This week brought some new challenges for business, and some new guidance for loans. Here are the updates that you should be aware of.
Governor Hogan’s Latest Executive Order
The latest Executive Order deals with vesting local health inspectors with the authority to investigate workplaces and shut them down if they are deemed “unsafe”. We’ve attached the Executive Order along with this update. We’ve also attached a suggested “sample workplace safety policy” which may offer your jobsite some protection from shutdown.
In addition to the safety policy, we’ve been recommending that clients have a remediation, decontamination, after action reporting process. This could either involve voluntary shutdown of the workspace and/or decontamination utilizing the services of a reputable commercial cleaning contractor. Reach out to us if you need assistance on a plan for after your workspace has been exposed to COVID-19. This applies to all businesses, and would have a severe financial impact on businesses previously considered “essential” which are now potentially subject to shut-down.
Applications for small businesses with less than 500 employees were accepted beginning on 4/3/2020. You should have already made application to your SBA Preferred Lending Institution.
Solo entrepreneurs, independent contractors, and “gig economy” participants are set to be able to apply beginning today, 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
Treasury Department FAQs – FAQs Link
EIDL – Economic Impact Disaster Loan
We’ve suggested previously that each of you should have already applied for the EIDL. Here is the link: EIDL Loan Application and “Disaster Loan Advance”
State of MD Funds
This week, the State of Maryland shut down applications for all of the original three relief funds (loan, grant, and layoff aversion fund). The links are still active (below) but indicate that Commerce and DOL, respectively, will no longer be accepting applications. The manufacturing fund was still available as of our last check on 4/9/2020. We’d recommend checking back every couple of weeks in the event a) applications open back up again, and/or b) the State authorizes a new fund, or additional monies for existing programs.
Link to State of Maryland Relief Funds
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.
Again, this week, applications were above 6.6MM. We expect businesses to continue to struggle, and consequently let go more employees. Especially so, in light of the relatively small amounts of relief loans funded to date. If you’re facing a cash flow shortage and are contemplating layoffs, you must speak to your HR team, HR Consultant, Employment Law Attorney, or Business Attorney. Given new regulations under FFCRA you should not terminate employment without first seeking advice from a professional. If you need our HR team’s assistance, reach out.
If you’ve yet to develop cash flow models, you could be placing your business at risk. You should be able to model various scenarios and how they impact the survivability of your company on a cash basis. Given the amount of time it is taking to turn around approvals and funds from the Government relief efforts, your ability to forecast is vitally important. If you have not completed any modeling, and need assistance, reach out to us.
David S. Kelly
CEO – Chief Enthusiasm Officer Growth Solutions Team