Waiting on SBA PPP/EIDL – Make These 4 Calls, Today.

Dear Fellow Business Owner,

If you are speaking with your banker you may have learned that the banks have to disburse PPP loan within 10 days of approval and you have to use the funds for payroll (primarily) before 6/30/20. Depending on timing of reopening the economy and subsequent customer volume, you may be wondering about how to reinstate the payroll to get loans waived. If you are tracking news on your SBA Emergency Grant of $10K and EIDL Loan upto $2 million; seems like those numbers are changing to $1000 per employee grant and $15K of loan.

That been said, we cannot leave our future to government to decide. Let’s make the following four calls, today.

1. Call your Attorney and ask  if your critical agreements (lease, franchise, loans etc.) could be suspended/voided without triggering any defaults/damages or you could walk away by activating force majeure clause or any other such protections your attorney had embedded at the time of signing these agreements.
2. Call your Insurance Broker to discuss if Business Interruption coverage due to Pandemic was available but was not endorsed. Also discuss other possible gaps. If you can’t make a current claim, request adjustments to insurance premiums.
3. Call your Banker and ask for a six to nine month deferment of the monthly loan payments and suspension of covenants (if any). In fact, the rates are so low that the banks should refinance and roll the six to nine month deferred payments in. The SBA is extending loan guarantees up to 100% so ask the banks to remove your personal guarantees (if SBA allows) and adjust covenants.
4. Call your Accountant and discuss how the extended tax deadline (moved from April 15 to July 15), is being used to re-strategize your 2019 Tax Returns and Estimates for 2020 -2021. Inquire about scenarios with CARE Tax Credits, Disaster Area Deductions and Carryback of Losses while navigating  through PPP, EIDL, grants, bank loan deferments and suspension of covenants. Anticipate that banks and government processes will require Tax Returns and Financials before waiving any loans and approving credits. Do you feel confident in your accountant’s ability to satisfy bank, SBA, State and IRS requirements?

Once you make these four calls, you would know if you are in good hands or need to make the fifth (find the right professional) call!

We are in this together.