Industry sign banking maine month to month lease computer
I think the very first question I want to ask Eric is why are some banks and financial institutions starting to decay phone applications and why are some not what's going on okay so the SBA just modified this program actually last night and so fish third has taken position that we want to make this process efficient we want to make sure that our customers have quick access to capital and due to the fact that the guidance was just received last evening we are delaying taking those applications we're trying to make this a customer experience exactly what you expect while we are moving quickly we want you to know that we're also being very thoughtful to ensure we're keeping your long-term business interests in mind well I'm do the right thing for your long-term needs applications will be taken next week we're going to use an online portal and so because of the changes we just felt it was in the best interest to ensure that we get it right we get it right the first time and so that our customers receive the money that they need to get and they get it quickly let's let's start back at the beginning so Eric describe if you would the cares Act what's it all about okay so the cares Act is basically the net economic need due to the coronavirus the cares Act is a acronym for corona corona virus feed Relief Economic Security Act again I'm sure you have the slide up and everybody's looking at it but it's a two trillion dollar stimulus package but wish to allocating approximately 350 billion specifically to help small businesses so it's really to make sure that we keep small businesses up and running and that small businesses do have the ability to keep their employees employees so that's really what it's all about and the payroll protection program in particular seems to be getting the most attention so tell us how that's gonna work okay so the payment protection program is getting the most attention I will also say that there are other programs available that we'll touch on briefly but what this does is it allows sorry my other computers make a lot of noise there it allows for small businesses with 500 or less employees to get loans up to 10 million dollars it's limited to two and a half times their monthly average payroll for the preceding one year time period this will allow employers to have salaries to pay for their employees and there are other areas that they can play as well so rent lease payments things of that nature but again the main objective is to keep employees employed and that's really what the program is about so as we just walk through this I know what small businesses with less than 500 tell us who can apply ok so as far as eligible entities I'm sorry if you hear that noise in the background I'm getting lots of emails on my own computer so I apologize to that so let me just get to the section here that I want to talk about so any small business with fewer than 500 employees any small business otherwise reach the SBA standards 501 C 3 s with fewer than 500 employees individual who operates as a sole proprietor individual who operates as an independent contractor individual who is self-employed who is regularly carry on any type of trade or business 503 1900 major additions that meet the SBA standards and then also as an accommodation for suit the food service sector they are allowing for the 500 employee rules reapplied per physical location so if there is a restaurant franchise or chain they are allowing for the various change the various restaurants to apply even though in aggregate total they may exceed the 500 towards one of the ironies of this is that some of the key small business organizations out there are eligible at this point for the program such as a Chamber of Commerce or the right place program or the Better Business Bureau we can't apply even though I just go through the whole exercise of preparing to apply I'm not going to be able to but if you cannot sing almost everybody online can how do they do it so as far as the application process is concerned we at the third are going to be utilizing an online portal and that is one of the reasons that we are delaying the process until we can get that online portal available and up and running on slide 11 there is a sample application that is out on the SBA website so you can go out to sba.gov I would encourage you to do that so they can get a general idea of the information that you're going to need and the questions that would be asked of you but so that is what's going to be required as far as just the basic information all about your business there's a bunch of yes and no questions that you'll need to answer as well you will need to provide documentation as far as calculating what your payroll costs were so salary wage commissions similar compensation payment and in the form of cash tip or equivalent payment of vacation parental family leave medical sick leave allowance for dismissal or separation payment required for provisions of group health care benefits including insurance premiums are also included payment of any retirement benefits are included also payment of state and local taxes assessed on compensation employee that's going to be included in there so those that's the type of information that you're going to need and again like I said for our purposes we are going to have an online portal or what's that's up and running we're going to just need some basic information as well about when your business started so if the annual revenue is you know common information like the business mailing address owners with 20% or greater ownership financial records we are going to need to have financial records for your business as to how you calculate your average monthly payroll for the last 12 month period prior to the application and as far as that information take form as information that if you have a payroll processor you can get those records payroll tax filings form 1099 miscellaneous any bank records that you may have income and expense from a sole proprietorship which would be on a personal tax return if you don't have those types of supporting documents bank records anything that would be sufficient to demonstrate that the qualifying payroll and very important that we have that information to validate what you're applying for I will also say that as far as the forgiveness and that is one of the parts of the program that is extremely important is that 75% of the loan amount needs to be going towards payroll and so if you take that allocation of funds and utilize that you know for a greater amount so so you prepay your rent expense or something like that you might get in a situation where that part of the loan may not be forgiven and so it's very very important that the whole purpose of this is to facilitate keeping your employees employee and and that's really what the the intent and the spirit of the program is it's pretty essential isn't it from your understanding Eric that the businesses used really accurate numbers that they can back up because if they don't they might find themselves later on on the wrong end of a relationship with some entity that's going to be checking out their numbers that's correct as far as the application there is an attestation that the business owner will certify that that information is correct and that is a accurate representation of what the average payroll was prior 12-month period and as far as our financial assistant will be our responsibility to also double-check the accuracy of that information so that will be corn quote the safety net to make sure that the numbers make sense so there's going to be a lot of questions about this particular program but before we go to those let's talk about the other Co mid-nineteen related to all business relief loans tell us about those okay so there is the SBA economic injury disaster loan program so the key IDL and that really provides for small businesses to get working capital up to two million dollars though if a business is not closed but is having a temporary loss of revenue they can make application for that particular loan and pay back on that would be based over a 30-year amortization for-profit businesses interest rate tentatively and obviously oh this is such exchange you know this is a very fluid situation with the SBA for profits is 3.75 percent non profits would be 2.75 percent so that is a program that is available for a couplet that might be seeing delay and collecting the receivables or maybe sales are down just due to the fact that there is economic uncertainty at this point in time so again that's another type of pretty facility that would be available another type of program for those of you that already have an SBA loan whether it be a seven a and that's type of loan or a five the SBA is going to make payments for the next six month period so any loan that you either currently have or if you apply for women are approved for one prior to September 27th the SBA will pay principle and interest for a period of six months so again that's very nice program that's going to defer those payments for the six-month time period and if you do have them already in place it will defer those for six-month time period one of the things that I will mention is it relates that if you were set up on an automatic payment program you will need to turn that off or else the bonus will still be taken out of your account so that's very important that you do that and if you wish to continue to pay you can do so if you don't need that deferral but if it's set up on a hospital payment you need to turn that off and after the six month time period you want to go back on automatic payment and you'll need to reinitiate that automatic payment program so ended that there's the Express bridge loan program and this is set up for somebody that might be applying for the e e IDL loan and they need $25,000 quickly to meet current obligations and that is a way to expedite getting that while your other loan application is processed quick turnarounds and once the he IPL loan would be approved then that would import or in total the bridge lock oh that would be another type of credit facility that would be available as well one laughs see here on the eiv L alone and again I apologize kind of jump it around here there is also if you're applying for that there's an emergency law may even get one thousand dollars all of this is available I would add on the SPF website so it's a loan advance of up to ten thousand dollars so that businesses so they can get that if they're thinking to relieve any current financial experiences that they're having so Aaron business banking for a long long time how would a small business person figure out which one of these loans is the smartest way to go how do you can you do that well yeah and again it really depends upon what your particular situation is number one hopefully everybody has a relationship manager business banker that they're currently doing with business with so I was first to reach out to that individual to discuss your particular situation but above and beyond that the PPP program is really for businesses that might be closed at this particular point of time and they can't make payroll and they want to keep their employees gainfully employed and so we anticipate that will be the program that has the most applications but other than that you know if you're in a business where you know you're still open you're still manufacturing a product or providing a service and you're just seeing a slowdown due to the fact that you know we're kind of a stay at home and people maybe aren't buying your product or utilizing your system then one of the other programs might be better suited so again I encourage all parties that are dealing with this situation to reach out to their banker because they'll be able to have that dialog and just be able to advise them appropriately is there any way of going because I know there's a lot of small businesses out there that are really in a bit of a battle right now there's a real cash crunch is there any way of knowing how quickly if you apply today for this payroll protection loan how long it's going to take for that to process and for you to actually get the funds that you're applying for I wish I could tell you I knew that answer unfortunately I do not I know that last year for the fiscal year for the SBA they did 30 billion dollars for the whole year and lungs and the first tranche of funds that are allocated for this are three hundred and fifty billion dollars so it's you know ten times as big as the last year correct well so that's one of the reasons that we chose to hold off to do the program because we want to make sure that we have all the details in place that we have the systems in place so that we can do this in the most expeditious manner possible I do know that other financial institutions are taking applications today I don't know if they're processing them today but they may just be taking applications but I can't speak on behalf of other institutions what their process is at this point in time I think I think they're building the plane as they're flying it on this one huh that that's probably true that's kind of what we're doing like I said and you're aware this too as far as the presentation material the sample application that we had in there yesterday is is now different today so it was changed as of last night so if we could walk back on the interest a little bit and in real quick terms Eric what's the interest obligation on the paycheck protection program if someone applying how's it going to work okay so the ultimate goal will be that the total loan will be forgiven as it's utilized for payroll seventy-five percent of it will be utilized for payroll for employers and the remainder can be used for the other eligible charges it'll be no interest in the event that the funds are not allocated as such and it would be a two year payback at one percent which is unbelievable what an opportunity yep that's pretty low I'm not a skating that people use those funds for other purposes when its intended purpose is really for payroll but in the event they get into that situation you know it would be a two-year payback at one percent the categories of businesses that are eligible it's pretty broad cover I mean they're trying to make this as broad a cover as possible except for our particular business category which Business Association in general and it's most any 501 C 3 nonprofit 19 which is a Veterans organization I think and then you know you look up there at the I don't everybody can see that top check one those are the people live eligible and it's literally just about an exclusion made for the Better Business Bureau but just about everybody it's eligible for this and it is geared for small businesses and there is not a revenue component to it it's basically an employee component so 500 or less employees and even with that if it's in the hospitality industry there's an exclusion for that as well so one of the questions that a participant asked prior to this and I think we may have covered we as Manuel reiterated and this is the specific question and customers charge cancellation fees like hotels rental cars conference expenses and air travel that ended up having to be they just had to eat that loss to be used for those purposes okay I don't know if I understand the question correctly so if the employer or the employee had those thoughts I'm I'm going to read it in customers charge cancellation fees like hotels rental cars conference expenses hair travel expenses with a loan money so in other words they had booked something and then they had to eat the loss on those particular kinds of expenses those would not be considered normal payroll costs and it's not it's not defined anywhere in here that those would be applicable for this particular program could they use the loan money to bring back employees that they'd already let go absolutely yes that's spirit in the intent of this particular program I can't see any of the other questions so I'll ask somebody else to chime in who can if there are other questions being asked as I can't see them yes Phil we have a number of questions one of them is and I here I'm reading this as we come in here I are we requi
ed to sign up for the six-month sba payment of interest and principal or is it automatic okay when there's I'm assuming they're talking about the deferral on the SDA yeah so they that is automatic the only stipulation that I indicated on there is that if they just set up with an automatic payment with their lender they need to cancel that or else payment will company but other than that the SBA has indicated and it is clearly outlined on their website WWSD al that they will not be taking payments for the next six months and if a borrower chooses to make those payments they can do that as well but they will not just take the pain once we submit our application and if it gets accepted can we deny acceptance of the funds if our business forgiveness circumstances change absolutely so if they get approved and you know before the funds are deposited into an account or even if the funds are deposited into account they can immediately pay back what period of time does the 12-month payroll period cover 2019 annual or some other different time period the payroll period is four and it depends on for non-seasonal employer it would be for January well I'm hearing one make sure given the accurate looking I think the guidance I got this morning as I was going through the spreadsheets was they used our 2019 payroll but then they added in some data from the first quarter of 2020 for some other calculation but I think when you paid it is it is for 19 and then the other calculation is for seasonal employers so for seasonal employers it's 2 times the average monthly payments for payroll cost for 12-week period ending February 19th or March 1 19th decided by the long recipient and ending in June 30th of 19 okay one question here what is included in the term utilities gas electric phone cable is there is there a list somewhere of what would qualify as utilities it does not get that granular and specific about utilities it I mean that's something that I can take as a take away and I'll be more than happy to research that and then I can get that information to you and I'm assuming that you can get that back out to people okay we will we will absolutely share that out and answer when we get that but the hey chart and just I found one piece of information says payments on utilities it does reference these specific ones says electricity gas water transportation telephone or Internet okay that helps answer that question there there are some questions about the timing is there a concern that the funds will be gone before they get a chance to apply well the applications are through June 30th and we have been told that you know if this first processor funds gets depleted that it will be will go back to Congress to get a second tranche a third Tron or whatever so we do not believe that that will be the case I know you talked about this already but if you could what are the terms expected to be for those funds that are not forgiven uh it would be paid over a two-year period at one percent okay I when it comes to looks like a seasonal employer I will not be operational until I get new jobs in July in August so I'd like for my staff to be unemployed until then can I still get this cares at so I have funds to pay them when they come back in June the intent the spirit and intent of this is that you will pay them now that is unique situations and again I don't want to give misinformation about that so why don't we put that on the side and that's something that I'll have to get more clarification and fill his talk about this a little bit the Better Business Bureau doesn't qualify but what are the rules for nonprofits because there's there see sixes there's the threes what qualifies and what doesn't well I read as far as what qualifies from eligibility standpoint so it's 501 C 3s with fewer than 500 employees and then the other is a 501 C 19 veteran organizations that meet SBA standards size standards those are the only two that I have and the information currently available I do know that there has been a plethora of other documents that have asked about religious institutions and other institutions are they eligible or not and we're still waiting to get clarifications as Jill said I think we're flying in a plane that we're building right now so more to come on that okay here's a question from a business that she says we have two different closely related companies with separate names and separate iin numbers and both owned by the same person do we file these as two separate PPP loans yeah separate loans with the separate IIM numbers our payments to independent contractors consider the same as payments to employees yes so Gary there's your answer for that question can you apply for the Eid L also so can you play more than one of these loans you can but you can't double bit so if you're applying for the PPP loan and the Eid L you cannot use them both for the same purpose so you might apply for the Eid L alone for some working capital but you can't use those funds also for payroll purposes we're getting questions about when the eight week period starts on this so is it from the date you get the money is it from the date you apply for the loan how's the time line work on that from the date that you get the proceeds a little while all right so when you actually get the money that's when an 8-week starts not from application because as I previously indicated we don't know exactly how long the application process is going to be all right one question talks about an employer now who has employees would like to apply for this but worries that business will slow down and they won't be able to sustain that employment going forward okay and so as long as long as maybe long as they've used that fund those funds to pay those employees for that time period then they can you know get the documentation to show that 75% of the proceeds are used to keep those employees working at that business and then as for forgiveness on that loan portion one question is I'm the owner broker of a real estate office am I eligible so is he the sole owner it is not clear in the in the question real quick if they're the sole owner my guess is it's probably a an individual okay look if he again you know there are salary restrictions as far as how much he he would be eligible for but again it says say so proprietors so again I don't know kind of entity he has if he's a sole proprietor and uh he should be able to apply for it okay will fit third help new customers for one of the Eid L or Express bridge loan programs or is that for existing clients only at this current time we are looking at our existing customers with that said we do realize that there are certain financial institutions that are either a non-certified SBA lender or not participating in the program and we are not going to turn those individuals away however it will be a longer process under the u.s. Patriot Act know your customer and all the other due diligence that would need to go into that process will take longer because we would need to go through that whole documentation process and open up the checking accounts because that's how it's going to be funner than everything else so I will tell you though our main focus is on our current client base at this point time but we won't turn somebody away that their financial institution is not participating this point comes from a medical office our office just had a doctor leave our practice so our payroll has gone down as of March 26th and you're not replacing her should we Jennifer payroll amount from our application yes okay one question about the employees do we pay a full 40-hour week for every employee how do the hours work on it depends on how they were being paid previously so they're going to do that our payroll calculation based on the historical data so if they had a bunch of part-time employees that's the the number that they're going to use to do the calculations two times two and a half times what the payroll would be okay one more question without new fighters that happened for this year they were not on the payroll last year so this is somebody that was hired as as of January 1 January 2 of 2020 yeah how do you factor in recent hires into this [Music] I don't want to guess at it let's put that over to the side so and I'll get back on that because the goal is is to keep the employees you have bring back employees that maybe you laid off I don't see anything that addresses new employees because we're going to look at historical data as it relates to what their payroll was so I want to make sure I get clarification on that and then I will get you an answer on that as well okay the question is how do I as a sole proprietor use the funds to pay my wages when all earnings go through my personal bank account actually they talked about that I was just on a conference call about that so if you're a Fifth Third customer you would make application on the our portal you know through your individual and then you put your business information showing that you are working as a DBA and sole proprietor and it would run through their personal account okay looks go ahead Finch a nation I'm sorry I thought I heard something if I have a partnership and my income flows from my k1 tax return his self-employment income is that the number I use this payroll yes that's the number they're going to use all right and do do they list themselves as an employee are they getting shower they're getting pay payroll I would guess that they would be I guess they would be the employee then in this scenario right there's a so yeah if they are an employee and they're getting a paycheck then yes if we have most of staff laid off now and will be laid off projected until sometime in May should we wait to originate a PPP loan until we bring folks back in terms of having greatest likelihood of forgiveness they anticipate they're gonna be laid up until May is that correct that's yeah if they the question is basically should I wait to apply so that it it gets me covered so closer to what I bring them Matt want to bring them back waiting to to apply to get these funds and bringing them back later in that particular situation and I don't want to miss advise but it does sound as though it would be advantageous to wait if they anticipate they're gonna bring everybody back in May we're in the beginning of April I don't know how long the applications the approval the funding process would be but you probably wait towards the end of people yeah towards the end of the month to do it I would I would strongly encourage whoever that ask that question just to start gathering all the information now and get it all ready so that once they know exactly when they're going to hire those individuals back that they can make application immediately because they'll have all the information together that they'll need to do that if if an employer applied for state assistance in the state loan program is that the same as applying for the federal assistance how did those work together how was that under the state disaster recovery act yeah there's the the recent loan program the state would own this is a separate type of program so this is specifically under the PPP is specifically for payroll purposes and the states is not okay what if and we see this a lot with businesses right now what if an employee decides to quarantine and voluntarily leaves for two to three weeks but we offer to keep them working how will that work with the loan amounts if they are were on the payroll for the last year when they're going to do their calculation then they would be included in that calculation alright so a question here what was the program you mentioned before the Semin a program yeah that's be a semi yes so what is that program that's just an SBA guarantee program so so if anybody has a loan within a program is just an SBA loan that doesn't guarantee to it it gives a more flexible terms longer amortizations up to 25 years it does have a government guarantee component to it if somebody's applied for that historically financial institution would look to utilize that to number one give a lot of more flexible amortization that program unlike these program did require a personal guarantee any and all available collateral that be taken on it a lot of times that program is utilized for projection based maybe a startup or if somebody had acquired business that had love goodwill in it so there was enough lateral support to loan but that's the program and that's what its intended use was and so if somebody has that type of long today they they will know that they have that if somebody is interested in that type of loan again consult your financial institution or you can contact us and we're more than happy to talk to you about a new Sony law questioner and I believe we've touched on it but if you recently placed your workers on a temporary layoff and they've already filed for unemployment the goal of this is to bring them back into the workplace right and and not have them sit on unemployment that's that's the goal of this right a threat so so yes the the question there the answer there is yes you are anticipated to bring them back correct one question that comes up is I for employees who earn more than $100,000 are their wages up to $100,000 included in the calculation or are all of their wages excluded no it's capped on $100,000 so if somebody makes a $125,000 a year they're gonna be capped at $100,000 okay this is a person whose company purchased a new company December 1st that came with employees can we not use those additional salaries to establish payroll totals so when did they part of this company December 1st December 1st well and again I don't know what type of information that they have for the prior period I would think that they would be able to include those in there but again that would be something that they would have to get all that financial information I'm assuming if they acquired that visitors they had access to that financial information prior to the acquisition so that they could put that in there but they'll also have to be a determination of the SBA as it relates to the eligibility on it but I would think they would be able to do that as long as they could validate what the payroll costs were for that previous business that they acquired our board members considered owners according to the application know now they actually ownership interest in the company okay and then how does this affect independent reps paid a hundred percent by Commission and so it does say that individuals are eligible to apply for this type of law looking at going back there's a question they have this company has bookkeepers on contracts that are contract employees they would count towards the payroll on this that's correct hey Eric I was just kind of leading the any independent contractors have to file themselves I think yeah who operates as an independent contractor is elevator but they but the independent contractor has to apply themselves the employer of that independent contractor cannot high rank yeah that's correct I'm sorry if I wasn't clear on that [Music] is a concern about bringing employees using this money to bring employees back if there's not work to keep them busy you can bring employees back and then I guess you know it's up to the employer to make a determination of what they want them to do here's someone who says they gave their employees a raise in January can I use the 2020 year-to-date average payroll expenses of the average from 2019 well what it says here is for 2019 and then what if you could we're getting a lot of questions about the timeline what what kind of timeline is Fifth Third Bank looking at again on this as far as when we're going to launch the program yes sometime next week I was just on a call prior to this and again because of all the changes and it's a very fluid situation somebody's tests specifically tell me what they were going to start the program and they were very reluctant to give a specific date because you know we told you what every day and we didn't meet that we don't want to do that so it would be sometime next week and is not the answer you want but that's that's where we're at at this point time so one of the questions is for employees
who are at home due to non-essential business stay at home order that the goal here is to bring them back into some kind of employment even though they're they're working from home oh absolutely I'm working from home so yeah I mean you know the the a royal protection program is is a way for a business owner to get funds to ensure that they can continue to keep those employees working wherever they might be you know if they're working from home you know this is a way to get funds and as long as those funds are used to keep those individuals employed they can document that then after the time period they can has for debt forgiveness huh all right we're coming bail bonds 3 o'clock so I'm going to pass this back over to Phil thank you Eric we really appreciate your willingness to kind of throw yourselves out to the Lions when the rules were put in place last night but thank you so much oh you're quite welcome again you know this is a very fluid situation and for those that are in the workplace and looking to you know maintain payrolls and keep people employed we're doing everything in our power to make this seamless and expeditious process as soon as we have the program up and running we will definitely update our website we will let bill have a communication because that will go out so that people can apply they can know what documentation they'll need what type of certifications that they'll need so that we can get money into the hands of the business owners as soon as possible well thank you thank you so much and I think it's a sign of the principles in the character that you and fit third have that you want to make sure you've got it all right before you open the floodgates so thanks again I'm I'm going to talk now about some of our upcoming webinars that are so important right now employment law particularly of unemployment but all things about co19 we have a webinar next Tuesday April 7th at 11:00 a.m. with two attorneys from Miller Johnson with great expertise in these areas Troy has been working with a representative the Small Business Association to come and provide further guidance next week when they think they're ready and then something that most of us haven't had time to do that you now may have time to do and that is take advantage of the programs that you have through your BBB accreditation I think particularly about our equals program which provides you leads for people that want to do business with you and the free customer review act and we have other things too so we're having a webinar next Thursday April 9th at 1 o'clock where we'll explain how you can maximize your value that you're getting for your BBB accreditation and we just want to thank you from the bottom of our hearts for being BBB accredited businesses we're going to try to be there for you every step of the way and we hope that we all make it through this and come out stronger on the other end and we hope you have a great weekend you
