I've been researching the CARES Act. The government forced you to close or limit your business. This is compensation for your sacrifice. It is a "loan" that converts into a grant (you don't have to pay it back if you follow the rules). It is called the "Paycheck Protection Program". I feel like there is going to be a race to apply for these loans before the funds run out, and I want you all to be first in line.
How much can I receive?
How can I get my loan forgiven?
In the 8 weeks following your loan signing date, all expenses related to the following can be forgiven:
So, in our example, if the 8 weeks after your loan signing date, you spend $16,250 on the above expenses, 100% of the loan will be forgiven. Do the math on this. If you don't spend the full amount in the 8 weeks, the remainder must be paid back under the terms of the loan.
NOTE: If you cut back on the payroll, that limits the amount the loan can be forgiven. They really want you to keep paying your coaches. If you rehire employees that were previously laid off after Feb 15th, or restore any decreases in wage or salary that were made at the after Feb 15th, you will not be penalized for having a reduction in employees or wages, as long as you do this by June 30, 2020. If you want to see the math on this, check out the article by Rigequipment linked below.
When / how do we apply?
It's run by the small business administration but loans are issued by ordinary banks that are participating in the program. Loan applications are not available yet, but could be ready by April 4th. US Bank does have an inquiry form, where they will contact you when they are ready.
What documentation do we need to apply?
The SBA will ask you to provide documentation on your business’s payroll, mortgage, rent, and utility payments over the previous 12-month period. They will calculate the monthly average cost of those expenses. Start pulling this together NOW to be ready.
What documentation do I need to have my loan forgiven?
When submitting your application for loan forgiveness, you must provide the following documentation (no exceptions):
The lender must make a decision within 60 days of your forgiveness application submission.
What should I be doing now?
I'm going to be continuing to research this and send out more information once the application are available.
I'm thinking of pulling together a Q&A with Clayton from Rigquipment Finance. I've gotten to know him over the years at various events (like the CrossFit games) and he seems like he would be a good resource for questions. Let me know if this interests you.
Additional Reading (how I pulled together this information):