As more and more Self-employed individuals (including independent contractors and freelancers) are approved for PPP funds, some are left wondering if you can receive the new Unemployment (Pandemic Unemployment Assistance) benefit from the CARES act, in addition to the PPP loan proceeds.  The answer to this question is no, you cannot “double dip.”  This leads to a unique choice, which would be better for you, the Paycheck Protection Program or Unemployment.  Let us break down the differences real quick:

  • PPP Details:
    • It is based on 2.5x your net profit last year.
    • It is a 1% loan with a 2-year term, but can potentially be forgiven, if used for eligible expenses.
    • Forgiveness is for “Owner Compensation Replacement”, which is figured by taking your 2019 Net Profit on your Schedule C and multiplying it by 8/52 (or 0.154)
    • That number will get you close to 75%, the other 25% can be utilized for mortgage interest, rent, or utilities.
      • If you have a home office, you can utilize the Home Office Deduction formula to figure out your eligible expenses.
      • If you do not have any other eligible expenses, you can either pay back the remainder or use it as a 1% loan (with a 2-year term) to help mitigate future losses.
  • Pandemic Unemployment Assistance

Now, down to the nitty gritty.  How do you decide?  Well let’s say you had a net income of $40,000 on your schedule C in 2019.  This would mean that you would qualify for $8,333 in PPP benefits (40,000/12 x 2.5).  $6154 (40000/52 x 8) would be forgiven as “Owner Compensation Replacement,” and you would need to find $2179 in other eligible expenses (rent, mortgage interest, or utilities) for the rest to be forgiven.  You could pay the rest back quickly, or you could save it and use it as a cheap line of credit in case you needed to help keep your business afloat for a while longer.  Payments are deferred for 6 months.  Here, the PPP is clearly the winner, because unemployment insurance will only provide you with $4800 worth of benefits in those 8 weeks, and those benefits will be taxable.  The crossover is around 2019 schedule C income of around $22,000.

We hope this helps a bit.

Please remember, if you did apply for PUA through Indiana, because you did not think that you would receive PPP, you can withdraw your application.

It seems like forever ago that the second round of funding for the PPP and EIDL were signed into law, but in reality it was only 2 weeks ago.  Since that time, the SBA and Department of Treasury has continued to release new FAQ and Guidelines.

Some of the recent changes include:

  • Companies have until May 18th to pay back PPP loans that they received but may not need.
    • If companies received less than $2 million in PPP Funds, there is a safe harbor that states, “will be deemed to have made the required certification concerning the necessity of the loan
      request in good faith.”
    • If they do, they can qualify for the Employee Retention Credit.
  • PPP Forgiveness rules continue to be updated including:
    • You have to pay employees at least 75% of their earnings of the 1st quarter.
    • PPP funds that have been used and forgiven are not included in your expenses for 2020.
    • If you make an offer (written and in good faith) to bring back someone at the same pay and hours, but they refuse due to Covid-19 fears or unemployment benefits, they will not count against your forgiveness.
  • PPP Forgiveness for Self-Employed, Independent, and Contract Workers
    • Forgiveness is for “Owner Compensation Replacement”, which is figured by taking your 2019 Net Profit on your Schedule C and multiplying it by 8/52 (or 0.154)
    • That will get you close to 75%, the other 25% can be utilized for mortgage interest, rent, or utilities.
      • If you have a home office, you can utilize the Home Office Deduction formula to figure out your eligible expenses.
      • If you do not have any other eligible expenses, you can either pay back the remainder or use it as a 1% loan (with a 2-year term) to help mitigate future losses.
  • The PPP breakdowns for the second round have included more small loans.
    • 91% of loans in the second round have been $150,000 and under (compared with 74% in the first round)
      • 73% of all loans have been $50,000 and under
    • Average loan size is $73,000 (down from $206,000)

Now comes the even more difficult part.  You have to be diligent in documenting the offers for your workers to come back to work, where your PPP loans go, and more.

Also, a note about those that took the PPP loans and may not need them.  When the Paycheck Protection Program came out, it was the height of uncertainty.  Many businesses were looking at declining trends in revenues and were afraid (and rightly so) that there was no end in sight.  They also might have been worried about the possibility of laying off or furloughing several workers, which this program was intended to prevent.  Remember your feelings in late March, early April, and how crazy everything was.  Now, in Indiana, we have a bit more clarity of the steps the economy will take to open up, even though customer behavior is still a guess.  So, with this in mind, when the names come out of everyone who received PPP or EIDL funds, let us try to take that into account.

Webinars and other Resources
As you continue to work to improve your business during this Pandemic, Level Two will do our best to provide you with actionable information that you can use on our Business Resource Page, which we continue to update with links to various organizations involved in the recovery effort.  We will also be hosting two Workshops this week and will continue to do so Digitally until we can meet back in person.

Town of Plainfield Rolls Out Small Business COVID-19 Relief Grant Program

PLAINFIELD, IN — The Town of Plainfield is rolling out a Plainfield Small Business Crisis Response Grant Program to help small businesses recover from the economic downfall of the COVID-19 pandemic. The grant program will allow small businesses, employing 50 or less employees, to apply for a grant of up to $2,500.

Grant applications are currently being accepted.

Other Small Business Grants

Elevate Small Business Grants
Hello Alice Covid-19 Business Resource Center
Salesforce Care for Small Business Grant Program
Save Small Business Fund (not all zip codes apply)
Verizon Small Business Recovery Fund

 

Indiana Small Business PPE Marketplace
This online hub serves as a resource for Indiana small businesses employing up to 150 associates that are in need of personal protective equipment (PPE) to ensure the health and safety of their workforce during the COVID-19 pandemic. All businesses are encouraged to first source and procure PPE on their own. This service is designed to serve as an alternate backstop for employers most in need. Click here for more information and to place a request.

All Week at Noon – gener8tor’s Emergency Response Program,

  • gener8tor is hosting a series of free, “Next Steps” webinars for small businesses, nonprofits, startups, freelancers and artists affected by the COVID-19 outbreak.

Thursday May 21 at Noon – Web Writing Made Easier with Scott Flood

HR Webinars

Wednesday May 13th at 1:30 – Return to Work: What Chamber Members Need to Know on Unemployment Insurance

Thursday May 14th at 2:30 – Return to Work:  Creating a Viable Playbook (The Wagner Law Group)

Tuesday May 19th at 12:00 – COVID-19 Protection Planning for your Business

HR Replays

Designing a Comprehensive Re-Entry Strategy in your Workplace

Indiana Business Leaders on Returning to Work

Mental Health Resources from Care to Change

  • Tuesday’s ZOOM chat at 5pm on the topic of Being Creative with Kids during COVID (Meeting ID: 864 1044 4736, PW: 357698)
  • Wednesday Mental Health Awareness ZOOM at Noon topic is Mental health and your family (Meeting ID: 861 4172 4821, PW: 551879)
  • Wednesday’s men’s ZOOM Bible study topic is on Finding Treasure in Darkness (Meeting ID: 396 010 186, PW: together)
  • Thursday’s ZOOM chat at 7pm will be on the topic of “Why do I feel so stressed?”The biological impact of COVID (Meeting ID: 826 5076 1879, PW: 528598)

 

Last Friday Governor Holcomb released his plan and guidelines for Back on Track Indiana, which is a 5 stage plan to get Indiana fully open by July 4th.  Stage 2 started yesterday in Hendricks County, but will be pushed back a week in Marion County, along with a few others as long as their local governments allow it.  As this process continues, the Governor has put in a caveat that a certain stage could be paused for longer or even reversed to an earlier stage if the data suggests.  With this in mind, what are some things you can do to make sure your business is ready to open back up?

  1. Develop or Strengthen your Marketing Campaigns
    1. Social Media Utilization is up 50% or more as several are staying home to work remotely and/or give care and education to their children.
    2. The Good – Despite this fact, advertising budgets have gone down, which lowers the cost of ads.
    3. The Bad – With more eyeballs on Social Media, you are competing with others to get your content seen.  So make sure your content is informative, relatable, and timely.
      1. The Best times to post on Social Media during Covid-19
  2. Make sure you communicate with your customers and employees to make sure they know your plans.
    1. Make sure you are continuing to sanitize your establishment based on the CDC guidelines, to maintain your customers’ and employees’ health and well being.
    2. Make a plan for getting your customers served or back in the door.  For appointment only businesses like salons, you may want to start booking your best customers first as you will most likely have a lot of pent up demand.
    3. If you have been doing business so far, make sure you are collecting email addresses and maintain an email campaign to stay in touch.  For Emails, we use MailChimp, but Constant Contact and others work as well.
    4. Make sure you are communicating with your employees on when you plan to rehire them, and what you are doing to keep your workplace safe.
    5. Some employees may not want to come back due to the added benefit of the $600 weekly Federal Unemployment Benefit from the Cares Act.  This is understandable due to the remaining uncertainty.  For these employees,  make sure you make an offer in writing for them to come back to work.  If you do this, they will not count against your PPP forgiveness.
  3. Did you apply for the PPP or EIDL yet?  Here is the most recent FAQ and guidance on PPP program.
    1. If you applied for the PPP and have not yet received it, check on the status of your application.
      1. If you have a number, congrats, you are in the queue.  If not, ask your bank where you are in line.  If you are with a big bank and are far behind, you may want to contact Home Bank, PayPal or Stripe to see if they are still taking applications.
    2. If you have received your PPP funds and can certify that they were “necessary to support the ongoing operations” then make sure you can document a couple of things.
      1. Why it was necessary
      2. Where the money goes.  Remember, the loan is forgivable if 75% of the funds go to payroll costs.
    3. If you have received your PPP funds, but have new clarity that you did not really need the funds.  You have until May 7th to pay it back.
    4. If you have already applied for the EIDL and got a loan number, they are continuing to work through their applications.
    5. If you have not yet applied for the EIDL, they have opened the portal to submit applications for Agricultural businesses, but not any other businesses yet.  
  4. If you are a freelancer or Independent worker and are still not seeing any return to normalcy for your business, you can file for unemployment.
    1. The CARES Act (Section 2102) also allows for self-employed individuals and Independent Contractors to file for Unemployment if the filer:
      1. is diagnosed with COVID-19 or experienced symptoms or is seeking a diagnosis
      2.  has a member of his or her household that has been diagnosed with the illness
      3. is providing care to a family member with COVID-19
      4. has primary caregiving responsibility to a child that is unable to attend school due to COVID-19
      5.  cannot reach his or her place of work because of a quarantine or advice of a health care provider to self-quarantine
      6.  has become a breadwinner after the head of household has died from COVID-19
      7. has had to quit his or her work as a result of Coronavirus, or
      8. has a work location that is closed as a direct result of a COVID-19 public health emergency.
    2. Indiana began to accept applications for Independent Workers and Self-Employed Individuals on April 24th.
    3. When applications are accepted, benefits will be paid retroactively back to March 29th and will consist of the federal $600 per week.  Here are tips on how to add yourself as an employer to the Indiana system.

Yesterday evening the House passed the $484 Billion relief package that passed the Senate early in the week, and now it is on to the President’s desk for it to be signed into law at noon today.  This is another lifeline after the PPP and EIDL programs ran out of money in less than two weeks.  If you are looking for things you can do now, you can skip to the bottom of this email.  Also you can register for this free webinar from the US Chamber that will cover this new legislation and some steps you can take to find helpful resources during the pandemic.

Before we get into what is in this bill, however, let’s look to see how the first tranche of funding was spread out through April 16th. 

  • Paycheck Protection Program (as of April 16)
    • Over 1.66 Million Loans and over $342 Billion  were approved (not necessarily disbursed)
    • Average Loan size was $206k
    • Loans $150k and under represented 74% of all loans but only 17% of money disbursed
    • Loans over $1 Million represented 4% of all loans but 35.53% of money disbursed
    • Indiana accounted for 35,990 loans (2.17%) and just under $7.5 Billion (2.19%)
  • EIDL Advance Program (as of April 19)
    • 755,476 Advances Processed and almost $3.3 Billion
    • $4,360 average advance
    • Indiana accounted for 9,658 Advances (1.28%) and $46 Million (1.4%)
  • EIDL Loans Program (as of April 19)
    • 26,919 Loans approved and $5.567 Billion
    • $206,802 Average Loan
    • Indiana accounted for 385 loans (1.4%) and just over $75 Million (1.36%0

The most outrageous part that most of us already know, and I have already written about, is that $243.4 Million of the first $349 Billion of the PPP went to publicly traded companies, including $20 Million to Ruth’s Chris Stake House parent and $10 Million to Shake Shack.  Since that time, Shake Shack has decided to give back the money, which will go back into the PPP program and will be reallocated with this new round of funding.

What is in this new package?

  • $310 Billion goes to replenish the Paycheck Protection Program (PPP)
    • $30 Billion of this is earmarked for banks and credit unions with less than $10 billion in assets.  State Bank of Lizton, Home Bank, Stockyard Bank and Trust, and Citizens Bank are in this category.
    • $30 Billion of this is earmarked for banks and credit unions with between $10 and $50 Billion in assets.  Old National and First Merchants are in this category.
  • $10 Billion additional added to the Economic Injury Grants Program
  • $50 Billion additional funding for EIDL Loans, which now is available to our farmers
  • $75 Billion goes to Hospitals
  • $25 Billion goes to testing
    • $11 Billion of this is to help the states with testing

What is not in the package, but might be fixed with guidance?

Well, there are no additional safeguards in this package to make sure that large companies do not gobble up all of the money that was supposed to go to small businesses.  However, there is some good news.  On Thursday morning the SBA and Department of the Treasury issued new guidance that would “make it unlikely that a public company with substantial market value” would be able to qualify for the loans.  This will hopefully keep them from requesting PPP during this next round.  They also ask that the companies who are not able to certify that the PPP loan request was necessary pay back the funds by May 7th, but no guidance on where those funds will go once paid back. All of the loan parameters are staying in place, including the 1% interest rate, 2 year term, funding criteria, and forgiveness requirements.

What steps can you take to give you the best chance to qualify for this round of funding?

  1. If you have already applied for the PPP or EIDL and your loan is in limbo (IE you got a loan number but no funding yet), you are not able to apply for another PPP loan.
  2. If you think your particular bank has not been up to the task or slow in handling your loans, and you have not gotten an SBA loan number, get ready to apply with Paypal, Square, or Intuit, which may be better to suited to handle a higher volume of applicants based on their technology.
    1. Know that you can only apply for one PPP loan, so if yours in currently in the SBA queue, you should not apply with another lender.  If it has not been put in the queue, contact your bank and ask where you are in line, and if you are far behind, take your app somewhere else.
    2. Some larger banks including Chase has been asking some of their clientele to request funding from other sources.
    3. Home Bank is accepting PPP applications from businesses that are not currently customers as well.
  3. If you have not applied for the PPP loan yet
    1. Fill out the PPP application
    2. Get your Formation documents, Entity report, structure, ownership and legal organization documents ready.
    3. Payroll Reports if you have employees
    4. Mortgage or Rent Documents
    5. Utility Expense documents
    6. Proof your business is active and in good standing
      1. Run a Business entity report on INBiz to make sure you are in good standing, if not, get it fixed ASAP
    7. Documentation on how the pandemic has impacted your business
    8. If your business is seasonal, make sure you have information based on your February 15 – June 30th time frame.
    9. If you are Self-Employed or an Independent Contractor:
      1. You can qualify for 2.5x your 2019 monthly net profit up to $100,000
      2. You need to have your 2019 Schedule C even if you have not filed taxes
      3. You can use proceeds on Owner Compensation (see 1), employee payroll costs, mortgage interest payments, and a few other things.
  4. Remember, you can apply for both the PPP and EIDL programs, but you have to spend the money from each program on different items.
    1. EIDL Advance Grants up to $10,000 should be available again, and have been funded at $1000 per employee.  This advance does not have to be repaid if used for:
      1. Providing paid sick leave to employees
      2. maintaining payroll to retain employees
      3. making rent or mortgage payments
      4. repaying obligations that cannot be met due to revenue loss
    2. The EIDL Loan is a 3.75% loan up to 30 year term, payments deferred for a year, and requires collateral for loans over $25,000
      1. EIDL Loan can be used for any of the above items as well as fixed debts, payroll, utilities, accounts payable and other bills that cannot be paid
    3. To qualify for forgiveness, at least 75% of the PPP has to be spent on payroll costs.
      1. Besides Payroll, you can use the PPP for healthcare costs and insurance premiums, rent, utilities, etc.
  5. If you are self-employed or an independent contractor and your business has been impacted by COVID-19, you can file for the $600 weekly federal unemployment benefit from the CARES Act.  Indiana has been working tirelessly to update their systems and can now accept applications today!  PUA payments will be made in May and can be retroactive back to March 29th.

We know this process is not perfect, and there have been a lot of challenges and frustrations in this program, but we will continue to try and provide the most up to date information and resources as information comes out.

Good luck and stay safe out there.

John C. Anderson
Executive Director, Level Two Inc

As of yesterday morning, the SBA had added an alert on their website that stated the following:

Lapse in Appropriations NoticeSBA is unable to accept new applications at this time for the Paycheck Protection Program or the Economic Injury Disaster Loan (EIDL)-COVID-19 related assistance program (including EIDL Advances) based on available appropriations funding.

EIDL applicants who have already submitted their applications will continue to be processed on a first-come, first-served basis.

After I saw this, I started asking around to see if some of our local small businesses had received their loans.  The results:  Some have received funds, most have not heard anything back from their lender, and some received a loan number but they are not sure where their loan stands.  Will it be funded?  Will it not be funded?  How much can they expect to receive?  Crickets.  Please note that I am not blaming anyone in this situation.  Bankers (many of whom that I know personally) have been working tirelessly to try and get funds to their applicants.  But to be honest, the whole thing was a bit of a Poop Sandwich from the start, and with the SBA approving 14 YEARS worth of loans in 14 days, things were bound to get messed up and funds were bound to go where they weren’t needed most, which can happen a lot with government programs.

Data has been trickling out about where the funds have gone, and you can see some of it here.  But the CliffsNotes as of April 13th are as following:

  • Loan Approvals (Not Necessarily Funded):  Over 1 million loans at almost $250 Billion in funds
  • Some large public companies have received millions in aid
  • 4,664 Lenders have participated
  • Indiana Accounts for 23,583 Loans (2.27%) and almost $6 Billion (2.4%)
  • 70% of Loans but only 15% of the Dollars spent were $150,000 and under
  • 9.9% of Loans were $350,000 – $1M but they made up for 24% of the Dollars Spent

Many others will be writing about the shortcomings of this program more eloquently than I can.  So without getting into any more details, here are some ideas for the next steps you can take:

  1. If you have not yet applied, or applied for the PPP or EIDL and your loan is in limbo, use this time to get your stuff together in case Congress does grant additional appropriations.  Not sure what you need?  Here is the most recent information from the SBA  which includes guidance for Independent Contractors and Self-Employed Individuals.
  2. If you think your particular bank has not been up to the task or slow in handling your loans, get ready to apply with Paypal, Square, or Intuit, which may be better to suited to handle a higher volume of applicants based on their technology.
  3. If you are self-employed or an independent contractor and your business has been impacted by COVID-19, you can file for the $600 weekly federal unemployment benefit from the CARES Act.  Indiana is still working on updating their system to allow it, but you are encouraged to apply anyway.  When it is fixed, payments will be retroactive back to late March.
  4. Call or email your Representatives and Senators.  Their information can be found here.  Our Representative is Jim Baird (the first one listed) and our Senators are Braun and Young.
  5. Sign our Change.org petition to get our Congress back to the table.

Our Small Businesses and Independent Contractors are hurting right now.  As of 2016, 406,919 of our state’s 512,348 small businesses are Solopreneurs.  Small businesses in total make up 99.4% of all businesses in the state and 44.9% of all Indiana employees.  This is a huge part of our economy and they are being left behind.  They were told to wait until April 10th to apply to the first come first serve Paycheck Protection Program that started accepting application on April 3.  Their guidance has been updated continuously and banks have been unsure how to categorize them until recently.  They cannot even get the unemployment assistance here in Indiana yet, because our system isn’t set up for it.  We need to do what we can to help.

If you know of anything else we can do to get the ball rolling, please let me know.  I will be emailing and calling our Representatives and Senators today to try and get them back to the table.

Senator Mike Braun
Senator Todd Young
Representative Jim Baird

Has your business or income been affected by the coronavirus crisis?  If you are self-employed or an independent contractor without any employees, here are a few tips from recent legislation for ways that you can help bridge some gaps until the you can make up some of your income.

  1. First, you can apply for the PPP beginning today Friday, April 10th.  The application process for small businesses started last Friday, but local banks should be allowing the Self-employed and Independent Contractors sign up today.  Check your bank to see if they are now accepting applications from businesses like yours.
    1. The maximum loan size is up to 2.5 times your average monthly 1099-MISC or net self-employment income for the past 12 months.
    2. All amounts spent on the following list of items during the first 8 weeks of the loan term are 100% forgivable: (a) to replace your 1099-MISC income or your net self-employment income, (b) interest on mortgages, (c) business rent, and (d) business utilities. Note that if more than 25% of this amount is used for interest on mortgages, c business rent, and business utilities, not all of the amount spent may be forgivable.
    3. The term is 2 years, Interest rate is 1% and payments are suspended for the first 6 months of the loan.
  2. Next, you can apply for an Economic Disaster Injury Loan with Advance directly from the SBA
    1. The EIDL will give you an advance of up to $10,000 that is forgivable.  The issue that we have seen though, is that due to high demand it seems to be based on the number of employees to the tune of $1000 of credit per eligible employee.
    2. Interest rate is 3.75% for small businesses and independent contractors and 2.75% for nonprofits for the loan (which does not include the advance) and the term is up to 30 years.
    3. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.
    4. You can apply for both an EIDL and PPP, however you cannot use the funds on the same items.  Therefore, it would make sense to put each of these loans in different accounts and keep track of how they are spent.  Also, using the PPP on the forgivable costs and the EIDL on other items would most likely be the best way to go.
  3. Unemployment (This sucks, I know, but if a government forced shutdown of your business doesn’t merit an unemployment claim, I do not know what would).
    1. The CARES Act (Section 2102) also allows for self-employed individuals and Independent Contractors to file for Unemployment if the filer:
      1. is diagnosed with COVID-19 or experienced symptoms or is seeking a diagnosis
      2.  has a member of his or her household that has been diagnosed with the illness
      3. is providing care to a family member with COVID-19
      4. has primary caregiving responsibility to a child that is unable to attend school due to COVID-19
      5.  cannot reach his or her place of work because of a quarantine or advice of a health care provider to self-quarantine
      6.  has become a breadwinner after the head of household has died from COVID-19
      7. has had to quit his or her work as a result of Coronavirus, or
      8. has a work location that is closed as a direct result of a COVID-19 public health emergency.
    2.  Indiana is far behind in accepting unemployment benefits for the self-employed because of incredibly high volumes and the fact that we just have never allowed for it in the past.  But please try and file and you will be
    3. When they are accepted, benefits will be paid retroactively back to March 29th and will consist of the federal $600 per week.  Here are tips on how to add yourself as an employer to the Indiana system.   
  4. Delay IRA Contributions and Tax Payments from 2019. 
    1. Do you have a tax bill due from your 2019 taxes?  You can postpone paying that (and filing your taxes) until July 15, 2020.  This could help with Cash Flow for the next couple of months.  2020 Estimated taxes for the first quarter are also delayed until July 15, but be careful because they are not postponing estimated taxes for the second quarter or beyond, so you could have a large estimated tax bill come July 15.
    2. Were you planning on making IRA Contributions for the year 2019?  Now you can postpone those contributions until July 15th as well.  This could also help with cash flow while allowing for the ability to preserve the right to:
      1. Lower your tax bill from 2019 (if contributing to a traditional IRA)
      2. Take advantage of saving for retirement via taking advantage of IRA limitations each year.
  5. Take advantage of the Forbearance on Federal Student Loans
    1. This program should be automatic based on the CARES act starting on March 13th.
    2. What Student Loans qualify?  All Federal loans taken out after 2010 including Parent PLUS Loans.
    3. What Student Loans do not qualify?  Private Student Loans (ie you have refinanced to a lower rate), FFEL Loans and Perkins loans only qualify if they are federally held.  So if in doubt ask your loan servicer.
    4. Payments and Interest are waived until September 30, 2020
    5. If you want to continue making payments to pay down your principal faster CONTACT YOUR LOAN SERVICER.  All continued payments will go directly to your principal, and you can move back to suspend payments at any time between now and September 30th.
  6. Distributions from IRA’s and 401k’s 
    1. This is not my favorite, and most likely should be a last resort, especially with the market down, but the CARES act allows for distributions of up to $100,000 from your qualified account.  You can then decide to pay the amount back over a 3 year period without tax consequences.
    2. Who qualifies for this provision?  Anyone….
      1. Who is diagnosed with COVID-19 by a test approved by the Centers for Disease Control and Prevention.
      2. Whose spouse or dependent (generally a qualifying child or relative who receives more than half of his or her support from you) is diagnosed with COVID-19 by such a test.
      3. Who experiences adverse financial consequences as a result of being quarantined, furloughed, laid off, or having work hours reduced due to COVID-19.
      4. Who is unable to work because of lack of child care due to COVID-19 and experiences adverse financial consequences as a result.
      5. Who owns or operates a business that has closed or had operating hours reduced due to COVID-19 and has experienced adverse financial consequences as a result.
      6. Who has experienced adverse financial consequences due to other COVID-19-related factors to be specified in future IRS guidance.
    3. Again, this should be utilized as a last resort due to the facts that:
      1. You may not have clarity on your business prospects on the future
      2. If you do not pay it back there could be a huge tax liability
      3. You are robbing yourself of retirement savings, and who knows when you may be able to save again.

Please Note that this should not be considered advice to take advantage of any of the following programs as we do not know your situation, it is merely a list of resources that are newly available to you.  You should contact your CPA and/or Financial Advisor/Planner before making these decisions as they will have a better knowledge of you and your business and can best direct you in which direction to go.

New Updates on the Paycheck Protection Program!

A new application and interest rate have been released based on guidance from the SBA and updates from participating lenders.

You can find a copy of the application at the link below and the interest rate has been moved from 0.5% to 1%.

You can apply for both the Paycheck Protection Program and the EIDL, you just cannot use the funds from each loan on the same purpose.  Applying for the Economic Injury Disaster Loan (EIDL) happens directly through the SBA and may be a good idea for some businesses, but if you do apply for both loans you will want to make sure you set up separate bank accounts to make sure you do not commingle the funds, and can show where the money from each loan has been used.  If you apply for the EIDL, you can receive an advance in the form of a grant of up to $10,000, which will not have to be repaid.

So far I have been told that First Merchants is currently taking applications, Bank of America and Horizon Bank are accepting them. Huntington Bank will be going live this afternoon, but Bankable, Old National and Citizens are not taking applications yet.

We will try to keep you updated as we learn more.

SBA Paycheck Protection Program Guidelines

Paycheck Protection Program Details

The Details are finally out on the $349 Billion from the CARES Act that is meant to help small businesses and non-profit organizations have been affected by the coronavirus.  This is a different loan than the SBA Disaster Loan which does not have forgiveness and comes with a 3.75% interest rate.  We have had a ton of questions about this since it passed last week, and now we have some clarity.  Here is the breakdown from the department of the treasury, but if you want a synopsis you can keep reading.  Our friends at the Indiana Small Business Development Center – West Central District are hosting a Zoom conference call on the SBA funding programs.

How to Apply

Small Businesses and Sole Proprietorships can apply as soon as Friday (April 3) through an existing SBA lender or participating banks, credit unions, and Farm Credit System.  Independent contractors and self-employed individuals can apply as soon as April 10th.  Please ask your bank or credit union if they are participating before you send in the loan.  I have talked to several banks today, and they are still working on the details.  We hope to have a list of local banks for you to check out as soon as possible.  Also, you want to make sure that you apply as soon as you can on Friday to make sure you reserve you place in line.

Who Can Apply

This program is for small businesses with less than 500 employees, INCLUDING sole proprietorships, independent contractors (1099 workers), and self-employed persons.  It also allows non-profit organizations and veteran organizations to apply.  For those in the hospitality and food industry with multiple locations, each location could be eligible if that particular establishment employs less than 500 workers.

Loan Details and Forgiveness

Amount:  Up to 2 months of 2020 average monthly payroll costs plus an additional 25% of that amount.
Maturity Date:  2 years
Interest Rate:  0.5% (wow)
Needed Documents:  Payroll Documentation for 2019 and 2020
Loan Payments are deferred for 6 months (interest will accrue during that time)
No Personal Guarantees or Collateral required
No Fees
Forgiveness:  Based on Employer maintaining or quickly rehiring (by June 30th) employees and maintaining salary levels.  It is reduced if full-time headcount, salaries, or wages decline.  Also only 25% of loan earmarked for non-payroll costs is anticipated to be forgiven.

Application for Paycheck Protection Program

 

More Resources for Small Businesses and Entrepreneurs

We know you are busy and you are being bombarded with one COVID-19 email after another, and I am sorry to be another person littering your inbox, but we do have some valuable information to share.

1.  Level Two is currently staying open to service our Coworkers who provide “Essential Businesses and Operations“.  Our board did not come to this decision lightly, and we are implementing several strict measures to make sure we do not contribute to the spread of this deadly virus.  We will be having some digital marketing workshops remotely, which you can find out more by clicking the links below:

  1. Google Pay Per Click/SEO Optimization with Patrick Keller on April 7th at 9:00 am
  2. How to Build an Integrated Digital Ad Campaign

2.  We want to continue to provide you with a list of resources that could help you or your business through this stressful time.

  1. General Resources:
    1. gener8tor CARES Act vs Disaster Loan – a break down of the differences between the Disaster Loan program and the Cares Act
    2. Purdue Extension Economic Outlook webinar – join Dr. Larry DeBoer for an update of how the COVID-19 pandemic could impact the economy.
  2. Funding Resources:
    1. SBA Disaster Loan Program – loans up to $2 million for eligible entities, with interest rates of 3.75% for small businesses and 2.75% for nonprofits
    2. Facebook Small Business Grants Program – $100 Million in grants and ad credits for small businesses with more news coming soon.
    3. James Beard Foundation Relief Fund – micro grants for independent small businesses in the food and beverage industry.
    4. Google Small Business and Crisis Response  – $340 million in Google Ad Credits to SMBs with active accounts and much more.
    5. Micro Loans from Bankable or may be a good alternative, but the interest rates are higher (usually around 8%).
  3. Small Business Coaching:  Our partners continue to offer free business coaching services remotely.
    1. Business Ownership Initiative
    2. Indiana Small Business Development Center
  4. Resources and tools for working remotely:  A number of businesses are stepping up to the plate to expand their free offerings or trial period in order to help you get the most out of working remotely.  This is a big list (with providers offering more every week), but some of our favorites include Google, Microsoft Teams, and Zoom.
    1. Webinars to help you get the most out of your work from home time.  
  5. Skill-up Resources:  If you have lost your job and are looking for a new opportunity, gain skills, or a way to pivot your business in a new direction, here are some resources.
    1. MatchBOX Acceleration’s Entrepreneur Development series – for new or pivoting entrepreneurs.
    2. Unemployment Resource Guide – there is a webinar this afternoon (March 25th) at 3:00 as well.
    3. Eleven Fifty Academy – Learn to code or other cool tech stuff.
    4. Hendricks College Network and Visit Hendricks County Facebook Live on Job Assistance
    5. New Employment  Opportunities-  There are employers hiring, including CVS, WalmartAmazon and many more you can find at Hendricksjobs.com.
  6. At Home Wellness:  We all need exercise, and here are some resources to get exercise at home.
    1. Headspace – is offering a variety of guided meditations and exercises for free to all businesses and your employees.
    2. Fitness Blender – free workout videos
    3. CrossFit:  At Home Workouts
    4. Here is a list of other workouts you can stream for free!  
  7. Digital Resources for your education and entertainment.
    1. The Plainfield | Guilford Township Public Library or your local library, while they may be closed, has a ton of resources for you to utilize.
    2. Education Resources for the kiddos or the kid inside you.  
    3. Amazon Prime for Kids
    4. More Digital Resources

You can also find a ton of resources, blogs, and articles about best practices to get the most out of your work from home experience, but after reading several I will try to oversimplify it for you.

  1. Communicate – Communication is key, so communicate with your partner, your kids, and your employees or employer.  Set expectations and guidelines.
  2. Set Boundaries – Set up a work space and try to keep it your work space.  When you are there focus on work, and when you are not there, focus on other things like your kids, your partner, or anything other than this stupid virus.
  3. Get Outside – the weather is warming up and 100 bazillion studies have shown that fresh air is good for you.  Go for a walk or a hike and for Pete’s sake stay 6 feet away from other people.
  4. Set a routine – yes this is hard, but getting in a rhythm is important.  Try your best and give yourself (and your kids) some grace if something comes up (because something always comes up).
  5. Do the most important thing first – Pick one thing that you need to get done in any given day, and do that first.  Go to your work zone, and focus on getting it done without distractions.