fact Sheet
- SBA – Final Interim Rule – Attached is the Final Interim Rule. This provides the most detailed update for items such as “What qualifies in Payroll Costs” and even provides examples. Here is the link: SBA – Final Interim Rule
EIDL – Economic Impact Disaster Loan
For businesses that need funds in an amount greater than the CARES PPP and/or have different needs for the funds that would not be covered under the CARES PPP, you may elect to apply for this relief. This is an update as the EIDL fund has been available for a couple of weeks now. Small business owners apply for EIDL online through the SBA site linked below. Note: You may be eligible to receive up to a $10,000 grant (forgivable) through EIDL while you are awaiting the processing of your application. EIDL Loan Application and “Disaster Loan Advance” Link
State of MD Funds
Maryland created a loan fund, a grant program and a layoff aversion program for businesses. Earlier this week, the “Layoff Aversion Program” which had been available online via the Department of Labor indicated that they are no longer accepting applications and directed web traffic to the Federal relief programs. As of yesterday, both the Maryland Loan Fund and the Grant Program were still taking applications.
Link to State of Maryland Layoff Aversion Fund (no longer accepting applications)
This last part highlights the urgency of timely application for all of the available relief programs. All (State and Federal) programs are subject to caps. It is important to note that the vast majority of businesses are, or will be, impacted. As a result, we anticipate the demand for programs to exceed the current spending limits. Our recommendation is to make sure your applications are submitted accurately at the earliest date.
We’ve seen unemployment claims numbers each of the last two weeks shatter longstanding records. We expect the unemployment number to be high again next week, primarily as a result of individuals struggling to get their claims filed and processed given the capacity of the States to handle the number of claims.
Further risk exists, in our opinion, should the relief process prolong because of demand, changing guidelines, and system overload. As businesses continue to burn cash while awaiting relief funds, those with less cash on hand may be forced to make additional layoffs.
Because of the FFCRA rules which took effect 4/1/2020 you should be consulting with your HR professional, payroll professional, employment attorney, and CPA prior to making decisions on additional layoffs. There may be new rules to follow, benefits due to employees, or exemptions/exceptions for which you may apply. In our opinion, you should seek counsel prior to any further employee/employment decisions to make certain you’re navigating the new rules and paying out benefits accordingly to avoid potential claims or enforcement actions at some later date.
Since our last update, the timeline guidance has changed. President Trump is no longer signaling an Easter weekend timeframe, but rather extending social distancing / curve flattening guidelines through April. Maryland basically extended the shutdown through April. And given the emergency powers of the Governor, that may or may not be indicative of the timeframe. In Virginia, the Governor shut down for an even longer period (through June).
The signals continue to be negative as Independence Day celebrations are being postponed or cancelled and numerous other activities between now and July have been moved or postponed. We believe these longer-range cancellations and changes are a worthwhile barometer for setting your expectations of the length / duration of restrictions on your business and the consumers of your products/services. We remain hopeful that we will begin to see some rolling back of restrictions and a cessation of cancellations at such time as the news about curve flattening / new case reduction becomes more positive.
Our outlook remains middle to end of May as a realistic planning timeframe. We are suggesting you run cashflow scenarios through June and July in the event of protracted shutdowns or worsening of the health conditions.
Assistance for Our Growth Solutions Clients
As promised previously, we here at GST have now launched Zoom meetings and Webinars that you can leverage for your decision making as a leader and for training management and sales members of your team. The quarterly planning sessions are all now scheduled as Zoom conferences and will be condensed in time. We will be conducting your 1-2-1 meeting via phone or zoom (your preference). We’ve made it a priority to increase the level of frequency with which we reach each client; but even so… if you need something, say something. Call us for assistance with any need. We are here together with you, moving business forward to a brighter future.