Help Me With Sign Florida Banking Document

Help me with industry sign banking florida document easy

welcome fellow business brokers thank you so much for joining us today i'm really excited um to have uh tammy tease with us from live oak bank how you doing tammy i'm doing very well jim thank you for having me well thank you for being here we also got steve mariani from diamond financial how you doing steve i'm doing well jim and uh and thanks for organizing this and getting this information out i think it's important to the broker so we appreciate we appreciate you doing this absolutely steve i appreciate you uh you joining us today uh so today we're going to be talking about the paycheck protection program um and it's also in short it's called the ppp um first we're going to be talking about the forgiveness of ppp monies and then we're going to be talking about the new round of ppp monies that are coming out um you know if you go back to the cares act that was passed in march 27th of uh 2020 that was when the first round of ppp monies came out and then um on december 27th of 2020 there was a new act that was signed into law and that act was called the constant constellated appropriations act um and i just been calling and a lot of people just been calling it the cares act two so uh let's go ahead and begin uh let's start start talking about the pp forgiveness um you know steve maybe you could start off you could tell us what the criteria is for the forgiveness of the first round of ppp monies if you don't mind sure sure and actually what i've been monitoring these last few weeks and maybe even more than a month is how soon forgiveness would happen after you applied for it with the lenders because if you look at the uh the rules surrounding acquisition loans if there's a pvp in place there's quite a few hoops that you have to jump to i'm sure anyone who's watched any of your previous webinars is aware of that you know putting money in escrow and getting everybody signed off and all those other things so really what i was monitoring is well if you and what i've been preaching to the brokers really has been get on top of your seller and make sure their ppp stuff is ready to go in so that soon as that forgiveness portal opens you can get your information in there and what i have learned is uh they're getting turned around pretty quickly so that's a big plus and that was what i was hoping for uh what i'm noticing is is once the lender opens up their portal and receives that forgiveness application the clients are typically getting forgiven within one and two weeks but they're coming with a caveat that says we're waiting for sba's forgiveness and i'm monitoring both of those time frames and that seems to turn around in less than a week also so i'm looking at from start to finish anywhere from one to less than four weeks which is a great thing for our acquisitions moving forward as far as a concern and holding up the closing so i am seeing the forgiveness get done pretty rapidly uh whatever meantime we're putting the money's in escrow right we can just go ahead and close as long as everybody all right once you once you get that forgiven yeah once it's forgiven officially and you got documentation says it's forgiveness all those rules go away and it's go ahead and close like a regular loan which is a wonderful wonderful thing absolutely but uh that's what my big concern was because based on the sba cares act and timmy can attest to this i think they had up to three months to make the determination after it got to sba so that's where the big concern was when the lender submitted the forgiveness application how long was it going to take to get through sba's process but uh they're turning them out pretty quickly and tammy can feel free to shed light on us and what she's seeing but uh that was my big concern as far as holding up the acquisitions moving forward so i think that that's off the table as far as the forgiveness period from eight to 24 weeks was the easy fix you know a lot of people missed the eight week window by saying hey if i'm just doing payroll it's nine or 10 or 12 weeks well that took that right off the table too so they have and i have seen these last couple months ease up on the restrictions on on getting the forgiveness and them happening quickly that's my take on it i'd love to hear from tammy and what she's seen on it yeah no i totally agree and i think that you know some of the smaller institutions it's happening a little bit quicker um just because of you know logistics and things some of the bigger institutions it's taking a little bit longer but then again they made a lot more loans as well so and plus i think you know being able to have you know be able to walk into your credit union you know and be able to you know kind of have that conversation with somebody that maybe you dealt with um through the whole process as opposed to you know maybe a department um so we're seeing a little bit quicker you know with some of the smaller institutions but overall as a whole it is going a lot quicker than we thought um applications are pretty complete um and i definitely agree with the eight weeks versus the 24 weeks that made it a lot easier for people um the scramble you know for to get documents and to make sure that they were doing everything right um so i am pleased to see that it's going um that it's going a lot quicker um because there was a lot of unknown uh at first and i think that that was an understatement tammy yeah it was making people very anxious to get to the forgiveness process before they even got their money to know that what it would look like but i think overall it's gone very well for what we kind of started with and had to work with even though there were a lot of changes through the application and and you know what the rules were but i think that there was a lot of good communication that allowed everybody to kind of get to this point and now you know it's going a little bit smoother all right great what about like um you know with the new addendum to the cares act you know the karazak2 if you want to call it that there's new rules to that right the one-page testament form i mean i i think that's a pretty cool thing in there i mean we we've been talking about that last year that you know what um you know 80 of the loans out there for the ppp were under 150 000 and um you know there's 5 000 sba lenders that or 5000 lenders that did it right and there's usually only a little over 2 000 sba lenders so that was kind of a nightmare so this is a really great situation not only for us as business brokers but business owners that want to sell them business owners in general right yeah i totally agree and i think that that cap at that 150 it's a good number it's probably a pretty decent average for what we would consider to be a small business owner for that time frame you know when you start getting up and over that yeah absolutely you want to do a little bit more research you want to do a little bit more due diligence and make sure that you know those dollars were allocated properly but you know i think 150 is a great number like you said jim that's probably 80 percent of what the ppp money applications were so that's going to make it so much easier for the business owner and obviously for us as you know people get involved in these transactions too um just wipe it clean it was done they did what they needed to do and let's move on so this this form it's basically just signed the form and it's just saying that if i if i got ppp monies i'm just basically signing the form saying that i used it for what i was supposed to use it for labor and and and um i forget what else employees and rights yeah direct expenses and i use it for the things that i was supposed to use it for and then the bank takes my word for it after i signed it and and bam you're done right so so steve you deborah carman and i did the petition last year for this thing there was a congressman out of north dakota that was sponsoring a bill to this and you know we had over 2000 signatures i'm sure ours was a drop in the bucket but i want to lie to myself and say that that we had some part of getting that passed i think it was all you jim there's no doubt in my mind i do want to talk about a couple other things in that ppp uh what tammy alluded to right i think was 86 or 150 or below i was in the mid 80s no doubt the other big thing in this bill that matters to the previous ppp people is really the tax implications when they first came out they said it will not be taxable but you cannot expense those expenses paid for with the ppp money which in effect was taking those expenses off of people's pp uh p ls and flowing the money right to the bottom line which is what all the cpas around the country started getting upset about they said you say it's not taxable but by removing those expenses it makes it taxable so in this new bill it does say you can leave the expenses in and that ppp money is completely not taxable now one of the things and jim i know you've heard me talk about this on webinars too we saw cpas putting it on p l's left and right and like i said after the first cpa or two when i called them they said that's to make sure that that small business owner understands their tax ramifications uh and they'll because all they look at is the bottom line and do the math in their head to say okay i owe 30 in taxes and that's what they allocate for so that's why cpas were doing that but now that is a great thing that comes off and all the expenses stay on the p l so i think it makes it a easier for the broker's side to calculate sde but even more importantly it saves all those small business owners that amount of taxes basically a third of what their ppp was so that's the other big thing that i saw in this bill that matters to the majority of our our business owners it's great that there's gonna be a lot easier to do that let me ask you this question it said that um this one page of testament form that that came out which i think is phenomenal i mean i think it's fantastic um it says that the sba has 45 days from the passage of this act without which that was passed december 27th to come up with the um you know the the procedures and how they're going to actually forgive the monies on that so that puts out the february 10th if you're not selling your business and you're just getting the applying for forgiveness or signing the assessment form should somebody wait till after february 10th or do you think it doesn't matter i guess it doesn't matter right personally i don't think it really matters um i think it's a great question but i think that you know all in all um if we're looking at today's date even if somebody is starting or going under contract today it's probably going to be taken care of by the time you get to close or super close yeah that's how we're looking at it we're looking at as really a non-event and not paying much sense to it because it'll take care of itself all right well you guys have anything else about the forgiveness or should we move on to the new round of ppp monies yeah that's that's another whole discussion all right let's talk about the new monies so but before we begin you think that or do you know or have they said the new round of ppp monies that are coming out that if that is also going to be a one-page testament form or or not i don't think that they've given that guidance yet we're still waiting on a lot of you know the the details around process um you know so we do know qualifiers and different things of that sort but um the the hope is by the end of the week that will have some information on the process whether it's the form or how they go about applying whether it's an increase to their current loan or or they have to apply for a whole new loan so we're just waiting on some of those details so we're not clear on the process yet okay and when can somebody apply for it steve when can somebody apply for the um new ppp monies not until those guidelines come out which is what the lenders will be using to to compile their application uh we don't have an official application of what it's going to require you know the talk on the street is by niacico depending upon the hardest hit and i do have some of that highlighted in the bill but all it refers to as there are some asset codes that are hardest hit but it doesn't specify them so you know the applications might be different per industry we don't know what any of that looks like at this point we do know that they are going to um try and help them the worst affected businesses and that's a great thing um but part of me thinks it might not be worth it for a lot of uh sellers or even borrowers to apply for the second round i don't know what the criteria is yet uh that's really going to be the deciding factor but they gotta they gotta let us know pretty soon but it's gonna start pretty soon because doesn't the second you have to get apply for the ppp monies by march 31st of this year right so you know we're three months out so they gotta let us know what the criteria is and the start date and everything like real soon right well there is the qualifiers already that they they've given and it's it's tied to revenue a decline in revenue of 25 or more quarter over quarter from 19 to 20 first quarter second quarter third quarter fourth quarter whichever that decline happened and it appears that they're going to allow p l's to be used from you know 2019 to 2020 to make that determination but that's going to be the main thing that we didn't have last time is you have to have you have to qualify for that revenue decline first before you can apply for assistance if you had a decline in revenue then you can apply for additional assistance is that your understanding as well steve absolutely and what a lot of what i'm hearing is well i could always find a quarter that was down over the previous year depending upon my seasonality and especially with covert throwing stuff off and a lot of the questions i'm getting but we recovered the end of the year we were just down that april may june quarter should i apply overall my revenues wound up basically flat from 2020 to 2019. but under this criteria i could apply because my second quarter was down should i and that's where the gray area comes in and the process matters or what the forgiveness looks like because maybe they say at the end of the year if your gross revenue was still down fine keep it maybe if it's flat you give it back i don't know what that criteria looks like so that's why i'm a little hesitant to tell people yeah go ahead and get that second round of not pvp the other end of it well i'll tell you you know the the last year in 2020 that people got ppp monies i mean a lot of business owners thought you know a lot of business owners thought they'd be affected and i saw business owners get the ppp monies and their business actually went up yeah you know so um then they they still got that ppp moneys and they didn't do anything wrong they they thought their business would be hit and it just wasn't hit remember if we go back to april we were all deer in the headlights we didn't know what was going on and uh you know so at least that's a good start to 25 um you know during a quarter but i think you're right steve and just common sense says that that should be play out all the way through the end of the year because we shouldn't be giving government money to the people that don't need it you know my suspicion is that's kind of why they put that qualifier in there and again nobody did anything wrong last time it's just that we did it so fast and furious and we just wanted to get monies to people that needed it um and then you know they didn't know what was going to happen with their business so i suspect that's why they put you know some kind of qualifier in there this time to make sure that the people that truly need it are the are the ones that are getting it okay so when does somebody have to have had to own the business to be able to qualify for the second round of ppp monies i i do believe you had to own it um yeah i think it's february 15th of 2020 yeah yeah i think that day stayed the same didn't it yeah i believe it did yes um so do you this is a this is a very interested in this question we had 5 000 lenders last time you know that that p rticipated in the in the program and and going back to what we already said only usually there's only a little over 2 000 sba lenders in the country do you think we're going to have so much participation by lenders this the second round of ppp monies i can tell you that word on the street is will be about 30 less now will that really happen what the criteria comes out with changes that who knows but i can tell you what drove that number was the torture on the forgiveness side after the first round of pvp meaning you know when they before that one page at that station form it was almost like lenders had to review your forgiveness application and make a determination that was the critical deadly piece like you just alluded to almost 5 000 lenders wrote pvp right 1700 are really sba experienced so you had the other what 3 300 lenders without a clue god forbid they had to review that those financials or make any kind of determination they weren't qualified to do that and i've been preaching about this for you've heard me jim many times for months and months and months where you know there were lenders that hired 400 you know temporary staff members just to produce pvp well hell you're not going to train them on lender you know review or document review so that one-page attestation really was a big boost for the lenders and that's really what drove all the stats that i said saw that said we're not doing this again if this comes up again because this is a nightmare so i think that that one page is going to help bring a lot of those lenders back i'd like to see them all come back because i want to see people get help but we don't know we don't know if that one-page attestment form is going to be uh you know for the second round of ppp monies yet right right but it made the first round a lot easier and at least it made it a little bit more appealing to all those lenders that said we're not reviewing the 4 100 loans we did we're not doing that you know i just i just i'm just going from a common sense approach here though you know this is what i said last time last year was this is common sense that the government doesn't want to show their hands i think that that one page in my opinion this isn't a fact my opinion that the one page of testament form will be used for the second round of ppp monies they just the government just doesn't want anybody to know how easy it is to get it waived yet that's my opinion so don't you know wouldn't it be the first time jim yeah that is why a lot of times information dribbles out it's a lot of times by intention i mean let's face it september 27th we were still waiting for the acquisition guidelines which came out what three days later thank goodness you know after after whining about them for months and then not coming out the last four or five weeks before that september 27 deadline we were then telling the lenders or the sba don't tell us anything just leave us alone now we don't want to hear from you until october and that was a great thing because had they come out with them guidelines the week before hell hundreds of millions wouldn't have closed yeah ben ben's chiming in right now in the chat um and he's saying don't don't assume anything is common sense with the government that's exactly right that's why tammy and i have a job right i know right but i also have to wonder if it is going to be driven by process too because if the process for new ppp and they qualify is just to ask for an increase to their current ppp and they already have 140 000 and then they get another 60 000 do they then not fall within that guideline so that's a bit of an unknown too i mean it might be a stretch but again we just don't know right so when they when they if somebody applies for a new you know uh uh second round of ppp monies does that get added to what they've already lent on or is that a whole new loan that's being opened up but i guess i mean and that's the two part i guess the second part of the question is we know there's going to be or steve's projecting that we're going to have 30 less lenders participating in the program so you know you you might not be able to go to the first bank that you went to the first time so like do you guys know how that's going to work or is that still unknown it's still unknown what the process is going to be um whether it's going to be if you have a current ppp you have to go back to that bank and just ask for an increase which might make sense but if you're a new customer applying you didn't apply before and now you're applying you could go anywhere um because it would just be the new process i think that the for the current customers is where it might get a little bit convoluted until we know um because you could then make the argument that they fall within that 150 before they ask for their increase so should it be two separate that's true okay so the broker was asking i guess he's having a lot of buyers asking him this and uh he sent me an email the other day and he's got a lot of buyers asking him this and the buyers are asking basically if i buy a business that has you know and can can they apply for the ppp monies and an asset sale i would say definitely not what about a stock sale well based on the acquisition guidelines they're saying stock and asset are the same okay that's the acquisition guidelines that came out what october first or second yeah they're saying we don't care if it's a stock or an asset they're looked at as an acquisition change of ownership and they're both the same so that that kicks in the escrow and i'm guessing that's going to play the same with the second round of pvp that the acquisition guidelines are going to remain consistent but uh i guess we'll see that once it comes down so somebody can't somebody can't buy a business and then apply for ppp monies on that business they've had to have owned it probably since february 15th of 2020. i think that's the bottom line that's correct yeah and and i think the philosophy behind that is that you bought the business during the pandemic you knew what you were kind of getting into and it was doing well so you were approved alone and all of that kind of all happened so then now why would you be applying for ppp i mean unless you know we go into another dire situation where people have to close down which i don't think we're going to get there but that's just me and so i just wanted to say too is i i saw the notes in my notes it says that and i just want to make sure everybody on the phone calls on the webinar is aware of this that you have to keep people that have ppp monies have to keep records of their employment for four years and other records for three years yes um now with the new ppp monies it goes past employees and rent right it's including more things this time what does it include i didn't see where it expanded did it expand what you could use it for it did um so and just i'm just going to read it right off this text it's now um allowable in expenses um could include operation expenditures um if a company had to pay for any kind of software cloud computing or any human resources or accounting needs for people to be able to work remotely um and i think you know obviously once you submit that they'll determine okay was that you know a need a desk or a computer or what have you but it sounds like they're going to include that and any supplier costs for ppe that you bought to make your business compliant hand sanitizers masks whatever to be able to to use um and then any um any uh supplier costs um for the recipients operations um that might have been perishable that may not you may not find a lot of that um and then additionally any covered property damages costs related to public disturbances that occurred in 2020 and are not covered by insurance um so those are the the four additional things that um they're including in expenses seems pretty vague right now so i that what we don't know is would you consider a computer you bought for your employee to be under that operation expenditure i would say yes what does what does the sba say but it makes sense because people had to shift gears and they had to try to do business the way that they had to and they had to spend money to do that you know restaurants had to put up partitions and hand sanitaries their stations at all airports and things we never thought yeah a lot um is there anything else about the ppp monies that we may have missed either with the forgiveness or the the um the second round and and please anybody that's listening right now if you want to raise your virtual hand um i can chime you in and you can ask questions to steve and tammy um we're not going to build the answer too many questions live because we got a webinar right after this where we're going to be talking about sba loans but go ahead and raise your virtual hand if you have questions i know some people were asking questions in the q a section but if you really want your question um asked please raise your hand but steve tammy do you guys have anything else that we may have missed about the ppp um i'm not sure if this is going to be part of the ppp or well it is part of it um for existing loans so important to know if you're you know kind of having these conversations is that they did approve some additional payments we did have that six month subsidy um on loans that were closed before um september 27th and anything that was existing prior to march 27th um had six months of payments made for them so what they are including now is for those folks who had those loans prior to march uh first i believe it was uh if they were closed they are going to get an additional three months of payments made for them there are certain industries which steve alluded to which we don't know those hardest hit industries yet once we get those codes those industries will get an additional five months of payments those payments will be capped at 9000 but that could be significant for those industries and for those people that already had loans existing so they'll get an additional three three months of payments um and so that will go to their lender to get those payments for them it's not part of the ppp process but i think it's important for those people to know great lisa was chiming in on the chat and she was saying that um you know i had mentioned the three year four years for um labor records you got to keep that for the ppp and then three years you know records for everything else she's saying that she just got a letter from one of her clients that was six years um you have to keep the records um so i'm thinking maybe the sba is saying three and four and maybe the banks are building on top of that criteria that's what i'm assuming with that so obviously always follow what the bank is is gonna the lender's gonna require i'm thinking that's probably more irs than anything oh because we're war mandated to seven years so i am guessing it's going to be more of an income uh expense thing with the irs good point steve all right let's bring john in um john has a question john let me let me bring this to a uh how you doing john where you calling from you got your mute on by the way hold down your space bar there we go greenville north carolina all right welcome john from north carolina thank you very much i enjoy your podcast question is one of my clients um complain about the circumstance and i i don't know if it was driven by their lender but they had an idle loan and a 3p loan and they were told that they were going to have to repay their idle loan of 10 000 does that been addressed in this second wave i believe it is and i think that that 10 000 is what now automatically being considered a grant and forgiven but but tammy if you know more about that yeah it's my understanding as it reads that before they were deducting if you got that ten thousand dollars from your forgiveness and now they are not right great thank you thank you john hey we found a question we could answer [Music] [Laughter] i forgot to ask you guys this and if anybody else has any other questions raise your hand and then we'll get to the next webinar this sba but um while we're waiting to see if anybody else has a question um has there been any changes to the idol situation or no i haven't heard anything or seen anything i was just curious i haven't read anything i did see it was mentioned someplace but i hadn't gotten deep into that uh the writings there i don't think anything major changed except for that ten thousand that i know uh yeah i didn't see any major changes i think uh they'll replenish it so there's more because it did run out at one point so they'll probably just they'd probably just reallocated some more money to it but i don't think that that will change too much that was pretty specific all right andy coognette has got a question he's got a really good question he's asking um is there any uh financial barrier beyond the 25 lower quarter to qualify for another loan even if they are now profitable it does not say that no currently it's just tied to that 25 percent revenue decline for a quarter for one quarter order it does not say year end it's so that's why we're thinking the p l's will drive that so they'll get quarter over quarter for each one um and hopefully they'll be more specific about what they want in order to make that determination because you could make an argument you could have been down 50 percent in third quarter and that really hurt you right and so then that kind of flowed over into fourth quarter but then at the end of fourth quarter you were profitable so i think there's an argument to be made there so i i think we're really just going to need to get drilled down to it okay all right excellent yeah and there are other programs if it is an existing business and not an acquisition which we'll talk about in the sba side there are additional incentives on that side also to help existing okay we got another question from mike mike where are you calling from um this is mike from sun built in but says the maryland maryland oh welcome mike thank you so much i'm just uh wondering we closed the deal and the seller had three hundred thousand dollar ppp loan and based on recommendation from her cpa she decided to pay money back to the lender because she was told she could she has to pay taxes on it and her entity is actually still in existence and is she able to go back to the lender and change the status and uh complete application for forgiveness or it's done so what do you say is she the sailor did you say did she sell her business yes my my my opinion of that is that's a question for her lender um because if she already paid it back you know that's going to be for them to say whether she because it's kind of the the transaction's closed in my opinion um so it sounded like you know somebody told her not to wait to find out what was going to happen with the tax revocations of this and now they've come out and said that there's not going to be and so unfortunately she got maybe caught in the crossfire but i would definitely suggest she talked to her linda about that all right yeah if she paid the full balance back i would have to agree with tammy there's a slim chance of her getting it back again now all right we gotta we got a question from gregory here um so if you received an idle loan in 2020 can you apply a second time in 2021 do you guys know i just want to say they're not experts on the idol situation so we aren't i believe that you can from what i know but don't write that down all right well hey i think that should wrap it up with a ppp because we're going to do a webinar right after this and we're going to be talking about sva loans like right after this so stay tuned um but steve tammy i really appreciate you guys talking to us today about ppp thank you so much of course our pleasure giving us your wisdom i should say so anyways for all you business brokers out there my fellow business brokers keep working hard keep working smart keep making those buyers seller connections and if you haven't done it so already please subscribe to my youtube channel it would be greatly appreciated until next week take care bye