Resources for Opening Safely

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(Published 5/21/20)

As part of our commitment to collate and share COVID-19 response and recovery information , we have compiled resource list to help you safely and appropriately open your physical locations.

General Guidance

Worker Safety and Accommodations

Unemployment Insurance

Families First Coronavirus Response Act (FFRCA)

Cleaning and Disinfecting

Social Distancing

Screening / Monitoring Employee Health

Business Travel Limitations

Protective Equipment

For more COVID-19 related assistance, please contact us.

 

PPP Loan Forgiveness Application and Guidance

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(Published 5/18/20)

The Small Business Administration published the Loan Forgiveness Application and instructions for Payroll Protection Program (PPP) loans. Like the original PPP loan and program information, the guidance provided in the instructions is not fully defined or clear.

Here is some guidance collated from multiple sources including Forbes, AICPA, and several accounting firms.

Application

The application has four components:

  1. PPP Loan Forgiveness Calculation Form;
  2. PPP Schedule A;
  3. PPP Schedule A Worksheet;
  4. (Optional) PPP Borrower Demographic Information Form.

Borrowers are required to submit items (1) and (2) to their lender, a long with a list of supporting documents. You lender may require additional supporting documentation.

You must attest to certain certifications on the forgiveness application.  Note that while some are similar to the PPP loan applications, there are new, specific certifications. Read and understand these certifications before your Authorized Representative signs the application.

The application requires that borrowers who, along with its affiliates, received aggregate PPP funds over $2 million, check a box alerting the SBA to the size of the aggregate loan. If this may apply to you, seek legal guidance with respect to your loans and the affiliation rules.

Forgivable Costs

The Covered Period for forgiveness is the eight-week (56 day) period beginning with receipt of funds.

The SBA’s guidance provides for four broad categories of costs that are eligible for forgiveness, as covered below. With some exceptions, these costs are forgivable as incurred, or paid, during this period provided that at least 75% of incurred costs are attributable to payroll costs. Costs must incurred or paid during your Covered Period.

1. Payroll costs

The SBA guidance allows you to request forgiveness for payroll costs “incurred” or “paid” during your Covered Period, or an Alternate Payroll Covered Period aligned with the start of the first payroll period after receipt of PPP funds.  Incurred costs are recognized on the day they are earned; paid costs are recognized on the day paychecks are distributed or the ACH transaction is made. If your pay periods do not line up with your Covered Period, you may included incurred payroll costs not yet paid if they are paid on the next pay date.

Payroll costs include:

    • Cash Compensation, such as:
      • Gross salary / gross wages (Up to $15,385 — the equivalent of $100,000 per year — per employee)
      • Gross tips
      • Gross commissions
      • Paid leave (excepting leave covered by the FFCRA)
      • Allowances for dismissal or separation
    • Non Cash Compensation, per SBA guidance, includes the total amounts of:
      • Employer contributions for employee health insurance, excluding pre- or post tax employee contributions
      • Employer contributions to employee retirement plans, excluding pre- or post tax employee contributions
      • State and local taxes assessed on employee compensation, excluding taxes withheld from employee earnings

Payroll costs include compensation to owners at the lower of the $15,385 or the 8-week equivalent of owners’ compensation during 2019.

2. Business Mortgage Interest

The SBA guidance allows for forgiveness of business mortgage interest payments during the Covered Period for any mortgage obligation in place before February 15, 2020.

3. Business Rent or Lease

The SBA guidance allows for forgiveness of business rent or lease payments on real or personal property during the Covered Period for any lease agreements in place before February 15, 2020.

4. Business Utility Payments

SBA guidance allows forgiveness of business utility payments for services in place before February 15, 2020, including:

    • Electricity
    • Gas
    • Heating Oil
    • Water
    • Telephone
    • Internet Access
    • Transportation

Limitations

In addition to payroll limitations and the required payroll cost percentages, the CARES Act limits forgiveness if you reduce the average number of full-time equivalents (FTEs) during your Covered Period as compared with your past reference period (per your application).  The SBA guidance provides for an exception if a new FTE Reduction Safe Harbor applies.

Calculating FTEs

Per the SBA, you can calculate your FTEs in one of two ways:

    1. Enter the average number of hours paid per week for each employee during the Covered Period or the Alternative Payroll Covered Period, divide by 40, and round the total to the nearest tenth.  The maximum for each employee, however, is capped at 1.0.
    2. Assign a 1.0 for employees who work 40 hours or more per week; 0.5 for employees who work less than 40 hours.
FTE Reduction Exceptions

The SBA allows for exceptions and does not penalize your for FTE reductions due to one of the following conditions:

    1.  Reduction related to any positions for which you made a good-faith, written offer to rehire an employee during your Covered Period or Alternate Payroll Covered Period that was rejected by the employee.
    2. Reductions during your Covered Period or Alternate Payroll Covered Period for employees who (a) were fired for cause, (b) voluntarily resigned, or (c) voluntarily requested and received a reduction in hours.
FTE Reduction Safe Harbor

The SBA also recognizes a safe harbor that may keep you from losing loan forgiveness based on a reduction in your FTE level.  You are exempt under Safe Harbor if (1) you reduced your FTE levels in the period beginning February 15, 2020, and ending April 26, 2020; AND (2) no later than June 30, 2020, you restored your FTE level to that in place for the pay period including February 15, 2020.

Salary / Hourly Wage Reductions

The CARES Act reduces your loan forgiveness amount if you reduced certain employee salary and wages by more than 25% during your Covered Period or Alternate Payroll Covered Period when compares with the period from January 1, 2020 to March 31, 2020.

Additional Guidance

Prepayments

  • You may not include prepayment of costs not yet incurred in your forgiveness calculations.

EIDL Advances

  • Any Economic Injury Disaster Loan (EIDL) advances, typically $1,000 per employee up to a maximum of $10,000, will be a direct reduction from your final PPP loan forgiveness.

Loan Interest

  • While the CARES Act includes as an allowable use of the loan to be ““interest on any other debt obligations that were incurred before the covered period,” the SBA guidance does not include this on the forgiveness application.
  • While you may use PPP funds for this purpose, you should not include these costs on your forgiveness application without specific professional guidance.

Health Insurance

  • The definition of “health insurance” is not clear.
  • Obtain professional guidance with respect to including or excluding dental, vision, and other insurance expenses from the forgivable cost calculation.

As you plan your COVID-19 response and recovery, our Recovery Road Map Assessment can help you plan and execute your next steps. Contact us for more information.

 

Where to Look for IT Savings

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Almost all of our businesses are feeling the impact of COVID-19.  Revenues and cash flows are down and some costs are rising. We are all looking to cut expenses. Information technology and services can be a good place to find savings.

Most businesses can find savings in their IT services. Here are some places to look.

Unused Accounts

It is a common practice to hold onto the accounts for past employees or projects with the expectation that we may want or need to access the information at some point in the future. Often, these accounts incur costs as they remain billable within your systems. Here are some methods that you can use to clean up old accounts in Microsoft 365 and G Suite without losing data:

  • Transfer ownership of files and other data to other employees before removing an account.
  • Transfer ownership of files and other information to a designated archive account that will hold historical information for multiple past employees
  • Use a backup service to snapshot the account(s) and verify you can restore the data. Most cloud backup services let you restore to an alternate user and the licenses are significantly less than the Microsoft 365 or G Suite account.
  • Export data from past employee accounts into searchable format as an archive
Redundant Services

We see businesses sign up for new services, or keep existing services, even when they already have similar capabilities.  A lack of awareness and training can lead to redundant IT services. In most cases, even with feature differences taken into consideration, these redundant services are not needed — or are only needed by a few specific people.

If you are running Microsoft 365, you can use …

  • Teams for
    • Video conferencing instead of paying for Zoom, Webex, or GoToMeeting
    • Audio conferencing instead of paying for a third party service
    • social communication and teamwork, instead of paying for Slack
  • Teams Live to stream/broadcast events to large private groups or the public
  • OneDrive, SharePoint, and/or Teams for sharing files with others, instead of paying for DropBox
  • SharePoint for secure internal and secure external portals
  • Planner for project and task management instead of Trello and other third party applications
  • Bookings for appointment setting instead of paid services like ScheduleOnce and Calendly
  • Shared Inboxes and Groups for simple service desk / call center functions

If you are running G Suite, you can use …

  • Google Meet for video conferencing instead of paying for Zoom, Webex, or GoToMeeting
  • Google Meet audio conferencing instead of paying for a third party service
  • Chat for social communication and teamwork, instead of paying for Slack
  • YouTube Studio to stream/broadcast events to large private groups or the public
  • My Drive and Shared Drives for sharing files with others, instead of paying for DropBox
  • Sites for secure internal and secure external portals
  • Shared Inboxes and Groups for simple service desk / call center functions
Shadow IT

Chances are, if you scan your environment, your company charges, and expense reports, you will find employees using one-off or personal IT services that you have not approved or authorized.  In addition to costing you money, these services remove data from your systems and expose you to the risks of data loss and liability. In many cases, employees turn to “Shadow IT” services because they perceive these services as more convenient or easier to use than company resources.  Here are ways to reign in Shadow IT:

  • Actively look for employees using Shadow IT services.  Scan your environment, credit card fees, and expense reports. You can also use tools like Blissfully to find and quantify these services.
  • Find out why employees are using the services.  Is it a missing capability or are they unfamiliar with how use the capabilities of company systems?
  • Educate and train employees, rather than discipline
  • If shadow IT is filling a need, find a way to provide the capability within company systems if possible
Move to Scalable Services

While it may sound counter-intuitive, now may be a good time to migrate some IT services to solutions that will scale better as you company continues to adjust to changing markets and business conditions.  Moving from in-office, co-located, or hosted file servers to cloud file services, for example, replaces fixed assets and operating costs with services that can scale up and down with staffing levels and/or business volume.  Moving to scalable services may be even more appropriate if you are facing hardware or system end of life, or if doing so will simply and improve access to applications and files for those working from home.

Be Careful with Your Cuts

It may be tempting to cut services you feel that you rarely use.  Be careful, however, that you do not make short term savings decisions that will cost you much more later. See our companion post to learn more.

For help evaluating your IT environment for efficiency, please contact us to schedule a free Cloud Advisor session, or take a look at our Recovery Road Map Assessment.

 

Be Careful with your COVID-19 Cuts

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Almost all of our businesses are feeling the impact of COVID-19.  Revenues and cash flows are down and some costs are rising.  We are all looking for ways to cut expenses. Information technology and services can be a good place to find savings.

As you look to reduce costs, be careful about what services you cut.  Cutting services seen as ancillary or support can save you money in the short term.  Looking forward, cutting any of these services creates real risks that larger problems with bigger costs will impact your business.

Cloud Backup Services

It is tempting to drop your cloud backup service, particularly if you have rarely had to restore, the likelihood you will need to recover lost or damaged content is increasing.  The increased use of home computers and “shadow IT” services, along with an increase in cyber attacks, leads to more accidental and intentional damage and loss. And with more work being done remotely, the reliance on your electronic files, and cloud-resident data in particular, is higher than ever.

Advanced Threat Protection

Almost all email services, including Microsoft 365 and G Suite, have sophisticated malware and virus protections built-in.  They are not, however, your best defense against rapidly changing cyber attacks.  Advanced threat protection provides the extra measure of protection against sophisticated attacks that take advantage of human nature and behaviors and new (zero-hour) attacks. By validating sources and links, and testing links and attachments in a safe sandbox, advanced threat protection can prevent the carnage of ransomware and identity theft.  With a significant spike in phishing attacks, now is not the time to lower your guard.

Service and Support Agreements

It can easy to overlook the value of service and support agreements, particularly if you do not feel that you use them often enough.  Don’t measure the value of these agreements by the cost per call or cost per hour. The value is the time, money, and aggravation saved by having resources on-call that can identify and solve problems, train and guide your users, make system changes, and manage your services. The value is not just in the 15 minutes help, it is having access to resources with the knowledge and experience to address the issue in 15 minutes instead of 15 hours.

By selecting your cuts carefully, you can save money while protecting your business.

See our companion post for more about Where to Look for IT Savings.

For help evaluating your IT environment for efficiency, please contact us to schedule a free Cloud Advisor session, or take a look at our Recovery Road Map Assessment.

 

 

SBA Clarifies “Good-Faith” Certification for PPP Loans

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(Published 5/13/20)

The US Small Business Administration, today, published and update to the PPP Frequently Asked Questions (PDF) to clarify confusion regarding loan audits and the “Good Faith” certification of need signed as part of the loan application process and form. The SBA added Question 46 as, “How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request?”

To summarize the impact

  • PPP loans under $2 million will not be audited.
  • Affiliated PPP loans will be consolidated for audit purposes.
  • The term “current economic uncertainty which makes the PPP loan request necessary to support the ongoing operations” was not clearly defined. Audits will most likely be based on individual facts and circumstances for each borrower.
  • Borrowers and affiliated borrowers with loans in excess of $2 million should be prepared to support their need of a PPP loan with documentation.

The full content of the question and answer is quoted as follows:

Question: How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request?

Answer: When submitting a PPP application, all borrowers must certify in good faith that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” SBA, in consultation with the Department of the Treasury, has determined that the following safe harbor will apply to SBA’s review of PPP loans with respect to this issue: Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.

SBA has determined that this safe harbor is appropriate because borrowers with loans below this threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment than borrowers that obtained larger loans. This safe harbor will also promote economic certainty as PPP borrowers with more limited resources endeavor to retain and rehire employees. In addition, given the large volume of PPP loans, this approach will enable SBA to conserve its finite audit resources and focus its reviews on larger loans, where the compliance effort may yield higher returns.

Importantly, borrowers with loans greater than $2 million that do not satisfy this safe harbor may still have an adequate basis for making the required good-faith certification, based on their individual circumstances in light of the language of the certification and SBA guidance. SBA has previously stated that all PPP loans in excess of $2 million, and other PPP loans as appropriate, will be subject to review by SBA for compliance with program requirements set forth in the PPP Interim Final Rules and in the Borrower Application Form. If SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness. If the borrower repays the loan after receiving notification from SBA, SBA will not pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning necessity of the loan request. SBA’s determination concerning the certification regarding the necessity of the loan request will not affect SBA’s loan guarantee.

Phishing Attacks Spike Amid COVID-19 Crisis

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Cyber AttackIt should be no surprise to you that we are seeing a surge in phishing and other cyber attacks, as criminals look to take advantage of the COVID-19 crisis. A sample of recent news reports illustrates the scope of the problem.

  • In April, the FBI issued a warning about COVID-19 stimulus package scams (CNET).
  • In mid-April, Google reported the daily volume of malware and phishing attack emails jumped to more than 18 million per day (The Verge).
  • Last week, TechRepublic reported a surge in phishing emails trying to exploit DocuSign and COVID-19.
  • Hackers are impersonating Zoom, Microsoft Teams, and Google Meet for phishing scams (The Verge 5/12/20).

Understand the Risk

The risk to your business, employees, and customers is greater at time when your systems may be less secure.

If your employees are using home computers while following stay-at-home orders and guidance, your risk of falling victim to an attack is significantly greater.  Most home computers do not have commercial-grade, next-generation endpoint protections and many run outdated versions of the consumer-grade products installed.

CPR is Still the Best Practice

Our model remains the best, holistic method of avoiding attacks at the human and tech levels, and for responding should something slip through.

Communicate & Educate

  • Remind your employees to be on the look out for suspicious emails, phone calls, web links.
  • Encourage your team to get help and verification if a message or interaction appears or feels suspicious in any way (better safe than sorry).
  • Consider testing employees with simulated attack messages and identify those that may need additional training and guidance.

Prevent & Protect

  • Deploy multi-factor authentication (MFA) and, optionally, single sign-on (SSO) services to prevent the use of compromised accounts.
  • Install Advanced Threat Protection solutions for inbound and outbound email to catch phishing, ransomware, and other illegitimate message.
  • Deploy “next generation” endpoint protection on computers and mobile devices to detect, prevent, and undo damage from dangerous files and applications.
  • Put Web and DNS protection services in place to prevent downloading attacks from hacked websites and identity impersonation.
  • Monitor the “dark web” for direct and third party breaches that may compromise your employees’ business accounts.
  • Take advantage of data loss prevention features built into G Suite and Microsoft 365, and consider tools to identify and prevent unauthorized access, permission errors, and data loss.
  • Eliminate the use of “shadow IT” services, particularly free or consumer-grade services by providing those capabilities to employees and making sure they know how to use them.

Restore & Recover

  • Ensure that you back up and can recover your data, regardless of location.  Your data is not just on your physical or virtual servers, it resides in your Microsoft 365 or G Suite environment, in SaaS applications like Salesforce, on desktops and laptops, and on mobile devices.
  • Put business continuity systems in place with affordable services that let you spin up and run images of your servers and workstations in a cloud data center while you recover your primary systems.
  • Have a breach response plan and service in place as an increasing number of attacks are stealing information, as effective data breach response involves:
    • Forensic analysis and recovery
    • Legal compliance with reporting requirements
    • Legal strategies to minimize liability
    • Increased customer service demand
    • Communications with customers, stakeholders, and the media
    • A potential need to provide consumer protection services
    • Cyber Insurance claims management

Fortunately for most businesses, putting these protections in place is affordable and can be done with minimal impact on your employees and their productivity.  Understand your needs, assess the value proposition (include the risks and costs of doing nothing), and deploy a solution that is the best fit for your business.

Please contact us for assistance as you evaluate your risks, needs, priorities, and solutions.

 

Detailed Guidance from CDC on Re-Opening Businesses

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(Published 5/8/20)

As reported by the Associated Press, scientists at the Centers for Disease Control and Prevention (CDC) prepared a report providing specific guidance for re-opening for different types of businesses and organizations. The report, “Guidance for Implementing the Opening Up America Again Framework“, was due to be released on May 1st, but was blocked by the administration.  We are providing a link to a copy of the leaked report.

As business owners and leaders, we are responsible for the safety of our employees, customers, and others with whom we come in contact.  The more factual information and science-based guidance we have, the better. For our businesses to survive and grow, we will need to operate safely and effectively in the months ahead.  We need to prepare and execute plans well.

Click here to see the report.

5 Ideas for Successful Remote Shopping and Customer Pickup Services

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As more areas of the country move into Phase 1 of re-opening the economy, you may be able to offer remote shopping and curbside (no contact) pickup.  While you may already have a way to hold items for pickup by customers, moving completely to the “take out” model of business requires you to make changes and scale your processes.  Here are 5 ideas to improve your customer experience:

1. Accept Online and Advance Payments

Customers paying online or by phone before coming for their pickup dramatically reduces the in-person interaction needed to complete the sale. This is safe for your employees and your customers.

  • Adding a shopping cart experience to your website is not a simple process; check with your web developer and verify they have the experience to create a secure, easy to use flow for your customers.
  • If adding a shopping cart experience to your website is not feasible in the short term, you have alternatives:
    • Check with your current card processing service; many offer payment portals that can work well in this situation.
    • Spin up a separate online store using a turnkey solution, like Shopify, to which you can upload inventory and product information
    • Create an online payment account via services like PayPal or Venmo (make sure you have or create a company-specific account)
  • Remember that you must still comply with PCI regulations.  Make sure employees know that when taking credit card information, they should not write down or otherwise record the information expect to put it into the POS or card processing systems.

2. Offer Video Shopping Appointments

Allow customers to schedule video shopping appointments, during with a member of your staff can walk the store and help your customers pick out items.

  • Use a secure video meeting tool. If you use Microsoft Office 365 or G Suite, you already have access to video meetings via Microsoft Teams and Google Meet, respectively. Employees should NOT be using personal accounts, email addresses, or phone numbers to setup or run these sessions.
  • Roll out a scheduling tool that lets customers pick from preset, available times.  Bookings is a free tool included with MS Office 365.  Tools like Calendly integrate with both G Suite and Office 365 services.
  • Get a few tripods with phone/tablet holders.  This will allow a single employee to manage the camera while displaying merchandise. It also makes for a “steady” shot and better shopping experience.

3. Live Chat with Customers

Give your customers an easy way to get in touch with you once they are on your website.

  • Live chat is an inexpensive way for customers to communicate with your team.
  • Most live chat solutions allow your staff to answer questions and transfer the conversation.  Staff working from home can cover the live chat service and answer most customer questions. The chat can be transferred to in-store staff as needed.

4. Create a “Service Desk” for Customer Questions

Going beyond live chat, let your customers interact with you however they want, when they want.  At the same time, you can enable staff working from home to support the team working in-store.

  • Setup a cloud-based service desk phone system that allows multiple team members to answer calls, text messages, and voice messages.
    • Employees sign in as ‘agents’ and can indicate when they are available / not available to answer calls.
    • The system will route calls to an available ‘agent’ in a round robin basis or other priority that you configure.
    • Using a “soft phone” application, your employees access the system via computer or mobile device; their personal phone numbers and information remain private.
  • Setup a shared inbox to allow your staff to respond to, and manage, email communications.
    • More than a distribution list, a managed shared inbox lets your team assign emails and discussion threads to employees and track their work and progress.
    • Using the shared inbox, employees’ personal information and individual work emails remain private.
    • Employees can connect/disconnect to the service as needed to cover shifts

5. Measure Customer Satisfaction

Follow up every sale with a thank you email and solicit customer feedback.

  • Cloud-based customer satisfaction (CSAT) tools let you embed one-click feedback questions into your email templates. These often use familiar green, yellow, and red icons to indicate satisfaction levels.
  • CSAT tools can also solicit comments. These comments can be used to identify and resolve customer issues, as well as generate testimonials for your web site and marketing efforts.
  • More advanced CSAT tools can also ask a “Net Promoter Score” question, so you can measure how many of your customers would recommend your business to others.

A Final Note: As you implement these (or other) ideas, procedures, and technologies, remember to take care of your “back office” and employees. Initiating or improving your customer pickup services means new and changed processes. You may also decide to change roles. For example, some stores dedicate one team member per shift to process online payments as a way of managing access to the tools and information.  Take the time to train your staff and make sure they are comfortable with the changes.  Also, solicit their feedback and ideas. They probably have suggestions that will help you impress your customers.

Please contact us for a free Response and Recovery Assessment. We are happy to discuss ideas and solutions, and to assist with getting the technologies and training in place.

 

CARES ACT II – Emergency Funds for SMBs

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(Updated 5/7/20)

5/7 Update: The EIDL program loans are now limited to $150,000 as the demand is dramatically outpacing funding.  The SBA is processing previously received applications in the order received. new applications are only accepted for certain US agricultural businesses, per the 5/5/20 update.  See news reports from CNBC.com and the Washington Post.

5/5 Update: The Small Business Administration has opened the Economic Injury Disaster Loan program, including emergency advances of up to $10,000 to U.S agricultural businesses.  For more information on eligibility and the application process, click here.

Late this week, Congress passed and the President signed a $480 billion package of additional COVID-19 relief funding.  Of this, $310 Billion is for Payroll Protection Program (PPP) loans and an additional $60 Billion is earmarked for the Economic Injury Disaster Loan (EIDL) program.

If want to apply for a PPP loan, the time to act is now.

The SBA Payroll Protection Program (PPP) re-opens with a new round of funding at 10:30 AM ET on Monday April 27th. The program provides an additional $310 Billion in funds, $60 Billion of which are earmarked through smaller credit unions and banks, and to minority, women, and veteran-owned businesses. If you do not have a SBA lender, now is the time to check with local banks and credit unions.

If you submitted a PPP loan package before and did not get a confirmation number, there is conflicting information about whether or not you have to re-apply. We strongly suggest that you contact your bank or lender to confirm that they plan to process your existing application. If you cannot confirm, you should prepare a new application package with the payroll and financial reports updated to the new “last 12 months.”

If you did not previously submit a PPP loan application, we suggest you prepare the application and materials now, so that you can provide them to your lending bank first thing Monday morning. While banks may differ in their specific requests, you package will most likely include the following:

  • SBA PPP Borrower Application Form
  • Payroll report for last 12 months, including:
    • All W-2 pay information, less required exclusions
    • State & Local Taxes Based on Compensation
    • Employer healthcare costs
    • Employer contributions to retirement plans
  • 2019 Form 940
  • Form 941 for last 12 months (last four reported quarters)
  • Certification of Beneficial Ownership
  • Ownership Report (names, titles, ownership percentages)
  • Copy of legal ID — Drivers License or Passport — for any owner over 20%
  • Retirement plan declaration (that you have/do not have a company retirement plan)

Most payroll companies have created reports specifically designed to provide the necessary information.

Am You Eligible?

You are eligible if you are:

  • A small business with fewer than 500 employees
  • A small business that otherwise meets the SSA’s size standard
  • A 501(c)(3) with fewer than 500 employees
  • An Individual who operates as a sole proprietor
  • An Individual who operates as an Independent contractor
  • An Individual who is self-employed who regularly carries on any trade or business
  • A Tribal business concern that meets the SBA size standard
  • A 501(c)(19) Veterans Organizati0n that meets the SBA size standard

In addition, some special rules may make you eligible:

  • If you are in the accommodation and food services sector (NAICS 72), the 500-employee rule is applied on a per physical location basis
  • If you are operating as a franchise or receive financial assistance from an approved Small Business Investment Company the normal affiliation rules do not apply

What Will Lenders Want to See?

In evaluating eligibility, lenders are directed to consider whether the borrower was in  operation before February 16. 2020 and had employees for whom they paid salaries and payroll taxes or paid independent contractors.

Lenders will ask you for a good faith certification that:

  1. The uncertainty of current economic conditions makes the loan request necessary to support ongoing operations
  2. The borrower will use the loan proceeds to retain workers and maintain payroll or make mortgage, lease, and utility payments
  3. Borrower does not have an application pending for a loan that duplicates the purpose and amounts applied for here
  4. From Feb. 15, 2020 to Dec. 31, 2020, the borrower has not received a loan that duplicates the purpose and amounts applied for here (Note: You may be able to fold emergency loans received since Jan. 31, 2020 into this loan)

If you are an independent contractor, sole proprietor, or self-employed individual, lenders will also be looking for certain documents, such as payroll tax filings, Forms 1099-MISC, and income and expenses from the sole proprietorship.

Please also note that lenders will NOT look for:

  • That you sought and were unable to obtain credit elsewhere
  • A personal guarantee (not required for the loan)
  • Collateral (not required for the loan)

How Much Can You Borrow?

Loans can be up to 2.5 times your average monthly payroll costs, not to exceed $10 million.  You Payroll Cost is the sum of included payroll costs less excluded payroll costs, as follows.

Included Payroll Costs for Employers: the sum of payments of any compensation with respect to employees that is a:

  • Salary, wage, commission, or similar compensation
  • Payment of a cash tip or equivalent
  • Payment for vacation, sick, or family medial leave
  • Allowance for dismissal or separation
  • Payment required for the provisions of group health care benefits, including insurance premiums
  • Payment of retirement benefits
  • Payment of state or local tax assess on the compensation of the employee

For Sole Proprietors, Independent Contractors, and Self-Employed Individuals: the sum of  payments of any compensation to, or income, that is a wage, commission, income, net earnings from self-employment, or similar compensation, and that is an amount that is not more than $100,000 in one year, as pro-rated for the covered period.

Excluded Payroll Costs:

  • Compensation of an individual employee in excess of an annual salary of $100,000, prorated for the period of Feb. 15 to June 30, 2020
  • Payroll taxes, railroad retirement taxes, and income taxes
  • Any compensation of an employee whose principal place of residence is outside the United States
  • Qualified sick leave wages for which a credit is allowed under Section 7001 of the Families First Coronavirus Response Act

Note that special rules apply for businesses not in operation for all of 2019 and for calculating average wages for seasonal employees.

Will This Loan be Forgiven?

Borrowers are eligible for loan forgiveness equal to the amount the borrower spent on the following items during the 8-week period beginning on the date of the origination of the loan.

  • Payroll costs (see above for criteria)
  • Interest on the mortgage obligation incurred in the ordinary course of business
  • Rent on a leasing agreement
  • Payments on utilities (electricity, gas, water, transportation, telephone, or internet)
  • Additional wages paid to tipped employees

The amount of the loan forgiveness will be reduces if there is a reduction in the number of employees or a reduction of greater than 25% in wages paid to employees. Staffing and wage reductions occurring in the period starting Feb. 15, 2020 and ending 30 days after the enactment of the CARES Act shall not reduce the amount of loan forgiveness IF the staffing or wage reductions are eliminated by June 30, 2020.

Prepare Your Business for the Next Normal

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(Updated 5/4/20)

With some states and local jurisdictions beginning to loosen or remove stay-at-home and essential business orders and advisories, many small businesses will begin to adjust for the next phase of response and recovery.  For some, this will be a re-opening; for others it will be another shift in how we conduct our business on a day-to-day basis.  Either way, the process will be a minefield of financial, operational, legal, liability, and personnel issues. Before “flipping” the sign from closed to open, plan your return with care and compassion. Both will be needed to keep your employees, customers, and business safe.

Prepare the Groundwork

Guidance on opening is coming from many sources. We recommend a top-down approach, starting at the federal level and working down the your local municipalities and property owners.

  1. Start with the expertise and guidance from the US Centers for Disease Control and Prevention (CDC).  The CDC website  provides guidance for different types of businesses and gathering places that centers on three mitigation strategies:
    • Personal protective measures (e.g., hand-washing, cough etiquette, and face coverings) that persons can use at home or while in community settings
    • Social distancing (e.g., maintaining physical distance between persons in community settings and staying at home)
    • Environmental surface cleaning at home and in community settings, such as schools or workplaces.
  2. Review current laws and regulations under the Families First Coronavirus Recovery Act (FFCRA). This legislation requires almost all employers to provide expanded sick time, medical leave, and family leave pay for employees dealing with illness or childcare issues themselves or within their immediate family unit.  Make sure your return to work plans accommodate these programs and
  3. Second, understand your state’s rules and regulations with with respect to physically opening your business.  Many states are staging how they will allow business to open.  Then, check with local governments where your business is located and where your employees live.  In some states, municipalities and counties are adjusting how they implement state and federal orders and advisories to address local needs and issues.
  4.  Understand your state’s unemployment rules and regulations. In some states, lifting of stay-at-home orders may mean employees are no longer eligible for unemployment even if you keep your business closed or cannot bring everyone back to work. Your team will have differing concerns and levels of comfort; it is important to provide them with timely and accurate communications.
  5. Check with your landlord. Many office and retail complexes are setting up guidelines and rules for how businesses can and will be able to operate in their properties.  Some office complexes, for example, are limiting access to employees only and restricting access to trades and delivery personnel.
  6. Ask your landlord what additional steps they will be taking to clean and sanitize bathrooms, elevators, stair railings, door handles, and other common areas and high touch surfaces.  You and your employees will want and need to know how safe the environment will be when then return to the office or store.

With an understanding of how you can and want to take your next steps, create a Communications Plan.  More than just determined who, when, and how you will share information with employees and other stakeholders, the plan should provide a clear and easy way for employees to get answers to their questions.  As many smaller businesses do not have internal HR resources, you may want to assign a particular manager or executive team to the role.  If you have a contracted HR service or consultant, you will need to coordinate both the process and information. Set clear expectations for how quickly you will answer questions and how answers to common questions will be addressed to the company at large.

Prepare Your Place

As you do your groundwork, begin planning and putting your workplace together for the return of staff.  Social distancing is the current normal. With an expected recurrence of COVID-19 in the fall, social distancing will be part of our lives, and work places, for some time to come. For employees to return, you may be considering:

  • Setting up protocols to ensure that workers who may be ill, or have been exposed, do not enter the workplace and accidentally infect others.
  • Placing dividers between work spaces, or re-configuring your office layout to create separation.
  • Acquiring additional office space, temporarily, to allow more team members to return.
  • Requiring the use of masks or other appropriate personal protective equipment (PPE). Depending on your work environment, this may be full-time or only when employees leave personal work spaces and head to common or communal areas.
  • Cleaning and sanitation of common areas, like kitchens and break rooms, and high touch surfaces.
  • Coordinating disinfection and sanitation efforts with building management and neighboring businesses in leased office spaces.
  • Ensuring availability of cleaning supplies, disinfectants, and sanitizers.
  • Creating a means for employees to express concerns about the work environment and actions of others, without fear of retribution.

For some businesses, the safest course of action will be establishing split shifts or a rotating schedule of employee teams working in the office. Doing so can ease physical separation issues, but we should expect that some employees will need to, or want to, continue working from home.

Prepare Your People

Communications — timely, open, and honest — will be critical for successfully taking the next steps with your business.  For many, personal anxiety and stress will be high as we navigate shifts in our personal and work lives.

Provide your team as much information as possible on what to expect, and how things will move forward, as you go through each upcoming phase of your plans.

As you communicate with your team, keep in mind that employees may be dealing with personal COVID-19 impacts, such as:

  • Death of a family member of close friend
  • Sick or quarantined family member(s)
  • Loss of income by a spouse/partner/family member
  • Supervision of children learning from home
  • Lack of available daycare
  • Anxiety and stress
  • Feeling unable to return to working in the office

Be prepared to deal with the human side of Covid-19, not just the logistics.

  • Anticipate and have answers ready for employees about your requirements and their options
  • Establish a feedback loop and listen to staff issues and concerns
  • Engage your HR staff, service, or consultants to assist with communications, feedback, and responses
  • Update plans and timing as needed to mitigate staff concerns and business conditions

Prepare to Settle In

Set Expectations

As noted, above, experts are telling us to expect local/regional COVID-19 outbreaks throughout the fall and winter. With this expectation, we should plan for future stay-at-home orders and business restrictions. These will likely vary by location, complicating your planning efforts.

Remote work will be part of our operations for the foreseeable future. As you plan your next steps, make sure that your team is ideally equipped to continue working from home.

In the scramble to respond to stay-at-home orders, many businesses make necessary technology decisions for the near-term.  Now is the time to step back and take a long-term view. Employees may be working on home computers, using personal software, and working in a less-then-ideal space. Many businesses are also finding employees have signed up for free or consumer IT services to work around limitations, such as difficulty accessing files on company servers.  We still have a responsibility to keep information secure and private, and our employees and businesses safe.

Get Your IT Resources in Place

Settling in means adapting work environments — at the office and in employees’ homes — to our anticipated reality.

  • Improve security and access to company systems and data
    • Move data from on-premise servers to cloud file services to improve access and security; Map drives to cloud-data for compatibility with desktop software
    • Use Remote desktop and VDI solutions to move on-premise applications to the cloud, providing easy, high performance access without distributing data to remote computers
  • Ensure employees have workable use of your phone system (see this post for more info)
  • Reduce the need for remote PC, VPN and other remote access solutions that increase cost, complexity, and delays
  • Eliminate the need for shadow IT services by helping employees use existing capabilities in your productivity suite
  • Provide devices for employees that do not usually work from home
    • Consider rental, lease, and device-as-a-service option to manage costs
  • If unable to provide devices, upgrade home computers:
    • Add memory for performance and ensure the ability to run business applications
    • Deploy licenses of business software, even if employees are using consumer versions of the applications
    • “Next Gen” endpoint protections from viruses, malware, and ransomware
    • Web filtering and DNS security to prevent malware from infected websites
  • Provide employees with helpful accessories, such as noise cancelling headsets for video calls

We are here to help you plan and execute your next steps.  Our free Response and Recovery Assessment will help you with your planning, fully utilize your existing IT Services, and identify budget-friendly solutions to address any unmet needs and priorities. Email us or complete the form on our home page to schedule your assessment.