CARES Act Paycheck Protection Program????
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  1. #1
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    Default CARES Act Paycheck Protection Program????

    Does this mean I can borrow money to cover my payroll for the next 2 months and if I retain all employees for a year, I don't have to pay back anything???????.

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    Quote Originally Posted by alphonso View Post
    Does this mean I can borrow money to cover my payroll for the next 2 months and if I retain all employees for a year, I don't have to pay back anything???????.
    I almost posted the same thing....reading more into it, your business classification has to be food service or other really hit hard classifications basically.

    But you only have to affirm that the money will be for rent, utilities and/or payroll.

    But money is fungible so what's to keep someone who is doing ok to take the money, buy a piece of equipment, and have it forgiven...all while making payroll.

    In America, all loopholes will be exploited.

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    Maybe I will qualify. One of my major customers manufactures food(like) product for Taco Bell, Jack in the Box, Burger King.

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    I plan on applying before it is all gone. Not so sure how you can keep payroll going if you have a restaurant that cannot open. Sure, pay them to stay home. Govt money and all forgiven. Except the interest. Will see where that goes.

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    Did you buy a hotdog cart?

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    What I understand from reading some paperwork:


    Your loan amount is defined by your payroll [with some limitations]
    monthly payrollx2.5

    You can spend it on payroll, rent, business mortgage, utilities

    the forgiveness is based on whether you continue to employ people or not according to a formula

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    Quote Originally Posted by jamscal View Post
    I almost posted the same thing....reading more into it, your business classification has to be food service or other really hit hard classifications basically.

    But you only have to affirm that the money will be for rent, utilities and/or payroll.

    But money is fungible so what's to keep someone who is doing ok to take the money, buy a piece of equipment, and have it forgiven...all while making payroll.

    In America, all loopholes will be exploited.
    This isn't correct. All manufacturers are eligible if they're under 500 employees.

    We're a technology company working solely with small business manufacturers that are doing high mix, low volume work. We don't have any customers in food manufacturing. We've spent the last few days helping our customers determine if they qualify for the loan, and also walking them through how to apply. Most of them have already been approved.

    I'll post some quick bullet points below that should hopefully be helpful for you guys to take away, but also wanted to offer our service to anybody interested. Our team has become very familiar with the process, and we want to do our part to help the manufacturing community. If you would like some help applying for the loan, you can reach out to us at [email protected]. We'd be happy to speak to anybody domestic manufacturers that may be struggling to keep the lights on and the people employed. Again, this is not a situation we're trying to monetize - only trying to do what we think is right for the community at large.

    CARES Takeaways
    No SBA fees
    No credit availability checks (typically these are required to see if you have access to credit elsewhere, but have been waived in this bill)
    No personal guarantee
    Loan proceeds NOT FORGIVEN have a 10-year max term at no greater than 4%. However, it will likely be lower (3.25% - 3.75%)
    Payment on these loans are DEFERRED, and no interest accrual for six (6) months to one (1) year
    SOME EXPENSES will be forgiven
    Payroll costs include most fringe benefits, mortgage interest, rent and lease payments, utility (including internet and phone) ONLY IF the agreement was signed before 2/15
    Any employee who receives $100k or more in wages is disallowed
    You may be limited to what you can have forgiven if you reduce staff from what it was in the calculation period

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    Quote Originally Posted by gustafson View Post
    What I understand from reading some paperwork:


    Your loan amount is defined by your payroll [with some limitations]
    monthly payrollx2.5

    You can spend it on payroll, rent, business mortgage, utilities

    the forgiveness is based on whether you continue to employ people or not according to a formula
    Yup, and they decide how much you will get. And food service is not a requirement. You just send the SBA the info for a "self certifying loan". If the numbers you supply look good, you get some money. No time for them to check up on you. But you can bet when the term is up they will check. Some will fudge the numbers for "free" money. Not a bad idea if you have a strong balance sheet. And don't think of it as FREE money. But with a strong balance sheet it makes sense because the Gov has to pay them to stay home. Better to pay them to work because for sure they cannot find jobs. Have them work on shop infrastructure or stock pile the widgets that you make.

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    Quote Originally Posted by FulcrumPro View Post
    This isn't correct. All manufacturers are eligible if they're under 500 employees.

    We're a technology company working solely with small business manufacturers that are doing high mix, low volume work. We don't have any customers in food manufacturing. We've spent the last few days helping our customers determine if they qualify for the loan, and also walking them through how to apply. Most of them have already been approved.

    I'll post some quick bullet points below that should hopefully be helpful for you guys to take away, but also wanted to offer our service to anybody interested. Our team has become very familiar with the process, and we want to do our part to help the manufacturing community. If you would like some help applying for the loan, you can reach out to us at [email protected]. We'd be happy to speak to anybody domestic manufacturers that may be struggling to keep the lights on and the people employed. Again, this is not a situation we're trying to monetize - only trying to do what we think is right for the community at large.

    CARES Takeaways
    No SBA fees
    No credit availability checks (typically these are required to see if you have access to credit elsewhere, but have been waived in this bill)
    No personal guarantee
    Loan proceeds NOT FORGIVEN have a 10-year max term at no greater than 4%. However, it will likely be lower (3.25% - 3.75%)
    Payment on these loans are DEFERRED, and no interest accrual for six (6) months to one (1) year
    SOME EXPENSES will be forgiven
    Payroll costs include most fringe benefits, mortgage interest, rent and lease payments, utility (including internet and phone) ONLY IF the agreement was signed before 2/15
    Any employee who receives $100k or more in wages is disallowed
    You may be limited to what you can have forgiven if you reduce staff from what it was in the calculation period
    Great...spammers already
    Go away

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    It's not clear to me you can apply yet. The website gets me this far to a sample form:

    Paycheck Protection Program (PPP)

    https://www.sba.gov/sites/default/fi...lication_0.pdf

    Not sure how you actually apply. SBA loans are new to me, but I'm going to apply if I can.

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    Quote Originally Posted by FulcrumPro View Post
    We've spent the last few days helping our customers determine if they qualify for the loan, and also walking them through how to apply. Most of them have already been approved.
    How did you manage that? sba.gov link says:

    "Lenders may begin processing loan applications as soon as April 3, 2020."

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    Looks like I was wrong on the food service thing, sorry. The site I got it from was dated before the thing was passed, so it must have been speculation.
    ____
    My bank sent an unsolicited email to call them about it asap. It looks like a free for all...no pun intended.

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    Quote Originally Posted by digger doug View Post
    Great...spammers already
    Go away
    I dissagree.

    It is a current thread (did not search for and dig up old bones) and one which he feels that he has pertinent info on.

    Otherwise I would need to ban Orange Vise anytime he pipes in on a vise thread?

    Or ExKenna when pipes in on an insert thread?

    Or the fella from BobCad when he pipes in on a CAD thread?

    Or ... ???


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    Quote Originally Posted by CosmosK View Post
    ...Not sure how you actually apply. SBA loans are new to me, but I'm going to apply if I can.
    You will have to go through an SBA banker. My bank (Chase) sent me an email the other day, they are setting up an online application process.

    It sounds like the loan amounts are to be based on payroll.

    It's a small pool of money- like $10Bn? I think it's going to go fast. Probably service industries get priority?

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    Appreciate it Ox.

    Digger, my point was solely to clear up the misconception that you had to be involved in food production to receive aid, to provide some bullet points that go along with the aid, and to offer free assistance to any manufacturer that was negatively impacted by the current pandemic.

    If trying to help manufacturers run their business isn't the point of the Practical Machinist forum, then I'm in the wrong here. Either way, best of luck to everybody navigating through these tough times, stay safe.

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    Quote Originally Posted by FulcrumPro View Post
    ...If trying to help manufacturers run their business isn't the point of the Practical Machinist forum, then I'm in the wrong here. Either way, best of luck to everybody navigating through these tough times, stay safe.
    Can you tell us how sole proprietors with no employees are treated under this program?

    No payroll, not eligible?
    No payroll, still eligible for operating costs like rents and utilities?

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    Quote Originally Posted by jancollc View Post
    Can you tell us how sole proprietors with no employees are treated under this program?

    No payroll, not eligible?
    No payroll, still eligible for operating costs like rents and utilities?
    Maybe check with your state on this. I know in my state (Kentucky) unemployment insurance was opened up to people who are "self employed." My guess was that it was intended for people in services who were put out of jobs - barbers, etc, but perhaps your state has something similar in progress that you might be eligible for. I doubt it'll cover building rent, but better than nothing...?

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    A chum of mine told me last week that he laid everyone off and got on the dole himself as well.

    I told him that I'd dbl check that - as a pres of a C corp - historically the only time you can draw is if you actually close the business.
    But I doo understand that they loosened the requirements for this go.
    Just not sure - how loose?

    So he decided that he might better dbl check before cashing the first cheque.


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    The PPP application form is a two-page document, an editable PDF. You must support your figures with your payroll records. The loan amount is 2.5 X your monthly average payroll, which includes employer match, retirement match and benefits such as company-paid heathcare. It's forgivable if you retain the employees.

    Already turned ours in this morning to the bank (thru the drawer—the building entrance is of course closed tight). Got a phone call acknowledging receipt, and advising that if any other docs were needed they'd be back to us ASAP. If you are contemplating doing this, get on it. Don't wait until the funds are spoken for.

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    Quote Originally Posted by jancollc View Post
    Can you tell us how sole proprietors with no employees are treated under this program?

    No payroll, not eligible?
    No payroll, still eligible for operating costs like rents and utilities?
    The language in the instructions to lenders is for those with payroll costs, but payroll costs are not defined as you may think: as a sole proprietor, "wage, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee." If you showed any net earnings from self-employment or income, this would count.

    Qualification of the loan is based on that definition of payroll (monthly average multiplied by 2.5). The forgiveness of the loan (free money) is capped at 25% of the loan, or 50% of your average payroll. If your payroll is low, you may be capped by that number.

    Ex: Sole proprietor: $8,000 per month in net earnings from self employment or income, would quality for a $20,000 loan.

    After you get the money: Your rent (and other non-payroll costs) is $5,000 per month for a total of $10,000 over the 8-week eligibility period. You'd only be able to write off forgiveness for $4,000. You'd still owe $6,000 on the loan after the period is over. This loan is payable in 2 years, with the first 6 months of payments paid for by the government, so you'd still have a 25% "discount" if you will. The rest of it is at only a 0.5% interest rate.

    Jancollc, if you'd like to send me a PM to talk through your specific situation, you're more than welcome to do so.

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