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AICC COVID-19 Zoom NotesMay 15, 2020Gene Marks, CPA, Columnista. The smartest business owners are always thinking ahead. b.100,000 small businesses are expected to close as a result of COVID-19c.About 88,000 business would have closed within this period anywaysd.The vast majority of the 30 million US small businesses will survive e.Believe travel will pick up in the near future and purchasing will start to get back to normal. Strategy 1: Leverage Federal AssistanceGoal is to manage your business so you can emerge once the economy emerges. It is all about cash. Economic Injury Disaster LoansEligible for profit & non profit businesses under 500 employeesLoan programs directly from SBA$2 million per company, but now limited to $150k2.75% (non profit) 3.75% (for profit)$10k advance within days of filingSBA Express Loans - $25k if you have an SBA relationship alreadyCheck on the status of your loan if possible - choose an SBA office not in the large pandemic hot spotsThere is an excess of $180 billion in SBA loans available that are not filledExpect Legislation in the next 2-3 weeks that will affect us allAverage loan approval size: $71,000Paycheck Protection Program: Getting the LoanBig banks, small banks, online lenders$10 million available, 2 year term, 1% interestFormula: 2.5x annual payroll/compensationUse your last 12 monthsSalary wages, commissions, tips capped at $100k per employeeIncludes business owner, earnings subject to self employment taxVacation, sick/mediacl leave, group health care, retirementState and local taxes on compensationNo collateral, no personal guarantees, no fees, no prepayment penaltiesCan be used in addition to economic injury loans but no double dipPaycheck Protection Program - ForgivenessTrack expenses over 8 week period, at end of 8 weeks contact bank to ask about forgivenessForgiveness period is 8 weeks after getting loanCongress may change this with next stimulus billForgiveness for payroll, mortgage interest, rents, utilities, with a 25% cap on non-payroll expensesThere will be options for refinancing the loansMust restore FTE salaries and headcount by 6/3-/20. (FTE is 30 hours per week + part timer monthly hours/120)Documentation: payroll records, tax returns, invoices, bank statementThis is an agreement between you and your banker. Read the document before signingPayroll tax deferral and creditDeferral - beginning this quarter you can defer employer taxes to 2021 and 2022Credit50% of every employee’s salary up to $10,000 from March 20 to December 31Refundable credit on payroll tax returns against employer payroll taxesCannot overlap with PPPPartially/fully suspends operations due to COVID-19 or suffers revenue loss which is 50% compared to prior periodUnemploymentWork SharingLets businesses temporarily reduce the hours of their employees, instead of laying them off during economic downturnsPros:Businesses retain trained workforceWorkers keep their jobs and collect reduced unemployment benefitsStates save money by paying only partial unemployment claimsCons:Only 27 states participatingSomewhat obscureLonger term to negotiateState, Local, CorporateFacebookJP Morgan ChaseVerizonOpportunity Fund2019 TaxesExtended to July 15, 2020File now for refundsMain Street Lending Program$600 B available by Federal Reserve through banksMinimum $1M (maybe $500k) - $150M loansVariable interest approximately 3-4%4 year termWorking capital, equipment, property but not to re-financeWhat have we learned?There are at least six forms of funding available for fundingStrategy 2: Making your workplace safeFamilies first coronavirus Response Act (FFCRA)Employers with less than 500 employeesSick employeeSubject to federal, state, local quarantine or isolation orderExperiencing symptomsHas been advised to seek self-quarantine related to COVID-19Employer must payEmployee caring for a family memberCaring for an individual subject to an order described or self quarantine as described previously;Employer must pay ? regular rateAdditional paid extended family leaveTax CreditYour workplaceTemperature checksOnsite nursing: TrueCareEasyBadges - temperature checking kiosks986 LabsHand sanitizerSocial distancing, masks, minimize break roomWorking from home:Upgrade written policiesTrial periodBalance work from home with in officeDemand availabilityUse as a recruitment toolNew OpportunitiesLabor market disruptionReal estateEquipment and inventoryM&ABankruptcy as a cash flow strategyLessons LearnedCashSupply Chain DiversificationTechnologyProfitable/Unprofitable product linesQuestionsAre coworkers who have no symptoms, but have had direct contact with people that have required to self-isolate?There is no law here - just guidelines from CDC and OSHARead the guidance, look at what other people in the industry are doingWrite up a company policyThere are unanswered questions about privacyDoes an employee have to bring in a doctor note that they were tested positive for COVID-19?No documentation is requiredIs there a spreadsheet from treasury to help us monitor progress towards forgiveness?Yes, treasury department website has resources on PPPFAQ document on website updated weekly including information on forgivenessDo cell phone expenses count as utility in PPP related expenses?No they do notTalk to your lender they decide on what is forgivable and what is notWhat if you use PPP Money to pay for employees out for testing?You can use this, but can’t double dip - can’t go back and get the tax credit later from the governmentThe tax credit is designed to reimburse you for that costAre companies notifying all employees of a positive test in the office, or only those who have had close contact?There is no written law on this, subjective to company policyToday’s recording will be posted on the AICC Covid page on Monday.? ................
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