Sign Ohio Banking RFP Myself

Industry sign banking ohio rfp myself

at this board level talking about it quite a bit and we deemed that we maybe could had the golf outing on July 27th but everything we keep on hearing is that we'd have to enforce social distancing so to be like one golfer per golf cart we'd have to limit the number of teams to no more or no players in no more than 72 or one for some per hole and so and it would be no networking it probably wouldn't be a dinner we couldn't congregate in groups more than 10 so for that purpose we referring to golf outing until the fall hopefully the rules will change a little bit by then and maybe we could have larger groups to assemble and maybe do some networking so our current tentative new date is September 14th so well remember that hopefully we'll have some good announcements that's moving forward and hope to see everyone there in the 14th and then Susan you want talk about any other administrative stuff with the team's platform sure so I'm Susan Ross wells I work with Bob at gjm and just wanted to you know once again welcome everybody we're excited to be using teams for this meeting today and just want to remind you we're going to mute everyone as Bob starts his presentation but you know no offense so but if you have any comments or questions please utilize the chat and Bob's gonna attend to those you know once he's finished with his presentation so and if you're not familiar with the chat you can if you hold your cursor you know over the team's screen you should see that little sort of conversation icon there so that little bubble and if you click on that you'll be able to to make any comments or pose a question so Bob I'll send it back over to you ok so you know I'm getting new at this so now I'm going to share the PowerPoint with you Bob you're muted Bob you need to unmute yourself my crap man so go to go to the bar hold your cursor above that bar that I was just talking about go to the microphone and click on it to unmute yourself yep sorry about that all right now you seen the PowerPoint yes sir okay good good good good good yeah so whatever I flipped over share screen something to learn from teams the main screen that I was looking at earlier disappeared it minimized itself so I didn't I couldn't find the mute there for a second but I got it now okay so there's my resume I think everyone knows me 35 years public counting work with construction clients and so on let's start writing to the the presentation so on March 27th president Trump signed a law the cares Act and it added two trillion dollars as a shot in the arm to an American economy and it was really trying to to really create liquidity in our economy so I mean Congress knew that we were heading into a major recession and in 2008 we had our last major recession they passed what they called the tarps Act and under that law they put trillions of dollars into the banking industry but that money didn't get into the banks until well six to six months to a year into the recession and by that point a lot of the bank's refused the money and said we didn't need it any longer so instead of using a bank system directly to him to provide the liquidity they came up with this new program called the PHS protection program and so we're going to talk a lot about that today but that was designed to use small businesses through their banks to provide liquidity to our economy and basically keep people employed so they weren't getting laid off and going to the unemployment office and then giving you some additional resources for small businesses to continue paying your rent on your building and your equipment and in mortgages you have on quipment or buildings and then utilities and because utilities are being really adversely affected right now so they were doing that so the first round shot in three hundred and forty-eight billion dollars into this program and the first application was accepted at April third and then by April 16th the money was fully allocated and so on April 24th Congress passed round two it's a corona bias relief bill and under this act they added another additional three hundred ten billion dollars into the PPP program and also in the first round there is some we're gonna be talking about these economic injury disaster loans and so also by April 16th under the first round all the money was used up for that program also the well would dry with that program so then under the second act they injected another 50 billion into these economic injury disaster loans and supplementing that with another ten billion in ikan economic injury disaster loan grants and we'll be talking about that shortly so the the big piece of they cares at they were here to talk about today is the Paycheck protection program it's a it's basically was designed to go through the SBA as a federal agency and you see SBA 7a lenders across the country so most of your banks were already in the SBA program and there's a lot of other financial institutions that were already pre-qualified to underwrite SBA loans so they decided to use that process many financial institutions accept these loans and start processing them there was horror stories of initially when the program was first started a lot of the smaller banks were actually taking manual applications and then going to their website within the bank and submitting them electronically and so actually there's we're getting done sooner and a lot of the larger banks were then setting up portals to have their customers go directly into the SBA through a portal at their website late let's say key Bank v there are a lot of big banks in town we're doing this and so they would eliminate the need for their people to process those loan applications but it took time to build off those portals and some of those portals were just finally being built out right before the money ran out so there was you know a lot of clients or customers that got shut out the first round had to wait for round two to get funding so there were round two came around there was 310 billion that opened up on April 27th and just about everyone that has applied now has been a has received their loans and they're as of May 16th there's still a hundred and forty five billion available to loan out so I got this off the SBA website this is an update on the program this is issued every week with current numbers and they've combined both of them into one spreadsheet here so this is both PPP round 1 and 2 so as of last Friday they have proved 513 billion dollars of loans there's 4.3 million loans and almost 5500 different financial institutions were involved in making those loans and then when you look at the size the lenders you know almost almost all of them were smaller institutions with less than 10 billion assets about 5,000 361 lenders there and some more information about lenders but then here is information by state and so as you can see Ohio is them towards the bottom of the middle row and combining both rounds we are now the seventh with almost eighteen point four billion dollars of loans being issued to customers in Ohio and then this is a loan size as you can see a majority of the loans are under the two million which we'll be talking about shortly you understand the importance of under two million but about less than 1% of the loans were under two million in number and that made up about 20 1.7 percent of the total dollar amounts so nearly 80 percent of the loans in dollar amounts are under the 2 million threshold the average loan size now combined is a hundred eighteen thousand so as you can see there's a lot of smaller loans and again this was going to allow all businesses with less than 500 employees there's a lot of small businesses that participate in the program and then here's a listing of lenders the top 15 lenders just to give you an idea as you can see there's a top 5 or over 10 billion and then they start dropping it off quickly after that so let's talk about the basics of the Paycheck protection program so the application allowed you to claim a loan of two point five two and a half months of your payroll cost maximum to ten million dollar loans if I don't guidance the loans have a two year maturity and a 1% rate of interest you're allowed to use those loans for payroll costs and that includes not just wages but group health insurance and retirement costs interests on mortgage and payments rents utilities and interest on other debt obligations all incurred before the cover period uncovered period began on February 15th 2020 there's been a lot of talk about that do I need to set up a separate bank account to hold these funds the question to that answer is no you are not required to segregate these funds in a separate bank account matter of fact a lot of the larger banks did not want to go through the process of opening all new bank accounts for these loans and so once the money was approved they simply deposit it in your main primary checking account as part of this program Congress allows a process for borrowers to get a potential forgiveness based upon expending the money quickly within eight weeks so again the logic behind this is is that we're trying to create liquidity in the US economy and so how do we do that by loaning the money to these small businesses throughout the country and then have them turn around and spend that money as quickly as possible and that's how they came up to eight-week period so again the push that money back out of those companies back into their employees paychecks by doing that the employees are comfortable that they've retained their jobs the employers are comfortable there to retain your workforce once you start paying people money again the withholdings go to the state and local government entities that stopped when they went to the unemployment office retirement benefits continued to be accrued various positive things come out of spending that money also they wanted you to make sure that you retain your facility and equipment that you need to operate so that's why they allow forgiveness for payment of rents on equipment and buildings and utilities because again they don't want you they want you to kick back into business as quickly as possible when we start going back to business and the pandemic pandemic hopefully starts to pass so they've they put a date here of June 30th again there's been a lot of discussion about extending that there's also been some discussion about spending an eight-week period but no true reaction yet on that the big thing that caused a lot of angst initially was the certification required so the loan application was very streamlined basically required two numbers your payroll and your number of FTEs and that you answer a bunch of questions then the most important one first of all is here less than five hundred employees and then second of all this current economic uncertainty question so on the loan application you had to make a good-faith certification that there was uncertainty within your company due to the pandemic creating a necessity of loan and so the actual certification now is on the application you signed was current economic uncertainty makes the loan request necessary to support the ongoing operations of the applicant and so initially what happened was when this program starting out the largest companies they have the largest accounting firms largest accounting staff legal and these are publicly traded companies apply for these loans and so there was a carve out for less than five hundred employees per location so and that was carved out for restaurants and hospitalities so a lot of the public traded restaurant chains and hotel chains grabbed this money apply for it and got approved and they could get up to ten million dollars now again some of these companies had 40,000 employees but they met the definition of under five hundred per location and so they got a maximum loan of ten million and then when this start became a public information those are public companies they I did notify you know the public that they did this there was a big pushback from the public and so the SBA is providing guidance to what they call the QA and so when they got this pushback they they did a question and answer it's number 31 that speaks to you know okay who really qualifies for this how do you perfect a certification and so they said you know you really got to consider your ability to access other sources of liquidity and it went on to say definitely in a Q&A it is unlikely that a public company with substantial market value and access the capital markets will be able to meet this required certification so this was definitely targeting public traded companies but it also was targeting other large institution also like the LA Lakers which I think are probably fully funded it's a billion dollar company you know probably has other access liquidity to support their operation so again they were another one and so they said hey if you pay it back initially you by May 7th no questions no file and then extend it at two main 14th and right around May 14th they made another ruling that was Q&A number 47 okay and that ruling was basically if you had less than two million dollars of a loan that's why that two million became and I spoke about earlier is important if your loans were under two million you automatically meet this certification you don't need to demonstrate to the SBA if you're over two million the SBA could come in and perform a review and ask you to demonstrate how you met this certification and also they can do a deeper dive into your forgiveness request and because they issue that I think on May 15th they didn't extend it to May 18 the day you could repay your loans no question asked if you're over that two million so what happens if you don't meet this requirement and SBA deems that you did not meet meet the requirement of the certification there remedy is that you must pay back the loan and get no forgiveness and that is it they've declared that there will be no criminal call criminal enforcement and long as you made a good-faith effort in your certification other questions we've seen is like I have a line of credit you know it does that create some problems under certification again it was very clear in the carers act that they said that you did not have to consider your other sources of financing in being eligible for the Paycheck protection program so they clearly carved that out even though other SBA programs require that and so a lot of clients wouldn't really think I'm a lot of credit and there's so much uncertainty going on in our economy right now and I don't know a single client it has not been a company I know if that's not been affected affected by it and we were hearing heard some horror stories I was on a client call yesterday where their sales are down 95% now they're in the auto industry i supply your auto industry but still 95 percent and we've heard other clients down 75 percent and two things when you have a line of credit lines the credits are usually not available to fund losing operations or payroll lines that credit are there to support growing businesses and provide liquidity based upon the receivables and good inventory and usually most of our clients have seen a decline in sales temporarily and their corresponding receivables so while they might have a line of credit it might not be they might not be able to access it so because it all of the collateral base and likewise with inventory I mean a lot of contractors don't carry inventory so this is an impact on that much but again the inventory so we're recommending everyone dock you met their uncertainty when they sign your application everyone even if you're under two million you should just make a quick memo to the file that's uncertainty everyone everyone I've talked to is facing some uncertainty and some of the documentation you can support that is I know a lot of customers or companies have done forecast that shows what happens when their sales drop and what happens their profitability and Leominster cash depletion you might be sitting on some cash right now but that cash maybe will get quickly depleted if this.c boats aren't coming in you know reduction or slowdown a collection of account receivables you know we're hearing a lot from construction companies while they h ve their burning off their backlog the bid opportunities are really slowing down temporarily and we're hear from other customers contractors that they have current projects who are maybe the banks now is slowing down the ability to draw the construction loans to fund those projects so again that's slowing down you know supply chain we're hearing from a lot of contractors I'm having all kinds of issues with getting the subcontractors I'm there at the right time because certain subcontractors aren't going bouncing back as quickly as other ones and so timing all that and getting them there so you can get the project moving forward you know maybe obsolescence or perishable inventory losses and the big one I keep on hearing too about construction is work stoppage or cancellation so again we have a lot of customers that you know let's say you're a factory and all of a sudden someone comes down with a Cove in 19 and you must shut down that factory and therefore no one's allowed into it and that could be shut down for a couple weeks or local governments I know it's a little shut down a lot of their construction jobs for a month and said you cannot no longer come out to the construction site for at least a month so again there's so so much a certainty just document that so forgiveness period so that's the most important thing that's now people are starting to talk about so the lobe free and so it begins in the eight-week period after the loan originated so let's say you're your loan was funded on April 20th then basically on April 20th the eight-week period starts and you're allowed to get forgiveness and two categories of costs which will go through each one one being payroll cost another one being non payroll cost okay on May 15th last Friday SBA issued their forgiveness application with supporting instructions and also with some supporting schedules now a couple questions I'm beginning recently on that application there's a link to their website right there in the PowerPoint but some of the questions I've been getting on this application or services worksheet that's attached that helps you figure out some of the answers that is not part of the formal application you submit you do not have to use that worksheet that's just a guide to help you guide you through it some people find that worksheet to be a little cumbersome so you do not have to use that attachment you just have to fill out the application so what item that's been constantly been debated and it was in the cares Act it is repeated in the instructions for the forgiveness application it's a concept called paid and incurred basically they want to make sure not only were these expenses incurred prior to or during your eight-week forgiveness period but that they were also paid either during an eight week period or paid shortly thereafter so alive you know we're having a lot of questions about okay I have a normal 401 K that I do it to any year crew part of it now well first of all you gotta look at your 401k plan document to see if here I'm allowed to do a partial payment but it's gonna have to be paid in during a week period you can't wait until after - forgiveness period to pay it in also it's pretty clear from this application that any prepayment of expenses will not be allowed so for example you can now pay by let's say June 15th your July health insurance bill but you do get to pick up the prior two months worth of health insurance so they shouldn't be harmed just make sure you're picking up the right ones so what our payroll cost so payroll cost is the same definition and the same calculation you use to draw down your original PPP loan application it has not changed so it starts with salary and wages not to exceed 100,000 per employee and here if you're a single member LLC or Kevin LLC and you're getting draws instead it's also unlimited to a hundred thousand per member so for the eight week period the maximum any person can be claimed for wages is fifteen thousand 385 that's the maximum then on top of that you get to add group health insurance and this includes Union health and welfare benefit payments or your self-insured those payments you get to include retirement benefit cost and again including the Union retirement benefit cost and then there's a small carve out for state local taxes based upon employees compensation so in Ohio we have two of these state unemployment and workers comp so a standard appointment it's relatively small for most of the companies we know and again it might have already been paid I don't know if there's gonna be much that you can pay during this period it's eight week period but you can that should qualify and likewise with workers comp workers comp has deferred payments for the next three months and they're all they're gonna give everyone a rebate and you will never have to pay those payments from the rebate so again I don't know if there's gonna be a lot of workers comp you can claim there is something in the application that's new it's new guidance to help you maybe pick the eight weeks of payroll in these related costs to use and they have what they call the alternate payroll covered period so if you choose that which I will be going over shortly you would have to follow that same procedure for all the costs on this page so what is the alternate payroll covered period it's designed to align with the borrower's payroll schedule so you get to if you would like to like to use the first payroll for the first day of the company's first pay period after the PPP loan disbursement date so it doesn't have to be exactly today you got the loan it could be their first payroll after that so in example in the application they give an example the loan was funded on April 20th however their first payroll doesn't begin to the 26 so this company can choose to start their eight-week period on April 26 which would change the ending date to June 20th now again if they had not done this the period would have ended a week earlier so April 20 I think it would ended on June 13th instead of the 20th so again so this makes it easy again it's pretty clear that there's gonna be eight weeks of payroll you know the other question we keep on hearing is you know can I increase someone's payroll during this period and there is no prohibition about increasing payroll there is a subtraction and we're coming we're going to talk about later on about reduction in payroll but there is no prohibition against increasing payroll and again there's a lot of companies that we talk to in all industries talking about paying hazard pay which is actually strongly recommended from the standpoint that you know during this period your employees maybe are exposed to higher risk and so you can pay them hazard pay but you can also pay them a bonus it's just the maximum that can count for any one employee is that fifteen thousand three eighty five so here's an example on how you calculate the payroll component of the forgiveness so there's the employer payroll cost for the employees at fifteen three eighty five per employee of four and thirty five thousand ten their growth your health insurance for two months of fifty retirement but if a cost these are matching a twenty five thousand and a small amount of state of local taxes of fifteen so in this example there's five hundred twenty-five thousand allowed now what's also important about this number is that's gonna limit the non payroll and so the maximum non payroll costs cannot exceed more than 25% of the total forgiveness so this number drives the maximum amount of non payroll cost so again the non payroll cost cannot exceed twenty five percent the total amount forgiven so when you do the calculation is gonna be the lesser amount of your actual cost in these three areas or twenty five percent of the total amount available to be forgiven and so the non payroll costs fall into three buckets one being rent one being utilities and one that they titled mortgage interest and so what is rent ret means any payment for a rent or lease that was obligated under an agreement that existed prior to February 15 2020 it's pretty clear from this application that it is rent or lease on real estate or personal property so this would also include truck Lisa's scissor lifts anything you're leasing I add one clump company I was talking to where they're leasing your uniforms under a rental agreement that should qualify so anything should qualify you know for as long as it's a personal property real estate and it's under a rental arrangement also the construction industry there's times when you might rent equipment for a job site you know that rental agreement was executed prior to fit boy 15 and you paid costs under that agreement during this eight-week period that should also qualify for forgiveness the next category sheet illa T's and so you know this this industry is getting slammed by the pandemic the draw on electrical utilities is drastically down I mean all these big factories I shut down are paying no utility bills the gas is getting slammed you know water is being used a lot less and so all these industries are really struggling and so they matter this in that if again you got a document that you've already have been paying these bills prior to February 15th so it can't be for a new location or something like that has to be existing utilities that you have been paying prior to February 15th but your electricity bills for two months your gas bill for two months your water bill for two months your telephone bill and this would also include cell phones a lot of organizations don't have landlines anymore never like Pines strictly on cell phones so that would qualify internet access will qualify and the last gray area out there in this list is transportation and that was put in by Congress directly and again without a lot of guidance and so the only guidance we've seen so far is the SBA has provided some guidance to small borrowers these are Schedule C borrowers under the PPP program and they talk about use of utilities and in there they say yeah transportation cost and they say for example fuel you use in your vehicles would qualify so it's pretty apparent from that SBA for small businesses that it qualifies fuel counts so again I think you could take a position for all I mean there's already positioning for small organizations and again I mean well usually no gas prices it's been dropping drastically I can't believe the other day I bought a take a gas 17 gallons for less than four bucks I paid 19 cents a gallon it was a dollar ninety-nine Kroger's and a dollar off because that's all we're doing is shopping at Kroger's now and so um it was unbelievable yeah you know that industry is really getting damaged and the last area is interest or mortgage obligations on the borrower so again these have to be a liability of the same borrower of the PPP loan and again it's defined as where you have a mortgage on real estate or personal property and again an application it says both of these so this is not just loans on real estate but this is loans on equipment would qualify interest on that the only thing is that loan had to exist prior to February 15th so any new loans after that will not qualify for this portion of the forgiveness so here's an example in this company they have 85,000 a qualifying rent one hundred one thousand and qualifying utilities and six thousand in interest so their total available for forgiveness 192 however because their payroll the maximum they can get is a hundred and seventy five thousand so they would only get 175 of the 192 forgiven so after you come up the cost eligible for forgiveness the next step is that you have to complete two tests to see if any of that forgiveness will be reduced and so that forgiveness the cost forgiven can be reduced if two things happen your FTEs don't meet a certain definition full-time equivalents or if you reduce people's salary by more than 25% I don't know of anyone I know of a company that has been able to retain the employees had given to come back to work in a lower salary unfortunately unemployment benefits out there are far better than the salary you might even currently offer him let alone with a 25% reduction so again I don't see this impacting a lot of clients but it still has to be remembered that that's a potential it's your compensation it's less than 25% of what they're getting prior to the pandemic okay we'll go through examples of each one of these so the FTEs there are two look-back dates you get to choose a lower of the two so you first calculates your monthly average FTEs from February 15th through June 30th of 2019 this is a year before the pandemic or your average between January 1 and February 29th of 2020 this is right before the pandemic started and you get to use the smaller of the two FTEs will be calculated based upon the 40 hours so this is something that we thought could have been 30 hours but in this final guidance it's 40 hours and the reason we had originally thought it was 30 hours that in other portions of the cares Act they do reference 30 hours however for this ESPE has ruled Ed's you're going to do this based upon a 40-hour FTE calculation again if you're using an alternate payroll cover period you must use that period to calculate your FTEs and not to eight weeks after you got the loan the thing is a no person can be greater than one FTE so if you have people that calculate out more than one you cap on that one and then for those that are less than one FTE you have two choices you can either round them to the nearest point one or you can elect to consider everyone under one and just a half of n of T so again what we're recommending is you calculate your both ways and see which works out to your benefit so here's an example so in this one the company's FTEs during the eight weeks with 32 a year ago they're at 41 right before the pandemic they were at 38 so we take the lesser of those two is 38 so they went down six FTEs so their loans can be no forgiveness amounts can be reduced by 15.8% now there are two safe harbors for this and the one is where you get to consider your reductions if your reductions occurred between February 15th and April 26 2020 is this will be disregarded if you rehire equal FTEs by June 30th so again if you simply do this that's a safe harbor you do not have to do anything for FTE reductions so again we're encouraging everyone to look at this one hard the second one is an exception so let's say you call up your employee and say come on back and they say nah I like my unemployment it's better and Congress and the president trying to fix that right now but unfortunately they could do that so if you make a written offer to rehire them it was rejected by the employee or any employees who were during the covered period were fired for cause they resigned or voluntary request and receive a reduction of hours she do not have to count them as a reduction you get to treat them as though they were still there so again that can improve your ability to meet this FTE test the other one is the compensation reduction so again you have to look at what you're paying people either on a salary from January 21st 2020 through March 31st or based upon their hourly rate and if you reduce your salary or their hourly rate by more than 25% there is also a reduction that could happen to your forgiveness again as long as you correct this reduction in salary by June 30th it this is deemed nut you don't have to go through this calculation so let's say you gave someone a salary reduction and by June 30th you brought them back to their regular salary that you don't have to consider this so it's allowed to be cured so here's the calculation altogether selling this company they got alone a seven hundred thousand as we've already went through they had payroll cost of five twenty five and nine payroll 175 so they're entitled to get the full loan forgiven however they had a six FTE reduction so one hundred and ten thousand of the forgiveness was disallowed plus they had a little compensation reduction a six thousand two fifty so the maximum of forgiveness they're going to get is five hundred eighty three leaving one hundred and sixteen thousand as a loan to be repaid over two years at one percent although I'm ure know is that you know there's these SBA economic development disaster loans which can we talk about shortly again if you got those during those periods they're not you're not eligible for forgiveness additional guidance will continue to come out again SBA has the final say on forgiveness for all loans IRS position IRS recently ruled on April 30th so in the cares Act Congress said we wanted to give to benefits we want to give forgiveness and we didn't want to make this forgiveness taxable the IRS ruled on April 30th that they agree with Congress that the income is not taxable however expenses paid by using these funds are not tax deductible so they basically took to tax deduction away you know it'll be a lot of pushback by this everyone's pushing back hard on this Congress has already said that if the IRS doesn't reverse us they might correct this in a future law and make it tax-deductible there is this employee retention credit gives you again you have to demonstrate for this one that you've been economically harmed and that is defined by reduction of your revenue by more than 50 percent it gives you up to ten thousand dollars of credits against your FICA tax it's a refundable credit there are one set of rules for under 100 employees everyone qualifies over a hundred employees they had to you have to tie into whether or not they left because of the pandemic again so again a lot of clients aren't using this program because they're using the PPP program you know who qualifies anyone that was partially or fully suspended to their order government order to the pandemic experienced more than a 50% reduction in gross receipts it's available to exempt organizations it's not available to certain government employees if you're getting a PPP loan you could only use these credits up to the end of your forgiveness period so you'd only get about 8 weeks of using this credit and you can't go beyond that forgiveness period again here's how you calculate your reduction you compare your gross receipts the first quarter either last year as you first quarter this year it's more than 50% you get this credit and it continues until your gross receipts exceed 80% as compared to last year at the same time and mechanically the first time you claim these credits is on your second quarter 941 the credit came into existence on march 13th so there are about what March 13th through March 31st in the first quarter which you claim on your second quarter 941 it's a refundable credit and you use IRS form 7200 to claim this credit a lot of businesses that are claiming his credit are currently you their payroll service provider to provide this credit also as part of this credit there's a payroll tax delay so if you qualify for the credit you also get to delay paint any additional FICA tax you have for the rest of the year so you have to pay no FICA payments this year and those are repaid over the next two years half in 2021 and half in 2022 again if you use the PPP program you can only use this delay up to the forget entity of forgiveness period which is your eight-week period so this one another program we want to talk about because you can use this also if you get a PPP program owned is the economic injury disaster loan and this has been around for years again this is normally when there's a natural disaster the last time this was used significantly was in New Orleans when the the the hurricane destroyed a ton of businesses and so they went down there and they provided a lot of businesses economic disaster loans all 50 states have a declared economic disaster area due to the kovat 19 pandemic if you qualify for this you also get a 10,000 hour grant however this grant will reduce the amount of loan forgiveness if you're also using the PPP program you get so you lose 10,000 of your forgiveness under PPP you can't apply for both however the danger here is that they both could fund the same cost so let's say you got this economic injury disaster loan at the same time you got the PPP loan and most of your cost is Labor and these other cost that you're asking for forgiveness they're going to take the position SPD's sba could take the position that the economic injury disaster loan pay those costs first not to PPP loan which could minimize the amount of forgiveness you get under the PPP program so we're recommending for most companies you know if you're doing a PPP gets you're eight weeks and then apply for this economic disaster loan there's some like I said earlier there's a significant amount of money put back into this program under the second act okay so again it's designed for small businesses you must demonstrate that you've been economically harmed to the pandemic this is alone you must apply with the SBA for this loan you go through normal SBA loan underwriting x' it follows all the normal SBA rules there's no exception for less than 500 employees you must meet the normal SBA guidance for a small employer so it's just a basic same SBA loan if you do qualify what's nice about it is the repayment term is thirty years and the interest rate will not exceed four percent and that's how you apply for it there's a link to the so here's a decision tree that we've been walking through with most most of our customers you know first decide if you know a paycheck protection program or economic injury disaster loan and again so you know under the Paycheck protection you get up to ten million two years to repay four months not forgiving at 1% and he applies to your bank okay and then then you can also later on do the economic injury disaster loan after that apply for another two million give the 30 years terms with a few companies get approved for this the interest rate Durbin quota is 3.75 and you apply directly the SBA now if you're doing the employee retention credit you could do that easily what's economic injury disaster loan but does that work well with the paycheck protection program you only get that for the eight weeks and then the final slide I have here is just on other state programs I want to leave a few minutes here for Q&A so again there is the bureau workers comp you know they're deferring their payments for March April May and they've also announced and I think everyone's been notified of a 1.6 billion dollar giving him back to the employers and again this is a hundred percent of all premiums they collected in 2018 and they're going to use this part of this refund to fund that March April May deferment there is another program now live people maybe not familiar with called shared-work ohio it's a voluntary layoff aversion program through the state of Ohio unemployment office again this works to allow you to retain your employees during a time where you know you have a reduced business activity so what you do is you negotiate with the state unemployment office that you're going to reduce everyone's hours let's say you could do up to 50% let's say you introduce everyone's hours by 40% and then the the unemployment office will make up that 40% with unemployment benefits and these are not counted against you as unemployment benefits paid so it's a neat program there's the link to their website so um the key word if you're looking for CPE is kovetz CoV ID it would be the keyword so do we have any questions Bob we did have some good questions come in in the chat do you want me to just start reading off a couple - yeah yeah sure okay this is Susan all right I'll start with Mercedes she says page nine of 11 from the SBA PPP loan forgiveness application defines how to split employees between tables one and two and Table one says that one should include quote employees that were not employed at any point in 2019 she wants to know what if these new employees in 2020 earned more than $100,000 would you add them to Table two or to Table one I'd have to look at that my believe you still put them based upon when they were employed so I think I'm trying to get the application in front of me real quick but I think you would still put them I thought I was doing good I'll have to get back to Mercedes on that well I believe you put it in the right section all righty okay Andrea had this question she said in regard to the paid and incurred portion the majority of utilities aren't gonna line up with the two month period coverage should they just take the closest bills to that covered period and secondly can you count reimbursement for employee-owned cell phones on the telephone portion of that okay so let's answer the first question so the first question is yes you just get two months you don't have to align with the eight weeks so it's not like a more of an accounting concept we're trying to get just eight weeks exactly in there so as long as it lines up you'll be you get I mean as long as you get too much you get two months of utility bills okay and so I think you could you know if your utilities are going slightly up you might want to select just like the later two utility bills that gives you a higher amount forgiveness um the employee reimbursement for employee cell phones I think that that could be a issue because it doesn't meet the definition of an agreement neck necessarily I was in place prior to February 15th because you don't know when the employees entered into their cell phone service and again it's not in the name of the company okay so the name of the employee so I think that one could be more troublesome all right okay Terry had this question does garbage qualify as a utility I don't see down the list I don't know that's a tough one I don't see it on the list I don't see it being gas transportation telephone internet those are specifically defined in the law and once listed there and nothing else so I think that'd be a push all right all right here's another question from Mercedes their eight week period of the PPP loan ends June 7th do they need to wait until June 30th to submit the loan forgiveness application to the bank or can they submit it June 8th 20:20 they have read that the banks have 60 days to get back to borrowers with the forgiveness decision would you agree with that yeah I agree with that that's true now the only reason you might want to wait is if you're trying to use when those safe harbors to eliminate any reduction created by an FTE or salary because you have to June 30th to cure that so if you submit by June 8th you've already said it you're not going to have a deduct for the FTEs or the salary reduction okay all right Beth Bella I wanted to know can monthly payments on company vehicles be included in non payroll costs under transportation I mean so if it's a rental yes if the company is entered into the rental arrangement yes that would qualify if there's a loan than the interest on that loan as long as it's in the company's name all right Tim wants to know do attribution rules apply for listing owners salaries and wages and then he notes schedule a line 9 now there there is attribution role so that's a tax concept and so I don't know how that layers into an SBA forgiveness because again we're following SBA guidance here not IRS guidance so I don't know the exact answer to that and what what line was he referring to I'm trying I found the application here schedule a line 9 he said schedule a yeah I'll have to I do not know exactly how they would impact their okay and here's a quick comment that Gabriela had saying maybe it would be better to pay a bonus to the employee than it would to cover the phone cost you know rather than doing that reimbursement maybe that's another way to handle that yeah yeah it could be yep very well could do it it's good idea Bob that's all I'm seeing in the chat area I don't know if anybody else has any other questions and they want to unmute themselves at this point feel free Bob you've left them speechless excellent presentation thank you so much you're welcome and I'll follow up on let me look into your question Mercedes I'll get back to you thank you bye yeah is that it I guess we're good to go everyone thank you for joining it I think you know we have I don't know about 3035 people on this so thank you everyone for joining in thanks Bob welcome take care everyone stay healthy if anyone has any questions just reach out